93
A Project Report ON "FUNDAMENTAL ANALYSIS OF SECURITY TO SUGGEST INVESTMENT IN EQUITY” FOR SUBMITTED BY Mr. RAJAT JAIN PGDM (SEMESTER – III) (FINANCE + MARKETING) 2014 – 2016 BATCH UNDER THE GUIDANCE OF “PROF. KHUSHALI OZA” SUBMITTED TO SURYADATTA INSTITUTE OF MANAGEMENT & MASS COMMUNICATION, PUNE – 411021 IN PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN MANAGEMT Page | 1

Fundamental Analysis of securities

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Page 1: Fundamental Analysis of securities

AProject Report ON

FUNDAMENTAL ANALYSIS OF SECURITY TO SUGGEST INVESTMENT IN EQUITYrdquo

FOR

SUBMITTED BY

Mr RAJAT JAINPGDM (SEMESTER ndash III) (FINANCE + MARKETING)

2014 ndash 2016 BATCH

UNDER THE GUIDANCE OFldquoPROF KHUSHALI OZArdquo

SUBMITTED TO

SURYADATTA INSTITUTE OF MANAGEMENT amp MASS COMMUNICATION PUNE ndash 411021

IN PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN MANAGEMT

(PGDM)

Page | 1

DECLARATION

D E C L A R A T I O N

I the undersigned hereby declare that the Project Report entitled ldquoFundamental Analysis of Security To suggest Investment In Equityrdquo written and submitted by me to SIMMC Pune in partial fulfilment of the requirements for the award of degree of PGDM under the guidance of MrsKhushali Oza is my original work and the conclusions drawn therein are based on the material collected by myself

Place Pune RAJAT JAIN

Date Research Student

Page | 2

ACKNOWLEDGEMENT

With immense pride and gratitude I express my hearty thanks to entire India Infoline Limited family for giving me this opportunity to learn and providing a platform to execute Summer Internship at India Infoline Ltd Pune

I am thankful to Mr Hemant Kashyap (Business Development Manager) and Mr Vikram Katore (Relationship Manager) for providing me the opportunity to do the Summer Internship at India Infoline amp providing me the guidance and their valuable insights while doing the projects despite of their busy schedule

I would also like to thank you MrsKhushali Oza for giving their time amp inputs Last but not least I could complete my projects on time because of resources guidance provided and sparing their valuable time

My stay here in India Infoline Ltd here was a wonderful learning experience for me and I am thankful to one and all

RAJAT JAINSIMMC PunePGDM (Finance + Marketing)

Page | 3

TABLE OF CONTENTS

SR NO PARTICULARS PAGE NO

1 Declaration 02

2 Acknowledgement 03

3 Introduction 06

4 Objectives 07

5 Scope of Study 08

6 Fundamental Analysis 08

7 Economy Analysis 09

8 Industry Analysis 10

9 Company Analysis 14

10 Fundamental Analysis Tools 16

11 IIFL - Company Profile 23

12 Introduction ndash About IIFL 23

13 Corporate Structure 27

14 Top Management 28

15 Milestones 29

16 IIFL in Business 30

17 Data Presentation Analysis amp Interpretations

33

18 Steel Sector - Introduction 33

Page | 4

19 Tata Steel - Introduction 34

20 Financials of Tata Steel 37

21 Interpretations ndash Tata Steel 44

22 IT Sector - Introduction 46

23 Wipro - Introduction 47

24 Financials of Wipro 49

25 Interpretations - Wipro 54

26 Pharma Sector - Introduction 56

27 Sun Pharma ndash Introduction 57

28 Financials of Sun Pharma 59

29 Interpretations ndash Sun Pharma 64

30 Findings amp Conclusion 66

31 Suggestions 67

32 Conclusions 69

33 Bibliography 70

Page | 5

FUNDAMENTAL ANALYSIS OF A SECURITY

INTRODUCTION

11 INTRODUCTIONStock market analysis is crucial because it influences the choices investors make sometimes to very high degrees A wide range of stock market analyses is available to investors Not all of them are useful and some can be detrimental or even fatal to investors An awareness of the different types of analyses can help investors stay informed and make their own monetary decisions wisely

Fundamental Analysis

Fundamental analysis is more likely to occur on a company-to-company basis The goal is to determine whether the stock price is a good representation of the actual value of the company This is done based on the financial well-being of the company how it is being managed and how consumers are receiving the companyrsquos products and servicesFundamental analysis asks whether the companys ability and performance are worth the price of the stock If the stock seems overpriced based on the companys business operations its price is likely to fall and vice versa Fundamental analysis assumes that the quality and competence of a business model will be reflected in its stock performance

Technical Analysis

Technical analysis uses a variety of different tools to observe in depth the effects of supply and demand Technical analysis generally discounts the underlying health of the company as it might be reflected in a fundamental analysis instead favoring an examination of the basic trajectory of a companys stockAlthough this approach has its drawbacks it offers a special perspective that might be more relevant to stock investment because stock prices sometimes rise and fall completely independently of the companys operations In general a more detailed and extensive stock history will produce more accurate results through technical analysis

Fundamental analysis is the examination of the underlying forces that affect the well being of the economy industry groups and companies As with most analysis the goal is to derive a forecast and profit from future price movements

At the company level fundamental analysis may involve examination of financial data management business concept and competition At the industry level there might be an examination of supply and demand forces for the products offered For the national economy fundamental analysis might focus on economic data to assess the present and future growth of the economy

Page | 6

To forecast future stock prices fundamental analysis combines economic industry and company analysis to derive a stocks current fair value and forecast future value If fair value is not equal to the current stock price fundamental analysts believe that the stock is either over or under valued and the market price will ultimately gravitate towards fair value Fundamentalists do not heed the advice of the random walkers and believe that markets are weak-form efficient By believing that prices do not accurately reflect all available information fundamental analysts look to capitalize on perceived price discrepancies

Fundamental analysis serves to answer questions such as

Is the companyrsquos 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

This all together boils down to one question that is Is the companyrsquos stock a good investment

OBJECTIVES-

To evaluate the present and future earning capacity of a share based on the Economy Industry and Company fundamentals and thereby assess the intrinsic valueeconomic worth of the share for investment

To understand the performance of companies through its financials and thereby assessing the future prospect of the company

Compare past and current records of the company and judge its performance based on various ratios and findings so as to track the records find out whether the company has meet its expectations regarding sales and profitability

Suggest investors about some of the shares which can be purchased and can earn return over their investments over a certain period of time

Page | 7

SCOPE OF STUDY- a) Long-term Trends

Fundamental analysis is good for long-term investments based on long-term trends very long-term The ability to identify and predict long-term economic demographic technological or consumer trends can benefit patient investors who pick the right industry groups or companies

b) Value Spotting

Sound fundamental analysis will help identify companies that represent a good value Some of the most legendary investors think long-term and value Graham and Dodd Warren Buffett and John Neff are seen as the champions of value investing Fundamental analysis can help uncover companies with valuable assets a strong balance sheet stable earnings and staying power

c) Business Acumen

One of the most obvious but less tangible rewards of fundamental analysis is the development of a thorough understanding of the business After such painstaking research and analysis an investor will be familiar with the key revenue and profit drivers behind a company Earnings and earnings expectations can be potent drivers of equity prices Even some technicians will agree to that A good understanding can help investors avoid companies that are prone to shortfalls and identify those that continue to deliver In addition to understanding the business fundamental analysis allows investors to develop an understanding of the key value drivers and companies within an industry A stocks price is heavily influenced by its industry group By studying these groups investors can better position themselves to identify opportunities that are high-risk (tech) low-risk (utilities) growth oriented (computer) value driven (oil) non-cyclical (consumer staples) cyclical (transportation) or income-oriented (high yield)

d) Knowing Whos Who

Stocks move as a group By understanding a companys business investors can better position themselves to categorize stocks within their relevant industry group Business can change rapidly and with it the revenue mix of a company This happened to many of the pure Internet retailers which were not really Internet companies but plain retailers Knowing a companys business and being able to place it in a group can make a huge difference in relative valuations

FUNDAMENTAL ANALYSISFundamental Analysis involves a three-step examination which calls for

Understanding of the macro- economic environment and developments (Economy Analysis)

Analyzing the prospects of the industry to which the firm belongs (Industry Analysis)

Page | 8

Assessing the projected performance of the company and the intrinsic value of its share (Company Analysis)

ECONOMY ANALYSIS

Economic analysis is a process whereby strengths and weaknesses of an economy are analyzed Economic analysis is important in order to understand exact condition of an economy It can cover a number of important economic issues that keep cropping up within a particular economy which is being analyzed A study of the economic variables would give an idea about future corporate earnings and the payment of dividends and interest to investors

Factors to be consider in Economy Analysis

Economic indicators or business indicators are markers about an economy Future performance predictions and economic performances can be analyzed through these indicators There are economic summaries various indices and earnings reports like housing unemployment bankruptcies Consumer Price Index (a measure for inflation) stock market prices industrial production retail sales and money supply changes in economic indicators

Indicators which change about same time and in same direction with economy are called coincident indicators These provide information regarding present economic state Coincident indicators include retail sales GDP industrial production and personal income A coincident index can be used to identify troughs and peaks in a business cycle

These indicators are studied in a branch of macroeconomics called ldquobusiness cyclesrdquo Economic indicators have three major attributes - relation to business cycle or an economy frequency of data and timing In relation to business cycle or economy indicators have one of three different economic relationships like procyclic counter cyclic and acyclic Procyclic economic indicator moves along same direction as an economy It means that when

Page | 9

economy is well this number increases An example is gross domestic product (GDP) Counter cyclic economic indicator moves in reverse direction of economy Unemployment rate increases as economy gets worse Acyclic economic indicator doesnrsquot have any relation to an economyrsquos health An example would be a sports result which doesnrsquot have any effect on economy

Economy-wide Factors

Growth rates of the economy GDP GNP NNP

Inflation rate Interest rates Government Revenue Expenditure and Deficits Exchange rates Infrastructure Monsoon Economic and political stability

INDUSTRY ANALYSIS-

It refers to an evaluation of the relative strengths and weakness of industries Industry analysis is a type of investment research that begins by focusing on the status of an industry or an industrial sector

This part is divided into the four steps that is

Sensitivity to the Business Cycle

Industry Life Cycle Analysis

Study of the Structure and Characteristics of an Industry

Profit Potential of Industries Porter Model

1) Sensitivity to the Business cycle-

a) The sensitivity of the firmrsquos sales to the business condition- It shows the performance of the business of the firm with respect to the business environment or condition

b) The Operating Leverage

c) The Financial Leverage

2) Industry Life Cycle Analysis-

A form of fundamental analysis involving the process of making investment decisions based on the different stages an industry is at during a given point in time The type of position taken will depend on firm specific characteristics as well as where the industry is at in its life cycle

Page | 10

1) Under the production and market introduction phases revenues and earnings are likely to be very low which makes investments during these phases more speculative in nature Revenues and earnings are likely to be low because there is little demand for the product or the product is not completed Expenses are likely to be very large during these phases as a company or industry spends a lot on marketing and research

2) Through the growth phase revenues and margins are likely to be on the rise due to an increase in demand for a product and the pricing power the firm has due to a small number of competitors Stock prices are likely to rise during this phase

3) During the maturity and stability phase revenues and margins are likely to decline due to lower sales demand and more competition Stock prices are likely to decline during these phases

3) Study of the Structure and Characteristics of An Industries-

The study of structure and characteristics of an industries also an important in the process of industry analysis for the purpose of investment This study will help us in deciding the future of the industry whether it is good or bad With the help of this study we may also know about the future growth on the industry Following are some points which will be consider by the investor for this study

Demand and Supply Gap in Product or services Competitive Conditions in the Industry Permanence Labour Conditions or Labour attitude towards the work in industries Attitude of Government and rules amp regulation of government also the facilities

and subsidies provided by government Supply of Raw Materials Cost Structure

4) Profit Potential of Industries ndash Porter Model-

Each industry is different and using one cookie-cutter approach to analysis is sure to create problems Imagine for example comparing the PE ratio of a tech company to that of a utility Because you are in effect comparing apples to oranges the analysis is next to useless In each section well take an in-depth look at the different valuation techniques and buzz words used in a particular industry complete a 5-forces analysis on the state of the market and point you in the direction of industry-specific resources

The model originated from Michael E Porters 1980 book Competitive Strategy Techniques for Analyzing Industries and Competitors Since then it has become a frequently used tool for analyzing a companys industry structure and its corporate strategy

In his book Porter identified five competitive forces that shape every single industry and market These forces help us to analyze everything from the intensity of competition to the profitability and attractiveness of an industry

Page | 11

Following figure shows the relationship between the different competitive forces

1) Threat of New Entrants

The easier it is for new companies to enter the industry the more cutthroat competition there will be Factors that can limit the threat of new entrants are known as barriers to entry Some examples include

Existing loyalty to major brands Incentives for using a particular buyer (such as frequent shopper

programs) High fixed costs Scarcity of resources High costs of switching companies Government restrictions or legislation

2) Power of Suppliers

This is how much pressure suppliers can place on a business If one supplier has a large enough impact to affect a companys margins and volumes then it holds substantial power Here are a few reasons that suppliers might have power

There are very few suppliers of a particular product There are no substitutes Switching to another (competitive) product is very costly The product is extremely important to buyers - cant do without it The supplying industry has a higher profitability than the buying industry

Page | 12

3) Power of Buyers

This is how much pressure customers can place on a business If one customer has a large enough impact to affect a companys margins and volumes then the customer hold substantial power Here are a few reasons that customers might have power

Small number of buyers Purchases large volumes Switching to another (competitive) product is simple The product is not extremely important to buyers they can do

without the product for a period of time Customers are price sensitive

4) Availability of Substitutes ndash

What is the likelihood that someone will switch to a competitive product or service If the cost of switching is low then this poses a serious threat Here are a few factors that can affect the threat of substitutes

The main issue is the similarity of substitutes For example if the price of coffee rises substantially a coffee drinker may switch over to a beverage like tea

If substitutes are similar it can be viewed in the same light as a new entrant

5) Competitive Rivalry ndash

This describes the intensity of competition between existing firms in an industry Highly competitive industries generally earn low returns because the cost of competition is high A highly competitive market might result from

Many players of about the same size there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth companies can only

grow by stealing customers away from competitors5) Cross-Sectional Analysis-

A type of analysis an investor analyst or portfolio manager may conduct on a company in relation to that companys industry or industry peers The analysis compares one company against the industry it operates within or directly against certain competitors within the same industry in an attempt to discover the best of the breed

When conducting a cross-sectional analysis the analyst seeks to identify by using comparative metrics the valuation debt-load future outlook andor operational efficiency of the target company This allows the analyst to evaluate the target companys efficiency in these areas and to make the best investment choice among a group of competitors or the industry as a whole

When comparing the target firm to competitors the analyst must be careful to

Page | 13

consider the unique operating characteristics of each company and how that will affect any comparative metrics used

COMPANY ANALYSIS

Before diving into a companys financial statements were going to take a look at some of the qualitative aspects of a company Fundamental analysis seeks to determine the intrinsic value of a companys stock But since qualitative factors by definition represent aspects of a companys 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 weve demonstrated you cant ignore the less tangible characteristics of a company In this section we are going to highlight some of the company-specific qualitative factors that one should be aware of

a) Business Model-

Even before an investor looks at a companys financial statements or does any research one of the most important questions that should be asked is What exactly does the company do This is referred to as a companys business model ndash its how a company makes money You can get a good overview of a companys business model by checking out its website or by reading the document which company submitted to the SEBI

At the very least 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 doesnt understand them This is not to say the technology sector is bad but its not Buffetts area of expertise he doesnt feel comfortable investing in this area Similarly unless you understand a companys business model you dont know what the drivers are for future growth and you leave yourself vulnerable to being blindsided like shareholders of Boston Chicken were

b) Competitive Advantage

Another business consideration for investors is competitive advantage A companys long-term success is driven largely by its ability to maintain a competitive advantage - and keep it Powerful competitive advantages such as Coca Colas brand name and Microsofts 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

c) 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 cant set up a meeting with management if you want to invest a few lakhs or crore of rupee On the other hand if you are a fund manager interested in

Page | 14

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 Dont expect to find anything useful here Lets be honest Were looking for dirt and no company is going to put negative information on its corporate website

d) 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

Fortunately corporate governance policies typically cover a few general areas structure of the board of directors stakeholder rights and financial and information transparency With a little research and the right questions in mind investors can get a good idea about a companys corporate governance

e) Financial and Information Transparency

This aspect of governance relates to the quality and timeliness of a companys financial disclosures and operational happenings Sufficient transparency implies that a companys financial releases are written in a manner that stakeholders can follow what management is doing and therefore have a clear understanding of the companys current financial situation

f) Stakeholder Rights

This aspect of corporate governance examines the extent that a companys policies are benefiting stakeholder interests notably shareholder interests Ultimately as owners of the company shareholders should have some access to the board of directors if they have concerns or want something addressed Therefore companies with good governance give shareholders a certain amount of ownership voting rights to call meetings to discuss pressing issues with the board

g) Financial statement analysis

Balance sheet walk demonstrates financial statement analysis using the relationship of the key financial statements the income statement cash flow and balance sheet

We show the financial statement links Most business people tend to look at each of the financial statements in turn Our contribution is to show that all three key financial statements are linked The income statement shows the potential cash flows The cash flow statement shows the real cash flows The balance sheet shows the cash owing or payable

Page | 15

Income statement

The income statement (or profit and loss) shows revenue cost of sales expenses interest and tax but does not show the cash flow for a business

Balance sheet

The balance sheet shows the assets and liabilities for the business On the balance sheet we can see the cash balance at the start and end of the period However the details of all the cash flows cannot be gleaned from the balance sheet

Cash flow

The cash flow statement shows the cash flows for the business Here we see the operating cash flows financing cash flows and investing cash flows

The income statement cash flow and balance sheet above are not independent of each other Financial statements links demonstrates how they work together This understanding helps with financial statement analysis

Financial Statement Links

Where is the relationship between the key financial statements Take a look at this example

1 The income statement shows revenue of 5000002 The cash flow statement shows the cash received from customers is 3750003 The balance sheet shows under assets the difference ie accounts receivables is

125000 Fundamental analysis is the process of looking at a business at the basic or fundamental financial level This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes The goal is to determine the current worth and more importantly how the market values the stock

Following are the key tools of fundamental analysis and what they tell you Even if you donrsquot plan to do in-depth fundamental analysis yourself it will help you follow stocks more closely if you understand the key ratios and terms

FUNDAMENTAL ANALYSIS TOOLS These are the most popular tools of fundamental analysis They focus on earnings growth and value in the market No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

Earnings

Page | 16

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 2: Fundamental Analysis of securities

DECLARATION

D E C L A R A T I O N

I the undersigned hereby declare that the Project Report entitled ldquoFundamental Analysis of Security To suggest Investment In Equityrdquo written and submitted by me to SIMMC Pune in partial fulfilment of the requirements for the award of degree of PGDM under the guidance of MrsKhushali Oza is my original work and the conclusions drawn therein are based on the material collected by myself

Place Pune RAJAT JAIN

Date Research Student

Page | 2

ACKNOWLEDGEMENT

With immense pride and gratitude I express my hearty thanks to entire India Infoline Limited family for giving me this opportunity to learn and providing a platform to execute Summer Internship at India Infoline Ltd Pune

I am thankful to Mr Hemant Kashyap (Business Development Manager) and Mr Vikram Katore (Relationship Manager) for providing me the opportunity to do the Summer Internship at India Infoline amp providing me the guidance and their valuable insights while doing the projects despite of their busy schedule

I would also like to thank you MrsKhushali Oza for giving their time amp inputs Last but not least I could complete my projects on time because of resources guidance provided and sparing their valuable time

My stay here in India Infoline Ltd here was a wonderful learning experience for me and I am thankful to one and all

RAJAT JAINSIMMC PunePGDM (Finance + Marketing)

Page | 3

TABLE OF CONTENTS

SR NO PARTICULARS PAGE NO

1 Declaration 02

2 Acknowledgement 03

3 Introduction 06

4 Objectives 07

5 Scope of Study 08

6 Fundamental Analysis 08

7 Economy Analysis 09

8 Industry Analysis 10

9 Company Analysis 14

10 Fundamental Analysis Tools 16

11 IIFL - Company Profile 23

12 Introduction ndash About IIFL 23

13 Corporate Structure 27

14 Top Management 28

15 Milestones 29

16 IIFL in Business 30

17 Data Presentation Analysis amp Interpretations

33

18 Steel Sector - Introduction 33

Page | 4

19 Tata Steel - Introduction 34

20 Financials of Tata Steel 37

21 Interpretations ndash Tata Steel 44

22 IT Sector - Introduction 46

23 Wipro - Introduction 47

24 Financials of Wipro 49

25 Interpretations - Wipro 54

26 Pharma Sector - Introduction 56

27 Sun Pharma ndash Introduction 57

28 Financials of Sun Pharma 59

29 Interpretations ndash Sun Pharma 64

30 Findings amp Conclusion 66

31 Suggestions 67

32 Conclusions 69

33 Bibliography 70

Page | 5

FUNDAMENTAL ANALYSIS OF A SECURITY

INTRODUCTION

11 INTRODUCTIONStock market analysis is crucial because it influences the choices investors make sometimes to very high degrees A wide range of stock market analyses is available to investors Not all of them are useful and some can be detrimental or even fatal to investors An awareness of the different types of analyses can help investors stay informed and make their own monetary decisions wisely

Fundamental Analysis

Fundamental analysis is more likely to occur on a company-to-company basis The goal is to determine whether the stock price is a good representation of the actual value of the company This is done based on the financial well-being of the company how it is being managed and how consumers are receiving the companyrsquos products and servicesFundamental analysis asks whether the companys ability and performance are worth the price of the stock If the stock seems overpriced based on the companys business operations its price is likely to fall and vice versa Fundamental analysis assumes that the quality and competence of a business model will be reflected in its stock performance

Technical Analysis

Technical analysis uses a variety of different tools to observe in depth the effects of supply and demand Technical analysis generally discounts the underlying health of the company as it might be reflected in a fundamental analysis instead favoring an examination of the basic trajectory of a companys stockAlthough this approach has its drawbacks it offers a special perspective that might be more relevant to stock investment because stock prices sometimes rise and fall completely independently of the companys operations In general a more detailed and extensive stock history will produce more accurate results through technical analysis

Fundamental analysis is the examination of the underlying forces that affect the well being of the economy industry groups and companies As with most analysis the goal is to derive a forecast and profit from future price movements

At the company level fundamental analysis may involve examination of financial data management business concept and competition At the industry level there might be an examination of supply and demand forces for the products offered For the national economy fundamental analysis might focus on economic data to assess the present and future growth of the economy

Page | 6

To forecast future stock prices fundamental analysis combines economic industry and company analysis to derive a stocks current fair value and forecast future value If fair value is not equal to the current stock price fundamental analysts believe that the stock is either over or under valued and the market price will ultimately gravitate towards fair value Fundamentalists do not heed the advice of the random walkers and believe that markets are weak-form efficient By believing that prices do not accurately reflect all available information fundamental analysts look to capitalize on perceived price discrepancies

Fundamental analysis serves to answer questions such as

Is the companyrsquos 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

This all together boils down to one question that is Is the companyrsquos stock a good investment

OBJECTIVES-

To evaluate the present and future earning capacity of a share based on the Economy Industry and Company fundamentals and thereby assess the intrinsic valueeconomic worth of the share for investment

To understand the performance of companies through its financials and thereby assessing the future prospect of the company

Compare past and current records of the company and judge its performance based on various ratios and findings so as to track the records find out whether the company has meet its expectations regarding sales and profitability

Suggest investors about some of the shares which can be purchased and can earn return over their investments over a certain period of time

Page | 7

SCOPE OF STUDY- a) Long-term Trends

Fundamental analysis is good for long-term investments based on long-term trends very long-term The ability to identify and predict long-term economic demographic technological or consumer trends can benefit patient investors who pick the right industry groups or companies

b) Value Spotting

Sound fundamental analysis will help identify companies that represent a good value Some of the most legendary investors think long-term and value Graham and Dodd Warren Buffett and John Neff are seen as the champions of value investing Fundamental analysis can help uncover companies with valuable assets a strong balance sheet stable earnings and staying power

c) Business Acumen

One of the most obvious but less tangible rewards of fundamental analysis is the development of a thorough understanding of the business After such painstaking research and analysis an investor will be familiar with the key revenue and profit drivers behind a company Earnings and earnings expectations can be potent drivers of equity prices Even some technicians will agree to that A good understanding can help investors avoid companies that are prone to shortfalls and identify those that continue to deliver In addition to understanding the business fundamental analysis allows investors to develop an understanding of the key value drivers and companies within an industry A stocks price is heavily influenced by its industry group By studying these groups investors can better position themselves to identify opportunities that are high-risk (tech) low-risk (utilities) growth oriented (computer) value driven (oil) non-cyclical (consumer staples) cyclical (transportation) or income-oriented (high yield)

d) Knowing Whos Who

Stocks move as a group By understanding a companys business investors can better position themselves to categorize stocks within their relevant industry group Business can change rapidly and with it the revenue mix of a company This happened to many of the pure Internet retailers which were not really Internet companies but plain retailers Knowing a companys business and being able to place it in a group can make a huge difference in relative valuations

FUNDAMENTAL ANALYSISFundamental Analysis involves a three-step examination which calls for

Understanding of the macro- economic environment and developments (Economy Analysis)

Analyzing the prospects of the industry to which the firm belongs (Industry Analysis)

Page | 8

Assessing the projected performance of the company and the intrinsic value of its share (Company Analysis)

ECONOMY ANALYSIS

Economic analysis is a process whereby strengths and weaknesses of an economy are analyzed Economic analysis is important in order to understand exact condition of an economy It can cover a number of important economic issues that keep cropping up within a particular economy which is being analyzed A study of the economic variables would give an idea about future corporate earnings and the payment of dividends and interest to investors

Factors to be consider in Economy Analysis

Economic indicators or business indicators are markers about an economy Future performance predictions and economic performances can be analyzed through these indicators There are economic summaries various indices and earnings reports like housing unemployment bankruptcies Consumer Price Index (a measure for inflation) stock market prices industrial production retail sales and money supply changes in economic indicators

Indicators which change about same time and in same direction with economy are called coincident indicators These provide information regarding present economic state Coincident indicators include retail sales GDP industrial production and personal income A coincident index can be used to identify troughs and peaks in a business cycle

These indicators are studied in a branch of macroeconomics called ldquobusiness cyclesrdquo Economic indicators have three major attributes - relation to business cycle or an economy frequency of data and timing In relation to business cycle or economy indicators have one of three different economic relationships like procyclic counter cyclic and acyclic Procyclic economic indicator moves along same direction as an economy It means that when

Page | 9

economy is well this number increases An example is gross domestic product (GDP) Counter cyclic economic indicator moves in reverse direction of economy Unemployment rate increases as economy gets worse Acyclic economic indicator doesnrsquot have any relation to an economyrsquos health An example would be a sports result which doesnrsquot have any effect on economy

Economy-wide Factors

Growth rates of the economy GDP GNP NNP

Inflation rate Interest rates Government Revenue Expenditure and Deficits Exchange rates Infrastructure Monsoon Economic and political stability

INDUSTRY ANALYSIS-

It refers to an evaluation of the relative strengths and weakness of industries Industry analysis is a type of investment research that begins by focusing on the status of an industry or an industrial sector

This part is divided into the four steps that is

Sensitivity to the Business Cycle

Industry Life Cycle Analysis

Study of the Structure and Characteristics of an Industry

Profit Potential of Industries Porter Model

1) Sensitivity to the Business cycle-

a) The sensitivity of the firmrsquos sales to the business condition- It shows the performance of the business of the firm with respect to the business environment or condition

b) The Operating Leverage

c) The Financial Leverage

2) Industry Life Cycle Analysis-

A form of fundamental analysis involving the process of making investment decisions based on the different stages an industry is at during a given point in time The type of position taken will depend on firm specific characteristics as well as where the industry is at in its life cycle

Page | 10

1) Under the production and market introduction phases revenues and earnings are likely to be very low which makes investments during these phases more speculative in nature Revenues and earnings are likely to be low because there is little demand for the product or the product is not completed Expenses are likely to be very large during these phases as a company or industry spends a lot on marketing and research

2) Through the growth phase revenues and margins are likely to be on the rise due to an increase in demand for a product and the pricing power the firm has due to a small number of competitors Stock prices are likely to rise during this phase

3) During the maturity and stability phase revenues and margins are likely to decline due to lower sales demand and more competition Stock prices are likely to decline during these phases

3) Study of the Structure and Characteristics of An Industries-

The study of structure and characteristics of an industries also an important in the process of industry analysis for the purpose of investment This study will help us in deciding the future of the industry whether it is good or bad With the help of this study we may also know about the future growth on the industry Following are some points which will be consider by the investor for this study

Demand and Supply Gap in Product or services Competitive Conditions in the Industry Permanence Labour Conditions or Labour attitude towards the work in industries Attitude of Government and rules amp regulation of government also the facilities

and subsidies provided by government Supply of Raw Materials Cost Structure

4) Profit Potential of Industries ndash Porter Model-

Each industry is different and using one cookie-cutter approach to analysis is sure to create problems Imagine for example comparing the PE ratio of a tech company to that of a utility Because you are in effect comparing apples to oranges the analysis is next to useless In each section well take an in-depth look at the different valuation techniques and buzz words used in a particular industry complete a 5-forces analysis on the state of the market and point you in the direction of industry-specific resources

The model originated from Michael E Porters 1980 book Competitive Strategy Techniques for Analyzing Industries and Competitors Since then it has become a frequently used tool for analyzing a companys industry structure and its corporate strategy

In his book Porter identified five competitive forces that shape every single industry and market These forces help us to analyze everything from the intensity of competition to the profitability and attractiveness of an industry

Page | 11

Following figure shows the relationship between the different competitive forces

1) Threat of New Entrants

The easier it is for new companies to enter the industry the more cutthroat competition there will be Factors that can limit the threat of new entrants are known as barriers to entry Some examples include

Existing loyalty to major brands Incentives for using a particular buyer (such as frequent shopper

programs) High fixed costs Scarcity of resources High costs of switching companies Government restrictions or legislation

2) Power of Suppliers

This is how much pressure suppliers can place on a business If one supplier has a large enough impact to affect a companys margins and volumes then it holds substantial power Here are a few reasons that suppliers might have power

There are very few suppliers of a particular product There are no substitutes Switching to another (competitive) product is very costly The product is extremely important to buyers - cant do without it The supplying industry has a higher profitability than the buying industry

Page | 12

3) Power of Buyers

This is how much pressure customers can place on a business If one customer has a large enough impact to affect a companys margins and volumes then the customer hold substantial power Here are a few reasons that customers might have power

Small number of buyers Purchases large volumes Switching to another (competitive) product is simple The product is not extremely important to buyers they can do

without the product for a period of time Customers are price sensitive

4) Availability of Substitutes ndash

What is the likelihood that someone will switch to a competitive product or service If the cost of switching is low then this poses a serious threat Here are a few factors that can affect the threat of substitutes

The main issue is the similarity of substitutes For example if the price of coffee rises substantially a coffee drinker may switch over to a beverage like tea

If substitutes are similar it can be viewed in the same light as a new entrant

5) Competitive Rivalry ndash

This describes the intensity of competition between existing firms in an industry Highly competitive industries generally earn low returns because the cost of competition is high A highly competitive market might result from

Many players of about the same size there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth companies can only

grow by stealing customers away from competitors5) Cross-Sectional Analysis-

A type of analysis an investor analyst or portfolio manager may conduct on a company in relation to that companys industry or industry peers The analysis compares one company against the industry it operates within or directly against certain competitors within the same industry in an attempt to discover the best of the breed

When conducting a cross-sectional analysis the analyst seeks to identify by using comparative metrics the valuation debt-load future outlook andor operational efficiency of the target company This allows the analyst to evaluate the target companys efficiency in these areas and to make the best investment choice among a group of competitors or the industry as a whole

When comparing the target firm to competitors the analyst must be careful to

Page | 13

consider the unique operating characteristics of each company and how that will affect any comparative metrics used

COMPANY ANALYSIS

Before diving into a companys financial statements were going to take a look at some of the qualitative aspects of a company Fundamental analysis seeks to determine the intrinsic value of a companys stock But since qualitative factors by definition represent aspects of a companys 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 weve demonstrated you cant ignore the less tangible characteristics of a company In this section we are going to highlight some of the company-specific qualitative factors that one should be aware of

a) Business Model-

Even before an investor looks at a companys financial statements or does any research one of the most important questions that should be asked is What exactly does the company do This is referred to as a companys business model ndash its how a company makes money You can get a good overview of a companys business model by checking out its website or by reading the document which company submitted to the SEBI

At the very least 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 doesnt understand them This is not to say the technology sector is bad but its not Buffetts area of expertise he doesnt feel comfortable investing in this area Similarly unless you understand a companys business model you dont know what the drivers are for future growth and you leave yourself vulnerable to being blindsided like shareholders of Boston Chicken were

b) Competitive Advantage

Another business consideration for investors is competitive advantage A companys long-term success is driven largely by its ability to maintain a competitive advantage - and keep it Powerful competitive advantages such as Coca Colas brand name and Microsofts 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

c) 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 cant set up a meeting with management if you want to invest a few lakhs or crore of rupee On the other hand if you are a fund manager interested in

Page | 14

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 Dont expect to find anything useful here Lets be honest Were looking for dirt and no company is going to put negative information on its corporate website

d) 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

Fortunately corporate governance policies typically cover a few general areas structure of the board of directors stakeholder rights and financial and information transparency With a little research and the right questions in mind investors can get a good idea about a companys corporate governance

e) Financial and Information Transparency

This aspect of governance relates to the quality and timeliness of a companys financial disclosures and operational happenings Sufficient transparency implies that a companys financial releases are written in a manner that stakeholders can follow what management is doing and therefore have a clear understanding of the companys current financial situation

f) Stakeholder Rights

This aspect of corporate governance examines the extent that a companys policies are benefiting stakeholder interests notably shareholder interests Ultimately as owners of the company shareholders should have some access to the board of directors if they have concerns or want something addressed Therefore companies with good governance give shareholders a certain amount of ownership voting rights to call meetings to discuss pressing issues with the board

g) Financial statement analysis

Balance sheet walk demonstrates financial statement analysis using the relationship of the key financial statements the income statement cash flow and balance sheet

We show the financial statement links Most business people tend to look at each of the financial statements in turn Our contribution is to show that all three key financial statements are linked The income statement shows the potential cash flows The cash flow statement shows the real cash flows The balance sheet shows the cash owing or payable

Page | 15

Income statement

The income statement (or profit and loss) shows revenue cost of sales expenses interest and tax but does not show the cash flow for a business

Balance sheet

The balance sheet shows the assets and liabilities for the business On the balance sheet we can see the cash balance at the start and end of the period However the details of all the cash flows cannot be gleaned from the balance sheet

Cash flow

The cash flow statement shows the cash flows for the business Here we see the operating cash flows financing cash flows and investing cash flows

The income statement cash flow and balance sheet above are not independent of each other Financial statements links demonstrates how they work together This understanding helps with financial statement analysis

Financial Statement Links

Where is the relationship between the key financial statements Take a look at this example

1 The income statement shows revenue of 5000002 The cash flow statement shows the cash received from customers is 3750003 The balance sheet shows under assets the difference ie accounts receivables is

125000 Fundamental analysis is the process of looking at a business at the basic or fundamental financial level This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes The goal is to determine the current worth and more importantly how the market values the stock

Following are the key tools of fundamental analysis and what they tell you Even if you donrsquot plan to do in-depth fundamental analysis yourself it will help you follow stocks more closely if you understand the key ratios and terms

FUNDAMENTAL ANALYSIS TOOLS These are the most popular tools of fundamental analysis They focus on earnings growth and value in the market No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

Earnings

Page | 16

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 3: Fundamental Analysis of securities

ACKNOWLEDGEMENT

With immense pride and gratitude I express my hearty thanks to entire India Infoline Limited family for giving me this opportunity to learn and providing a platform to execute Summer Internship at India Infoline Ltd Pune

I am thankful to Mr Hemant Kashyap (Business Development Manager) and Mr Vikram Katore (Relationship Manager) for providing me the opportunity to do the Summer Internship at India Infoline amp providing me the guidance and their valuable insights while doing the projects despite of their busy schedule

I would also like to thank you MrsKhushali Oza for giving their time amp inputs Last but not least I could complete my projects on time because of resources guidance provided and sparing their valuable time

My stay here in India Infoline Ltd here was a wonderful learning experience for me and I am thankful to one and all

RAJAT JAINSIMMC PunePGDM (Finance + Marketing)

Page | 3

TABLE OF CONTENTS

SR NO PARTICULARS PAGE NO

1 Declaration 02

2 Acknowledgement 03

3 Introduction 06

4 Objectives 07

5 Scope of Study 08

6 Fundamental Analysis 08

7 Economy Analysis 09

8 Industry Analysis 10

9 Company Analysis 14

10 Fundamental Analysis Tools 16

11 IIFL - Company Profile 23

12 Introduction ndash About IIFL 23

13 Corporate Structure 27

14 Top Management 28

15 Milestones 29

16 IIFL in Business 30

17 Data Presentation Analysis amp Interpretations

33

18 Steel Sector - Introduction 33

Page | 4

19 Tata Steel - Introduction 34

20 Financials of Tata Steel 37

21 Interpretations ndash Tata Steel 44

22 IT Sector - Introduction 46

23 Wipro - Introduction 47

24 Financials of Wipro 49

25 Interpretations - Wipro 54

26 Pharma Sector - Introduction 56

27 Sun Pharma ndash Introduction 57

28 Financials of Sun Pharma 59

29 Interpretations ndash Sun Pharma 64

30 Findings amp Conclusion 66

31 Suggestions 67

32 Conclusions 69

33 Bibliography 70

Page | 5

FUNDAMENTAL ANALYSIS OF A SECURITY

INTRODUCTION

11 INTRODUCTIONStock market analysis is crucial because it influences the choices investors make sometimes to very high degrees A wide range of stock market analyses is available to investors Not all of them are useful and some can be detrimental or even fatal to investors An awareness of the different types of analyses can help investors stay informed and make their own monetary decisions wisely

Fundamental Analysis

Fundamental analysis is more likely to occur on a company-to-company basis The goal is to determine whether the stock price is a good representation of the actual value of the company This is done based on the financial well-being of the company how it is being managed and how consumers are receiving the companyrsquos products and servicesFundamental analysis asks whether the companys ability and performance are worth the price of the stock If the stock seems overpriced based on the companys business operations its price is likely to fall and vice versa Fundamental analysis assumes that the quality and competence of a business model will be reflected in its stock performance

Technical Analysis

Technical analysis uses a variety of different tools to observe in depth the effects of supply and demand Technical analysis generally discounts the underlying health of the company as it might be reflected in a fundamental analysis instead favoring an examination of the basic trajectory of a companys stockAlthough this approach has its drawbacks it offers a special perspective that might be more relevant to stock investment because stock prices sometimes rise and fall completely independently of the companys operations In general a more detailed and extensive stock history will produce more accurate results through technical analysis

Fundamental analysis is the examination of the underlying forces that affect the well being of the economy industry groups and companies As with most analysis the goal is to derive a forecast and profit from future price movements

At the company level fundamental analysis may involve examination of financial data management business concept and competition At the industry level there might be an examination of supply and demand forces for the products offered For the national economy fundamental analysis might focus on economic data to assess the present and future growth of the economy

Page | 6

To forecast future stock prices fundamental analysis combines economic industry and company analysis to derive a stocks current fair value and forecast future value If fair value is not equal to the current stock price fundamental analysts believe that the stock is either over or under valued and the market price will ultimately gravitate towards fair value Fundamentalists do not heed the advice of the random walkers and believe that markets are weak-form efficient By believing that prices do not accurately reflect all available information fundamental analysts look to capitalize on perceived price discrepancies

Fundamental analysis serves to answer questions such as

Is the companyrsquos 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

This all together boils down to one question that is Is the companyrsquos stock a good investment

OBJECTIVES-

To evaluate the present and future earning capacity of a share based on the Economy Industry and Company fundamentals and thereby assess the intrinsic valueeconomic worth of the share for investment

To understand the performance of companies through its financials and thereby assessing the future prospect of the company

Compare past and current records of the company and judge its performance based on various ratios and findings so as to track the records find out whether the company has meet its expectations regarding sales and profitability

Suggest investors about some of the shares which can be purchased and can earn return over their investments over a certain period of time

Page | 7

SCOPE OF STUDY- a) Long-term Trends

Fundamental analysis is good for long-term investments based on long-term trends very long-term The ability to identify and predict long-term economic demographic technological or consumer trends can benefit patient investors who pick the right industry groups or companies

b) Value Spotting

Sound fundamental analysis will help identify companies that represent a good value Some of the most legendary investors think long-term and value Graham and Dodd Warren Buffett and John Neff are seen as the champions of value investing Fundamental analysis can help uncover companies with valuable assets a strong balance sheet stable earnings and staying power

c) Business Acumen

One of the most obvious but less tangible rewards of fundamental analysis is the development of a thorough understanding of the business After such painstaking research and analysis an investor will be familiar with the key revenue and profit drivers behind a company Earnings and earnings expectations can be potent drivers of equity prices Even some technicians will agree to that A good understanding can help investors avoid companies that are prone to shortfalls and identify those that continue to deliver In addition to understanding the business fundamental analysis allows investors to develop an understanding of the key value drivers and companies within an industry A stocks price is heavily influenced by its industry group By studying these groups investors can better position themselves to identify opportunities that are high-risk (tech) low-risk (utilities) growth oriented (computer) value driven (oil) non-cyclical (consumer staples) cyclical (transportation) or income-oriented (high yield)

d) Knowing Whos Who

Stocks move as a group By understanding a companys business investors can better position themselves to categorize stocks within their relevant industry group Business can change rapidly and with it the revenue mix of a company This happened to many of the pure Internet retailers which were not really Internet companies but plain retailers Knowing a companys business and being able to place it in a group can make a huge difference in relative valuations

FUNDAMENTAL ANALYSISFundamental Analysis involves a three-step examination which calls for

Understanding of the macro- economic environment and developments (Economy Analysis)

Analyzing the prospects of the industry to which the firm belongs (Industry Analysis)

Page | 8

Assessing the projected performance of the company and the intrinsic value of its share (Company Analysis)

ECONOMY ANALYSIS

Economic analysis is a process whereby strengths and weaknesses of an economy are analyzed Economic analysis is important in order to understand exact condition of an economy It can cover a number of important economic issues that keep cropping up within a particular economy which is being analyzed A study of the economic variables would give an idea about future corporate earnings and the payment of dividends and interest to investors

Factors to be consider in Economy Analysis

Economic indicators or business indicators are markers about an economy Future performance predictions and economic performances can be analyzed through these indicators There are economic summaries various indices and earnings reports like housing unemployment bankruptcies Consumer Price Index (a measure for inflation) stock market prices industrial production retail sales and money supply changes in economic indicators

Indicators which change about same time and in same direction with economy are called coincident indicators These provide information regarding present economic state Coincident indicators include retail sales GDP industrial production and personal income A coincident index can be used to identify troughs and peaks in a business cycle

These indicators are studied in a branch of macroeconomics called ldquobusiness cyclesrdquo Economic indicators have three major attributes - relation to business cycle or an economy frequency of data and timing In relation to business cycle or economy indicators have one of three different economic relationships like procyclic counter cyclic and acyclic Procyclic economic indicator moves along same direction as an economy It means that when

Page | 9

economy is well this number increases An example is gross domestic product (GDP) Counter cyclic economic indicator moves in reverse direction of economy Unemployment rate increases as economy gets worse Acyclic economic indicator doesnrsquot have any relation to an economyrsquos health An example would be a sports result which doesnrsquot have any effect on economy

Economy-wide Factors

Growth rates of the economy GDP GNP NNP

Inflation rate Interest rates Government Revenue Expenditure and Deficits Exchange rates Infrastructure Monsoon Economic and political stability

INDUSTRY ANALYSIS-

It refers to an evaluation of the relative strengths and weakness of industries Industry analysis is a type of investment research that begins by focusing on the status of an industry or an industrial sector

This part is divided into the four steps that is

Sensitivity to the Business Cycle

Industry Life Cycle Analysis

Study of the Structure and Characteristics of an Industry

Profit Potential of Industries Porter Model

1) Sensitivity to the Business cycle-

a) The sensitivity of the firmrsquos sales to the business condition- It shows the performance of the business of the firm with respect to the business environment or condition

b) The Operating Leverage

c) The Financial Leverage

2) Industry Life Cycle Analysis-

A form of fundamental analysis involving the process of making investment decisions based on the different stages an industry is at during a given point in time The type of position taken will depend on firm specific characteristics as well as where the industry is at in its life cycle

Page | 10

1) Under the production and market introduction phases revenues and earnings are likely to be very low which makes investments during these phases more speculative in nature Revenues and earnings are likely to be low because there is little demand for the product or the product is not completed Expenses are likely to be very large during these phases as a company or industry spends a lot on marketing and research

2) Through the growth phase revenues and margins are likely to be on the rise due to an increase in demand for a product and the pricing power the firm has due to a small number of competitors Stock prices are likely to rise during this phase

3) During the maturity and stability phase revenues and margins are likely to decline due to lower sales demand and more competition Stock prices are likely to decline during these phases

3) Study of the Structure and Characteristics of An Industries-

The study of structure and characteristics of an industries also an important in the process of industry analysis for the purpose of investment This study will help us in deciding the future of the industry whether it is good or bad With the help of this study we may also know about the future growth on the industry Following are some points which will be consider by the investor for this study

Demand and Supply Gap in Product or services Competitive Conditions in the Industry Permanence Labour Conditions or Labour attitude towards the work in industries Attitude of Government and rules amp regulation of government also the facilities

and subsidies provided by government Supply of Raw Materials Cost Structure

4) Profit Potential of Industries ndash Porter Model-

Each industry is different and using one cookie-cutter approach to analysis is sure to create problems Imagine for example comparing the PE ratio of a tech company to that of a utility Because you are in effect comparing apples to oranges the analysis is next to useless In each section well take an in-depth look at the different valuation techniques and buzz words used in a particular industry complete a 5-forces analysis on the state of the market and point you in the direction of industry-specific resources

The model originated from Michael E Porters 1980 book Competitive Strategy Techniques for Analyzing Industries and Competitors Since then it has become a frequently used tool for analyzing a companys industry structure and its corporate strategy

In his book Porter identified five competitive forces that shape every single industry and market These forces help us to analyze everything from the intensity of competition to the profitability and attractiveness of an industry

Page | 11

Following figure shows the relationship between the different competitive forces

1) Threat of New Entrants

The easier it is for new companies to enter the industry the more cutthroat competition there will be Factors that can limit the threat of new entrants are known as barriers to entry Some examples include

Existing loyalty to major brands Incentives for using a particular buyer (such as frequent shopper

programs) High fixed costs Scarcity of resources High costs of switching companies Government restrictions or legislation

2) Power of Suppliers

This is how much pressure suppliers can place on a business If one supplier has a large enough impact to affect a companys margins and volumes then it holds substantial power Here are a few reasons that suppliers might have power

There are very few suppliers of a particular product There are no substitutes Switching to another (competitive) product is very costly The product is extremely important to buyers - cant do without it The supplying industry has a higher profitability than the buying industry

Page | 12

3) Power of Buyers

This is how much pressure customers can place on a business If one customer has a large enough impact to affect a companys margins and volumes then the customer hold substantial power Here are a few reasons that customers might have power

Small number of buyers Purchases large volumes Switching to another (competitive) product is simple The product is not extremely important to buyers they can do

without the product for a period of time Customers are price sensitive

4) Availability of Substitutes ndash

What is the likelihood that someone will switch to a competitive product or service If the cost of switching is low then this poses a serious threat Here are a few factors that can affect the threat of substitutes

The main issue is the similarity of substitutes For example if the price of coffee rises substantially a coffee drinker may switch over to a beverage like tea

If substitutes are similar it can be viewed in the same light as a new entrant

5) Competitive Rivalry ndash

This describes the intensity of competition between existing firms in an industry Highly competitive industries generally earn low returns because the cost of competition is high A highly competitive market might result from

Many players of about the same size there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth companies can only

grow by stealing customers away from competitors5) Cross-Sectional Analysis-

A type of analysis an investor analyst or portfolio manager may conduct on a company in relation to that companys industry or industry peers The analysis compares one company against the industry it operates within or directly against certain competitors within the same industry in an attempt to discover the best of the breed

When conducting a cross-sectional analysis the analyst seeks to identify by using comparative metrics the valuation debt-load future outlook andor operational efficiency of the target company This allows the analyst to evaluate the target companys efficiency in these areas and to make the best investment choice among a group of competitors or the industry as a whole

When comparing the target firm to competitors the analyst must be careful to

Page | 13

consider the unique operating characteristics of each company and how that will affect any comparative metrics used

COMPANY ANALYSIS

Before diving into a companys financial statements were going to take a look at some of the qualitative aspects of a company Fundamental analysis seeks to determine the intrinsic value of a companys stock But since qualitative factors by definition represent aspects of a companys 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 weve demonstrated you cant ignore the less tangible characteristics of a company In this section we are going to highlight some of the company-specific qualitative factors that one should be aware of

a) Business Model-

Even before an investor looks at a companys financial statements or does any research one of the most important questions that should be asked is What exactly does the company do This is referred to as a companys business model ndash its how a company makes money You can get a good overview of a companys business model by checking out its website or by reading the document which company submitted to the SEBI

At the very least 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 doesnt understand them This is not to say the technology sector is bad but its not Buffetts area of expertise he doesnt feel comfortable investing in this area Similarly unless you understand a companys business model you dont know what the drivers are for future growth and you leave yourself vulnerable to being blindsided like shareholders of Boston Chicken were

b) Competitive Advantage

Another business consideration for investors is competitive advantage A companys long-term success is driven largely by its ability to maintain a competitive advantage - and keep it Powerful competitive advantages such as Coca Colas brand name and Microsofts 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

c) 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 cant set up a meeting with management if you want to invest a few lakhs or crore of rupee On the other hand if you are a fund manager interested in

Page | 14

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 Dont expect to find anything useful here Lets be honest Were looking for dirt and no company is going to put negative information on its corporate website

d) 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

Fortunately corporate governance policies typically cover a few general areas structure of the board of directors stakeholder rights and financial and information transparency With a little research and the right questions in mind investors can get a good idea about a companys corporate governance

e) Financial and Information Transparency

This aspect of governance relates to the quality and timeliness of a companys financial disclosures and operational happenings Sufficient transparency implies that a companys financial releases are written in a manner that stakeholders can follow what management is doing and therefore have a clear understanding of the companys current financial situation

f) Stakeholder Rights

This aspect of corporate governance examines the extent that a companys policies are benefiting stakeholder interests notably shareholder interests Ultimately as owners of the company shareholders should have some access to the board of directors if they have concerns or want something addressed Therefore companies with good governance give shareholders a certain amount of ownership voting rights to call meetings to discuss pressing issues with the board

g) Financial statement analysis

Balance sheet walk demonstrates financial statement analysis using the relationship of the key financial statements the income statement cash flow and balance sheet

We show the financial statement links Most business people tend to look at each of the financial statements in turn Our contribution is to show that all three key financial statements are linked The income statement shows the potential cash flows The cash flow statement shows the real cash flows The balance sheet shows the cash owing or payable

Page | 15

Income statement

The income statement (or profit and loss) shows revenue cost of sales expenses interest and tax but does not show the cash flow for a business

Balance sheet

The balance sheet shows the assets and liabilities for the business On the balance sheet we can see the cash balance at the start and end of the period However the details of all the cash flows cannot be gleaned from the balance sheet

Cash flow

The cash flow statement shows the cash flows for the business Here we see the operating cash flows financing cash flows and investing cash flows

The income statement cash flow and balance sheet above are not independent of each other Financial statements links demonstrates how they work together This understanding helps with financial statement analysis

Financial Statement Links

Where is the relationship between the key financial statements Take a look at this example

1 The income statement shows revenue of 5000002 The cash flow statement shows the cash received from customers is 3750003 The balance sheet shows under assets the difference ie accounts receivables is

125000 Fundamental analysis is the process of looking at a business at the basic or fundamental financial level This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes The goal is to determine the current worth and more importantly how the market values the stock

Following are the key tools of fundamental analysis and what they tell you Even if you donrsquot plan to do in-depth fundamental analysis yourself it will help you follow stocks more closely if you understand the key ratios and terms

FUNDAMENTAL ANALYSIS TOOLS These are the most popular tools of fundamental analysis They focus on earnings growth and value in the market No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

Earnings

Page | 16

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 4: Fundamental Analysis of securities

TABLE OF CONTENTS

SR NO PARTICULARS PAGE NO

1 Declaration 02

2 Acknowledgement 03

3 Introduction 06

4 Objectives 07

5 Scope of Study 08

6 Fundamental Analysis 08

7 Economy Analysis 09

8 Industry Analysis 10

9 Company Analysis 14

10 Fundamental Analysis Tools 16

11 IIFL - Company Profile 23

12 Introduction ndash About IIFL 23

13 Corporate Structure 27

14 Top Management 28

15 Milestones 29

16 IIFL in Business 30

17 Data Presentation Analysis amp Interpretations

33

18 Steel Sector - Introduction 33

Page | 4

19 Tata Steel - Introduction 34

20 Financials of Tata Steel 37

21 Interpretations ndash Tata Steel 44

22 IT Sector - Introduction 46

23 Wipro - Introduction 47

24 Financials of Wipro 49

25 Interpretations - Wipro 54

26 Pharma Sector - Introduction 56

27 Sun Pharma ndash Introduction 57

28 Financials of Sun Pharma 59

29 Interpretations ndash Sun Pharma 64

30 Findings amp Conclusion 66

31 Suggestions 67

32 Conclusions 69

33 Bibliography 70

Page | 5

FUNDAMENTAL ANALYSIS OF A SECURITY

INTRODUCTION

11 INTRODUCTIONStock market analysis is crucial because it influences the choices investors make sometimes to very high degrees A wide range of stock market analyses is available to investors Not all of them are useful and some can be detrimental or even fatal to investors An awareness of the different types of analyses can help investors stay informed and make their own monetary decisions wisely

Fundamental Analysis

Fundamental analysis is more likely to occur on a company-to-company basis The goal is to determine whether the stock price is a good representation of the actual value of the company This is done based on the financial well-being of the company how it is being managed and how consumers are receiving the companyrsquos products and servicesFundamental analysis asks whether the companys ability and performance are worth the price of the stock If the stock seems overpriced based on the companys business operations its price is likely to fall and vice versa Fundamental analysis assumes that the quality and competence of a business model will be reflected in its stock performance

Technical Analysis

Technical analysis uses a variety of different tools to observe in depth the effects of supply and demand Technical analysis generally discounts the underlying health of the company as it might be reflected in a fundamental analysis instead favoring an examination of the basic trajectory of a companys stockAlthough this approach has its drawbacks it offers a special perspective that might be more relevant to stock investment because stock prices sometimes rise and fall completely independently of the companys operations In general a more detailed and extensive stock history will produce more accurate results through technical analysis

Fundamental analysis is the examination of the underlying forces that affect the well being of the economy industry groups and companies As with most analysis the goal is to derive a forecast and profit from future price movements

At the company level fundamental analysis may involve examination of financial data management business concept and competition At the industry level there might be an examination of supply and demand forces for the products offered For the national economy fundamental analysis might focus on economic data to assess the present and future growth of the economy

Page | 6

To forecast future stock prices fundamental analysis combines economic industry and company analysis to derive a stocks current fair value and forecast future value If fair value is not equal to the current stock price fundamental analysts believe that the stock is either over or under valued and the market price will ultimately gravitate towards fair value Fundamentalists do not heed the advice of the random walkers and believe that markets are weak-form efficient By believing that prices do not accurately reflect all available information fundamental analysts look to capitalize on perceived price discrepancies

Fundamental analysis serves to answer questions such as

Is the companyrsquos 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

This all together boils down to one question that is Is the companyrsquos stock a good investment

OBJECTIVES-

To evaluate the present and future earning capacity of a share based on the Economy Industry and Company fundamentals and thereby assess the intrinsic valueeconomic worth of the share for investment

To understand the performance of companies through its financials and thereby assessing the future prospect of the company

Compare past and current records of the company and judge its performance based on various ratios and findings so as to track the records find out whether the company has meet its expectations regarding sales and profitability

Suggest investors about some of the shares which can be purchased and can earn return over their investments over a certain period of time

Page | 7

SCOPE OF STUDY- a) Long-term Trends

Fundamental analysis is good for long-term investments based on long-term trends very long-term The ability to identify and predict long-term economic demographic technological or consumer trends can benefit patient investors who pick the right industry groups or companies

b) Value Spotting

Sound fundamental analysis will help identify companies that represent a good value Some of the most legendary investors think long-term and value Graham and Dodd Warren Buffett and John Neff are seen as the champions of value investing Fundamental analysis can help uncover companies with valuable assets a strong balance sheet stable earnings and staying power

c) Business Acumen

One of the most obvious but less tangible rewards of fundamental analysis is the development of a thorough understanding of the business After such painstaking research and analysis an investor will be familiar with the key revenue and profit drivers behind a company Earnings and earnings expectations can be potent drivers of equity prices Even some technicians will agree to that A good understanding can help investors avoid companies that are prone to shortfalls and identify those that continue to deliver In addition to understanding the business fundamental analysis allows investors to develop an understanding of the key value drivers and companies within an industry A stocks price is heavily influenced by its industry group By studying these groups investors can better position themselves to identify opportunities that are high-risk (tech) low-risk (utilities) growth oriented (computer) value driven (oil) non-cyclical (consumer staples) cyclical (transportation) or income-oriented (high yield)

d) Knowing Whos Who

Stocks move as a group By understanding a companys business investors can better position themselves to categorize stocks within their relevant industry group Business can change rapidly and with it the revenue mix of a company This happened to many of the pure Internet retailers which were not really Internet companies but plain retailers Knowing a companys business and being able to place it in a group can make a huge difference in relative valuations

FUNDAMENTAL ANALYSISFundamental Analysis involves a three-step examination which calls for

Understanding of the macro- economic environment and developments (Economy Analysis)

Analyzing the prospects of the industry to which the firm belongs (Industry Analysis)

Page | 8

Assessing the projected performance of the company and the intrinsic value of its share (Company Analysis)

ECONOMY ANALYSIS

Economic analysis is a process whereby strengths and weaknesses of an economy are analyzed Economic analysis is important in order to understand exact condition of an economy It can cover a number of important economic issues that keep cropping up within a particular economy which is being analyzed A study of the economic variables would give an idea about future corporate earnings and the payment of dividends and interest to investors

Factors to be consider in Economy Analysis

Economic indicators or business indicators are markers about an economy Future performance predictions and economic performances can be analyzed through these indicators There are economic summaries various indices and earnings reports like housing unemployment bankruptcies Consumer Price Index (a measure for inflation) stock market prices industrial production retail sales and money supply changes in economic indicators

Indicators which change about same time and in same direction with economy are called coincident indicators These provide information regarding present economic state Coincident indicators include retail sales GDP industrial production and personal income A coincident index can be used to identify troughs and peaks in a business cycle

These indicators are studied in a branch of macroeconomics called ldquobusiness cyclesrdquo Economic indicators have three major attributes - relation to business cycle or an economy frequency of data and timing In relation to business cycle or economy indicators have one of three different economic relationships like procyclic counter cyclic and acyclic Procyclic economic indicator moves along same direction as an economy It means that when

Page | 9

economy is well this number increases An example is gross domestic product (GDP) Counter cyclic economic indicator moves in reverse direction of economy Unemployment rate increases as economy gets worse Acyclic economic indicator doesnrsquot have any relation to an economyrsquos health An example would be a sports result which doesnrsquot have any effect on economy

Economy-wide Factors

Growth rates of the economy GDP GNP NNP

Inflation rate Interest rates Government Revenue Expenditure and Deficits Exchange rates Infrastructure Monsoon Economic and political stability

INDUSTRY ANALYSIS-

It refers to an evaluation of the relative strengths and weakness of industries Industry analysis is a type of investment research that begins by focusing on the status of an industry or an industrial sector

This part is divided into the four steps that is

Sensitivity to the Business Cycle

Industry Life Cycle Analysis

Study of the Structure and Characteristics of an Industry

Profit Potential of Industries Porter Model

1) Sensitivity to the Business cycle-

a) The sensitivity of the firmrsquos sales to the business condition- It shows the performance of the business of the firm with respect to the business environment or condition

b) The Operating Leverage

c) The Financial Leverage

2) Industry Life Cycle Analysis-

A form of fundamental analysis involving the process of making investment decisions based on the different stages an industry is at during a given point in time The type of position taken will depend on firm specific characteristics as well as where the industry is at in its life cycle

Page | 10

1) Under the production and market introduction phases revenues and earnings are likely to be very low which makes investments during these phases more speculative in nature Revenues and earnings are likely to be low because there is little demand for the product or the product is not completed Expenses are likely to be very large during these phases as a company or industry spends a lot on marketing and research

2) Through the growth phase revenues and margins are likely to be on the rise due to an increase in demand for a product and the pricing power the firm has due to a small number of competitors Stock prices are likely to rise during this phase

3) During the maturity and stability phase revenues and margins are likely to decline due to lower sales demand and more competition Stock prices are likely to decline during these phases

3) Study of the Structure and Characteristics of An Industries-

The study of structure and characteristics of an industries also an important in the process of industry analysis for the purpose of investment This study will help us in deciding the future of the industry whether it is good or bad With the help of this study we may also know about the future growth on the industry Following are some points which will be consider by the investor for this study

Demand and Supply Gap in Product or services Competitive Conditions in the Industry Permanence Labour Conditions or Labour attitude towards the work in industries Attitude of Government and rules amp regulation of government also the facilities

and subsidies provided by government Supply of Raw Materials Cost Structure

4) Profit Potential of Industries ndash Porter Model-

Each industry is different and using one cookie-cutter approach to analysis is sure to create problems Imagine for example comparing the PE ratio of a tech company to that of a utility Because you are in effect comparing apples to oranges the analysis is next to useless In each section well take an in-depth look at the different valuation techniques and buzz words used in a particular industry complete a 5-forces analysis on the state of the market and point you in the direction of industry-specific resources

The model originated from Michael E Porters 1980 book Competitive Strategy Techniques for Analyzing Industries and Competitors Since then it has become a frequently used tool for analyzing a companys industry structure and its corporate strategy

In his book Porter identified five competitive forces that shape every single industry and market These forces help us to analyze everything from the intensity of competition to the profitability and attractiveness of an industry

Page | 11

Following figure shows the relationship between the different competitive forces

1) Threat of New Entrants

The easier it is for new companies to enter the industry the more cutthroat competition there will be Factors that can limit the threat of new entrants are known as barriers to entry Some examples include

Existing loyalty to major brands Incentives for using a particular buyer (such as frequent shopper

programs) High fixed costs Scarcity of resources High costs of switching companies Government restrictions or legislation

2) Power of Suppliers

This is how much pressure suppliers can place on a business If one supplier has a large enough impact to affect a companys margins and volumes then it holds substantial power Here are a few reasons that suppliers might have power

There are very few suppliers of a particular product There are no substitutes Switching to another (competitive) product is very costly The product is extremely important to buyers - cant do without it The supplying industry has a higher profitability than the buying industry

Page | 12

3) Power of Buyers

This is how much pressure customers can place on a business If one customer has a large enough impact to affect a companys margins and volumes then the customer hold substantial power Here are a few reasons that customers might have power

Small number of buyers Purchases large volumes Switching to another (competitive) product is simple The product is not extremely important to buyers they can do

without the product for a period of time Customers are price sensitive

4) Availability of Substitutes ndash

What is the likelihood that someone will switch to a competitive product or service If the cost of switching is low then this poses a serious threat Here are a few factors that can affect the threat of substitutes

The main issue is the similarity of substitutes For example if the price of coffee rises substantially a coffee drinker may switch over to a beverage like tea

If substitutes are similar it can be viewed in the same light as a new entrant

5) Competitive Rivalry ndash

This describes the intensity of competition between existing firms in an industry Highly competitive industries generally earn low returns because the cost of competition is high A highly competitive market might result from

Many players of about the same size there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth companies can only

grow by stealing customers away from competitors5) Cross-Sectional Analysis-

A type of analysis an investor analyst or portfolio manager may conduct on a company in relation to that companys industry or industry peers The analysis compares one company against the industry it operates within or directly against certain competitors within the same industry in an attempt to discover the best of the breed

When conducting a cross-sectional analysis the analyst seeks to identify by using comparative metrics the valuation debt-load future outlook andor operational efficiency of the target company This allows the analyst to evaluate the target companys efficiency in these areas and to make the best investment choice among a group of competitors or the industry as a whole

When comparing the target firm to competitors the analyst must be careful to

Page | 13

consider the unique operating characteristics of each company and how that will affect any comparative metrics used

COMPANY ANALYSIS

Before diving into a companys financial statements were going to take a look at some of the qualitative aspects of a company Fundamental analysis seeks to determine the intrinsic value of a companys stock But since qualitative factors by definition represent aspects of a companys 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 weve demonstrated you cant ignore the less tangible characteristics of a company In this section we are going to highlight some of the company-specific qualitative factors that one should be aware of

a) Business Model-

Even before an investor looks at a companys financial statements or does any research one of the most important questions that should be asked is What exactly does the company do This is referred to as a companys business model ndash its how a company makes money You can get a good overview of a companys business model by checking out its website or by reading the document which company submitted to the SEBI

At the very least 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 doesnt understand them This is not to say the technology sector is bad but its not Buffetts area of expertise he doesnt feel comfortable investing in this area Similarly unless you understand a companys business model you dont know what the drivers are for future growth and you leave yourself vulnerable to being blindsided like shareholders of Boston Chicken were

b) Competitive Advantage

Another business consideration for investors is competitive advantage A companys long-term success is driven largely by its ability to maintain a competitive advantage - and keep it Powerful competitive advantages such as Coca Colas brand name and Microsofts 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

c) 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 cant set up a meeting with management if you want to invest a few lakhs or crore of rupee On the other hand if you are a fund manager interested in

Page | 14

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 Dont expect to find anything useful here Lets be honest Were looking for dirt and no company is going to put negative information on its corporate website

d) 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

Fortunately corporate governance policies typically cover a few general areas structure of the board of directors stakeholder rights and financial and information transparency With a little research and the right questions in mind investors can get a good idea about a companys corporate governance

e) Financial and Information Transparency

This aspect of governance relates to the quality and timeliness of a companys financial disclosures and operational happenings Sufficient transparency implies that a companys financial releases are written in a manner that stakeholders can follow what management is doing and therefore have a clear understanding of the companys current financial situation

f) Stakeholder Rights

This aspect of corporate governance examines the extent that a companys policies are benefiting stakeholder interests notably shareholder interests Ultimately as owners of the company shareholders should have some access to the board of directors if they have concerns or want something addressed Therefore companies with good governance give shareholders a certain amount of ownership voting rights to call meetings to discuss pressing issues with the board

g) Financial statement analysis

Balance sheet walk demonstrates financial statement analysis using the relationship of the key financial statements the income statement cash flow and balance sheet

We show the financial statement links Most business people tend to look at each of the financial statements in turn Our contribution is to show that all three key financial statements are linked The income statement shows the potential cash flows The cash flow statement shows the real cash flows The balance sheet shows the cash owing or payable

Page | 15

Income statement

The income statement (or profit and loss) shows revenue cost of sales expenses interest and tax but does not show the cash flow for a business

Balance sheet

The balance sheet shows the assets and liabilities for the business On the balance sheet we can see the cash balance at the start and end of the period However the details of all the cash flows cannot be gleaned from the balance sheet

Cash flow

The cash flow statement shows the cash flows for the business Here we see the operating cash flows financing cash flows and investing cash flows

The income statement cash flow and balance sheet above are not independent of each other Financial statements links demonstrates how they work together This understanding helps with financial statement analysis

Financial Statement Links

Where is the relationship between the key financial statements Take a look at this example

1 The income statement shows revenue of 5000002 The cash flow statement shows the cash received from customers is 3750003 The balance sheet shows under assets the difference ie accounts receivables is

125000 Fundamental analysis is the process of looking at a business at the basic or fundamental financial level This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes The goal is to determine the current worth and more importantly how the market values the stock

Following are the key tools of fundamental analysis and what they tell you Even if you donrsquot plan to do in-depth fundamental analysis yourself it will help you follow stocks more closely if you understand the key ratios and terms

FUNDAMENTAL ANALYSIS TOOLS These are the most popular tools of fundamental analysis They focus on earnings growth and value in the market No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

Earnings

Page | 16

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 5: Fundamental Analysis of securities

19 Tata Steel - Introduction 34

20 Financials of Tata Steel 37

21 Interpretations ndash Tata Steel 44

22 IT Sector - Introduction 46

23 Wipro - Introduction 47

24 Financials of Wipro 49

25 Interpretations - Wipro 54

26 Pharma Sector - Introduction 56

27 Sun Pharma ndash Introduction 57

28 Financials of Sun Pharma 59

29 Interpretations ndash Sun Pharma 64

30 Findings amp Conclusion 66

31 Suggestions 67

32 Conclusions 69

33 Bibliography 70

Page | 5

FUNDAMENTAL ANALYSIS OF A SECURITY

INTRODUCTION

11 INTRODUCTIONStock market analysis is crucial because it influences the choices investors make sometimes to very high degrees A wide range of stock market analyses is available to investors Not all of them are useful and some can be detrimental or even fatal to investors An awareness of the different types of analyses can help investors stay informed and make their own monetary decisions wisely

Fundamental Analysis

Fundamental analysis is more likely to occur on a company-to-company basis The goal is to determine whether the stock price is a good representation of the actual value of the company This is done based on the financial well-being of the company how it is being managed and how consumers are receiving the companyrsquos products and servicesFundamental analysis asks whether the companys ability and performance are worth the price of the stock If the stock seems overpriced based on the companys business operations its price is likely to fall and vice versa Fundamental analysis assumes that the quality and competence of a business model will be reflected in its stock performance

Technical Analysis

Technical analysis uses a variety of different tools to observe in depth the effects of supply and demand Technical analysis generally discounts the underlying health of the company as it might be reflected in a fundamental analysis instead favoring an examination of the basic trajectory of a companys stockAlthough this approach has its drawbacks it offers a special perspective that might be more relevant to stock investment because stock prices sometimes rise and fall completely independently of the companys operations In general a more detailed and extensive stock history will produce more accurate results through technical analysis

Fundamental analysis is the examination of the underlying forces that affect the well being of the economy industry groups and companies As with most analysis the goal is to derive a forecast and profit from future price movements

At the company level fundamental analysis may involve examination of financial data management business concept and competition At the industry level there might be an examination of supply and demand forces for the products offered For the national economy fundamental analysis might focus on economic data to assess the present and future growth of the economy

Page | 6

To forecast future stock prices fundamental analysis combines economic industry and company analysis to derive a stocks current fair value and forecast future value If fair value is not equal to the current stock price fundamental analysts believe that the stock is either over or under valued and the market price will ultimately gravitate towards fair value Fundamentalists do not heed the advice of the random walkers and believe that markets are weak-form efficient By believing that prices do not accurately reflect all available information fundamental analysts look to capitalize on perceived price discrepancies

Fundamental analysis serves to answer questions such as

Is the companyrsquos 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

This all together boils down to one question that is Is the companyrsquos stock a good investment

OBJECTIVES-

To evaluate the present and future earning capacity of a share based on the Economy Industry and Company fundamentals and thereby assess the intrinsic valueeconomic worth of the share for investment

To understand the performance of companies through its financials and thereby assessing the future prospect of the company

Compare past and current records of the company and judge its performance based on various ratios and findings so as to track the records find out whether the company has meet its expectations regarding sales and profitability

Suggest investors about some of the shares which can be purchased and can earn return over their investments over a certain period of time

Page | 7

SCOPE OF STUDY- a) Long-term Trends

Fundamental analysis is good for long-term investments based on long-term trends very long-term The ability to identify and predict long-term economic demographic technological or consumer trends can benefit patient investors who pick the right industry groups or companies

b) Value Spotting

Sound fundamental analysis will help identify companies that represent a good value Some of the most legendary investors think long-term and value Graham and Dodd Warren Buffett and John Neff are seen as the champions of value investing Fundamental analysis can help uncover companies with valuable assets a strong balance sheet stable earnings and staying power

c) Business Acumen

One of the most obvious but less tangible rewards of fundamental analysis is the development of a thorough understanding of the business After such painstaking research and analysis an investor will be familiar with the key revenue and profit drivers behind a company Earnings and earnings expectations can be potent drivers of equity prices Even some technicians will agree to that A good understanding can help investors avoid companies that are prone to shortfalls and identify those that continue to deliver In addition to understanding the business fundamental analysis allows investors to develop an understanding of the key value drivers and companies within an industry A stocks price is heavily influenced by its industry group By studying these groups investors can better position themselves to identify opportunities that are high-risk (tech) low-risk (utilities) growth oriented (computer) value driven (oil) non-cyclical (consumer staples) cyclical (transportation) or income-oriented (high yield)

d) Knowing Whos Who

Stocks move as a group By understanding a companys business investors can better position themselves to categorize stocks within their relevant industry group Business can change rapidly and with it the revenue mix of a company This happened to many of the pure Internet retailers which were not really Internet companies but plain retailers Knowing a companys business and being able to place it in a group can make a huge difference in relative valuations

FUNDAMENTAL ANALYSISFundamental Analysis involves a three-step examination which calls for

Understanding of the macro- economic environment and developments (Economy Analysis)

Analyzing the prospects of the industry to which the firm belongs (Industry Analysis)

Page | 8

Assessing the projected performance of the company and the intrinsic value of its share (Company Analysis)

ECONOMY ANALYSIS

Economic analysis is a process whereby strengths and weaknesses of an economy are analyzed Economic analysis is important in order to understand exact condition of an economy It can cover a number of important economic issues that keep cropping up within a particular economy which is being analyzed A study of the economic variables would give an idea about future corporate earnings and the payment of dividends and interest to investors

Factors to be consider in Economy Analysis

Economic indicators or business indicators are markers about an economy Future performance predictions and economic performances can be analyzed through these indicators There are economic summaries various indices and earnings reports like housing unemployment bankruptcies Consumer Price Index (a measure for inflation) stock market prices industrial production retail sales and money supply changes in economic indicators

Indicators which change about same time and in same direction with economy are called coincident indicators These provide information regarding present economic state Coincident indicators include retail sales GDP industrial production and personal income A coincident index can be used to identify troughs and peaks in a business cycle

These indicators are studied in a branch of macroeconomics called ldquobusiness cyclesrdquo Economic indicators have three major attributes - relation to business cycle or an economy frequency of data and timing In relation to business cycle or economy indicators have one of three different economic relationships like procyclic counter cyclic and acyclic Procyclic economic indicator moves along same direction as an economy It means that when

Page | 9

economy is well this number increases An example is gross domestic product (GDP) Counter cyclic economic indicator moves in reverse direction of economy Unemployment rate increases as economy gets worse Acyclic economic indicator doesnrsquot have any relation to an economyrsquos health An example would be a sports result which doesnrsquot have any effect on economy

Economy-wide Factors

Growth rates of the economy GDP GNP NNP

Inflation rate Interest rates Government Revenue Expenditure and Deficits Exchange rates Infrastructure Monsoon Economic and political stability

INDUSTRY ANALYSIS-

It refers to an evaluation of the relative strengths and weakness of industries Industry analysis is a type of investment research that begins by focusing on the status of an industry or an industrial sector

This part is divided into the four steps that is

Sensitivity to the Business Cycle

Industry Life Cycle Analysis

Study of the Structure and Characteristics of an Industry

Profit Potential of Industries Porter Model

1) Sensitivity to the Business cycle-

a) The sensitivity of the firmrsquos sales to the business condition- It shows the performance of the business of the firm with respect to the business environment or condition

b) The Operating Leverage

c) The Financial Leverage

2) Industry Life Cycle Analysis-

A form of fundamental analysis involving the process of making investment decisions based on the different stages an industry is at during a given point in time The type of position taken will depend on firm specific characteristics as well as where the industry is at in its life cycle

Page | 10

1) Under the production and market introduction phases revenues and earnings are likely to be very low which makes investments during these phases more speculative in nature Revenues and earnings are likely to be low because there is little demand for the product or the product is not completed Expenses are likely to be very large during these phases as a company or industry spends a lot on marketing and research

2) Through the growth phase revenues and margins are likely to be on the rise due to an increase in demand for a product and the pricing power the firm has due to a small number of competitors Stock prices are likely to rise during this phase

3) During the maturity and stability phase revenues and margins are likely to decline due to lower sales demand and more competition Stock prices are likely to decline during these phases

3) Study of the Structure and Characteristics of An Industries-

The study of structure and characteristics of an industries also an important in the process of industry analysis for the purpose of investment This study will help us in deciding the future of the industry whether it is good or bad With the help of this study we may also know about the future growth on the industry Following are some points which will be consider by the investor for this study

Demand and Supply Gap in Product or services Competitive Conditions in the Industry Permanence Labour Conditions or Labour attitude towards the work in industries Attitude of Government and rules amp regulation of government also the facilities

and subsidies provided by government Supply of Raw Materials Cost Structure

4) Profit Potential of Industries ndash Porter Model-

Each industry is different and using one cookie-cutter approach to analysis is sure to create problems Imagine for example comparing the PE ratio of a tech company to that of a utility Because you are in effect comparing apples to oranges the analysis is next to useless In each section well take an in-depth look at the different valuation techniques and buzz words used in a particular industry complete a 5-forces analysis on the state of the market and point you in the direction of industry-specific resources

The model originated from Michael E Porters 1980 book Competitive Strategy Techniques for Analyzing Industries and Competitors Since then it has become a frequently used tool for analyzing a companys industry structure and its corporate strategy

In his book Porter identified five competitive forces that shape every single industry and market These forces help us to analyze everything from the intensity of competition to the profitability and attractiveness of an industry

Page | 11

Following figure shows the relationship between the different competitive forces

1) Threat of New Entrants

The easier it is for new companies to enter the industry the more cutthroat competition there will be Factors that can limit the threat of new entrants are known as barriers to entry Some examples include

Existing loyalty to major brands Incentives for using a particular buyer (such as frequent shopper

programs) High fixed costs Scarcity of resources High costs of switching companies Government restrictions or legislation

2) Power of Suppliers

This is how much pressure suppliers can place on a business If one supplier has a large enough impact to affect a companys margins and volumes then it holds substantial power Here are a few reasons that suppliers might have power

There are very few suppliers of a particular product There are no substitutes Switching to another (competitive) product is very costly The product is extremely important to buyers - cant do without it The supplying industry has a higher profitability than the buying industry

Page | 12

3) Power of Buyers

This is how much pressure customers can place on a business If one customer has a large enough impact to affect a companys margins and volumes then the customer hold substantial power Here are a few reasons that customers might have power

Small number of buyers Purchases large volumes Switching to another (competitive) product is simple The product is not extremely important to buyers they can do

without the product for a period of time Customers are price sensitive

4) Availability of Substitutes ndash

What is the likelihood that someone will switch to a competitive product or service If the cost of switching is low then this poses a serious threat Here are a few factors that can affect the threat of substitutes

The main issue is the similarity of substitutes For example if the price of coffee rises substantially a coffee drinker may switch over to a beverage like tea

If substitutes are similar it can be viewed in the same light as a new entrant

5) Competitive Rivalry ndash

This describes the intensity of competition between existing firms in an industry Highly competitive industries generally earn low returns because the cost of competition is high A highly competitive market might result from

Many players of about the same size there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth companies can only

grow by stealing customers away from competitors5) Cross-Sectional Analysis-

A type of analysis an investor analyst or portfolio manager may conduct on a company in relation to that companys industry or industry peers The analysis compares one company against the industry it operates within or directly against certain competitors within the same industry in an attempt to discover the best of the breed

When conducting a cross-sectional analysis the analyst seeks to identify by using comparative metrics the valuation debt-load future outlook andor operational efficiency of the target company This allows the analyst to evaluate the target companys efficiency in these areas and to make the best investment choice among a group of competitors or the industry as a whole

When comparing the target firm to competitors the analyst must be careful to

Page | 13

consider the unique operating characteristics of each company and how that will affect any comparative metrics used

COMPANY ANALYSIS

Before diving into a companys financial statements were going to take a look at some of the qualitative aspects of a company Fundamental analysis seeks to determine the intrinsic value of a companys stock But since qualitative factors by definition represent aspects of a companys 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 weve demonstrated you cant ignore the less tangible characteristics of a company In this section we are going to highlight some of the company-specific qualitative factors that one should be aware of

a) Business Model-

Even before an investor looks at a companys financial statements or does any research one of the most important questions that should be asked is What exactly does the company do This is referred to as a companys business model ndash its how a company makes money You can get a good overview of a companys business model by checking out its website or by reading the document which company submitted to the SEBI

At the very least 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 doesnt understand them This is not to say the technology sector is bad but its not Buffetts area of expertise he doesnt feel comfortable investing in this area Similarly unless you understand a companys business model you dont know what the drivers are for future growth and you leave yourself vulnerable to being blindsided like shareholders of Boston Chicken were

b) Competitive Advantage

Another business consideration for investors is competitive advantage A companys long-term success is driven largely by its ability to maintain a competitive advantage - and keep it Powerful competitive advantages such as Coca Colas brand name and Microsofts 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

c) 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 cant set up a meeting with management if you want to invest a few lakhs or crore of rupee On the other hand if you are a fund manager interested in

Page | 14

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 Dont expect to find anything useful here Lets be honest Were looking for dirt and no company is going to put negative information on its corporate website

d) 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

Fortunately corporate governance policies typically cover a few general areas structure of the board of directors stakeholder rights and financial and information transparency With a little research and the right questions in mind investors can get a good idea about a companys corporate governance

e) Financial and Information Transparency

This aspect of governance relates to the quality and timeliness of a companys financial disclosures and operational happenings Sufficient transparency implies that a companys financial releases are written in a manner that stakeholders can follow what management is doing and therefore have a clear understanding of the companys current financial situation

f) Stakeholder Rights

This aspect of corporate governance examines the extent that a companys policies are benefiting stakeholder interests notably shareholder interests Ultimately as owners of the company shareholders should have some access to the board of directors if they have concerns or want something addressed Therefore companies with good governance give shareholders a certain amount of ownership voting rights to call meetings to discuss pressing issues with the board

g) Financial statement analysis

Balance sheet walk demonstrates financial statement analysis using the relationship of the key financial statements the income statement cash flow and balance sheet

We show the financial statement links Most business people tend to look at each of the financial statements in turn Our contribution is to show that all three key financial statements are linked The income statement shows the potential cash flows The cash flow statement shows the real cash flows The balance sheet shows the cash owing or payable

Page | 15

Income statement

The income statement (or profit and loss) shows revenue cost of sales expenses interest and tax but does not show the cash flow for a business

Balance sheet

The balance sheet shows the assets and liabilities for the business On the balance sheet we can see the cash balance at the start and end of the period However the details of all the cash flows cannot be gleaned from the balance sheet

Cash flow

The cash flow statement shows the cash flows for the business Here we see the operating cash flows financing cash flows and investing cash flows

The income statement cash flow and balance sheet above are not independent of each other Financial statements links demonstrates how they work together This understanding helps with financial statement analysis

Financial Statement Links

Where is the relationship between the key financial statements Take a look at this example

1 The income statement shows revenue of 5000002 The cash flow statement shows the cash received from customers is 3750003 The balance sheet shows under assets the difference ie accounts receivables is

125000 Fundamental analysis is the process of looking at a business at the basic or fundamental financial level This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes The goal is to determine the current worth and more importantly how the market values the stock

Following are the key tools of fundamental analysis and what they tell you Even if you donrsquot plan to do in-depth fundamental analysis yourself it will help you follow stocks more closely if you understand the key ratios and terms

FUNDAMENTAL ANALYSIS TOOLS These are the most popular tools of fundamental analysis They focus on earnings growth and value in the market No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

Earnings

Page | 16

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 6: Fundamental Analysis of securities

FUNDAMENTAL ANALYSIS OF A SECURITY

INTRODUCTION

11 INTRODUCTIONStock market analysis is crucial because it influences the choices investors make sometimes to very high degrees A wide range of stock market analyses is available to investors Not all of them are useful and some can be detrimental or even fatal to investors An awareness of the different types of analyses can help investors stay informed and make their own monetary decisions wisely

Fundamental Analysis

Fundamental analysis is more likely to occur on a company-to-company basis The goal is to determine whether the stock price is a good representation of the actual value of the company This is done based on the financial well-being of the company how it is being managed and how consumers are receiving the companyrsquos products and servicesFundamental analysis asks whether the companys ability and performance are worth the price of the stock If the stock seems overpriced based on the companys business operations its price is likely to fall and vice versa Fundamental analysis assumes that the quality and competence of a business model will be reflected in its stock performance

Technical Analysis

Technical analysis uses a variety of different tools to observe in depth the effects of supply and demand Technical analysis generally discounts the underlying health of the company as it might be reflected in a fundamental analysis instead favoring an examination of the basic trajectory of a companys stockAlthough this approach has its drawbacks it offers a special perspective that might be more relevant to stock investment because stock prices sometimes rise and fall completely independently of the companys operations In general a more detailed and extensive stock history will produce more accurate results through technical analysis

Fundamental analysis is the examination of the underlying forces that affect the well being of the economy industry groups and companies As with most analysis the goal is to derive a forecast and profit from future price movements

At the company level fundamental analysis may involve examination of financial data management business concept and competition At the industry level there might be an examination of supply and demand forces for the products offered For the national economy fundamental analysis might focus on economic data to assess the present and future growth of the economy

Page | 6

To forecast future stock prices fundamental analysis combines economic industry and company analysis to derive a stocks current fair value and forecast future value If fair value is not equal to the current stock price fundamental analysts believe that the stock is either over or under valued and the market price will ultimately gravitate towards fair value Fundamentalists do not heed the advice of the random walkers and believe that markets are weak-form efficient By believing that prices do not accurately reflect all available information fundamental analysts look to capitalize on perceived price discrepancies

Fundamental analysis serves to answer questions such as

Is the companyrsquos 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

This all together boils down to one question that is Is the companyrsquos stock a good investment

OBJECTIVES-

To evaluate the present and future earning capacity of a share based on the Economy Industry and Company fundamentals and thereby assess the intrinsic valueeconomic worth of the share for investment

To understand the performance of companies through its financials and thereby assessing the future prospect of the company

Compare past and current records of the company and judge its performance based on various ratios and findings so as to track the records find out whether the company has meet its expectations regarding sales and profitability

Suggest investors about some of the shares which can be purchased and can earn return over their investments over a certain period of time

Page | 7

SCOPE OF STUDY- a) Long-term Trends

Fundamental analysis is good for long-term investments based on long-term trends very long-term The ability to identify and predict long-term economic demographic technological or consumer trends can benefit patient investors who pick the right industry groups or companies

b) Value Spotting

Sound fundamental analysis will help identify companies that represent a good value Some of the most legendary investors think long-term and value Graham and Dodd Warren Buffett and John Neff are seen as the champions of value investing Fundamental analysis can help uncover companies with valuable assets a strong balance sheet stable earnings and staying power

c) Business Acumen

One of the most obvious but less tangible rewards of fundamental analysis is the development of a thorough understanding of the business After such painstaking research and analysis an investor will be familiar with the key revenue and profit drivers behind a company Earnings and earnings expectations can be potent drivers of equity prices Even some technicians will agree to that A good understanding can help investors avoid companies that are prone to shortfalls and identify those that continue to deliver In addition to understanding the business fundamental analysis allows investors to develop an understanding of the key value drivers and companies within an industry A stocks price is heavily influenced by its industry group By studying these groups investors can better position themselves to identify opportunities that are high-risk (tech) low-risk (utilities) growth oriented (computer) value driven (oil) non-cyclical (consumer staples) cyclical (transportation) or income-oriented (high yield)

d) Knowing Whos Who

Stocks move as a group By understanding a companys business investors can better position themselves to categorize stocks within their relevant industry group Business can change rapidly and with it the revenue mix of a company This happened to many of the pure Internet retailers which were not really Internet companies but plain retailers Knowing a companys business and being able to place it in a group can make a huge difference in relative valuations

FUNDAMENTAL ANALYSISFundamental Analysis involves a three-step examination which calls for

Understanding of the macro- economic environment and developments (Economy Analysis)

Analyzing the prospects of the industry to which the firm belongs (Industry Analysis)

Page | 8

Assessing the projected performance of the company and the intrinsic value of its share (Company Analysis)

ECONOMY ANALYSIS

Economic analysis is a process whereby strengths and weaknesses of an economy are analyzed Economic analysis is important in order to understand exact condition of an economy It can cover a number of important economic issues that keep cropping up within a particular economy which is being analyzed A study of the economic variables would give an idea about future corporate earnings and the payment of dividends and interest to investors

Factors to be consider in Economy Analysis

Economic indicators or business indicators are markers about an economy Future performance predictions and economic performances can be analyzed through these indicators There are economic summaries various indices and earnings reports like housing unemployment bankruptcies Consumer Price Index (a measure for inflation) stock market prices industrial production retail sales and money supply changes in economic indicators

Indicators which change about same time and in same direction with economy are called coincident indicators These provide information regarding present economic state Coincident indicators include retail sales GDP industrial production and personal income A coincident index can be used to identify troughs and peaks in a business cycle

These indicators are studied in a branch of macroeconomics called ldquobusiness cyclesrdquo Economic indicators have three major attributes - relation to business cycle or an economy frequency of data and timing In relation to business cycle or economy indicators have one of three different economic relationships like procyclic counter cyclic and acyclic Procyclic economic indicator moves along same direction as an economy It means that when

Page | 9

economy is well this number increases An example is gross domestic product (GDP) Counter cyclic economic indicator moves in reverse direction of economy Unemployment rate increases as economy gets worse Acyclic economic indicator doesnrsquot have any relation to an economyrsquos health An example would be a sports result which doesnrsquot have any effect on economy

Economy-wide Factors

Growth rates of the economy GDP GNP NNP

Inflation rate Interest rates Government Revenue Expenditure and Deficits Exchange rates Infrastructure Monsoon Economic and political stability

INDUSTRY ANALYSIS-

It refers to an evaluation of the relative strengths and weakness of industries Industry analysis is a type of investment research that begins by focusing on the status of an industry or an industrial sector

This part is divided into the four steps that is

Sensitivity to the Business Cycle

Industry Life Cycle Analysis

Study of the Structure and Characteristics of an Industry

Profit Potential of Industries Porter Model

1) Sensitivity to the Business cycle-

a) The sensitivity of the firmrsquos sales to the business condition- It shows the performance of the business of the firm with respect to the business environment or condition

b) The Operating Leverage

c) The Financial Leverage

2) Industry Life Cycle Analysis-

A form of fundamental analysis involving the process of making investment decisions based on the different stages an industry is at during a given point in time The type of position taken will depend on firm specific characteristics as well as where the industry is at in its life cycle

Page | 10

1) Under the production and market introduction phases revenues and earnings are likely to be very low which makes investments during these phases more speculative in nature Revenues and earnings are likely to be low because there is little demand for the product or the product is not completed Expenses are likely to be very large during these phases as a company or industry spends a lot on marketing and research

2) Through the growth phase revenues and margins are likely to be on the rise due to an increase in demand for a product and the pricing power the firm has due to a small number of competitors Stock prices are likely to rise during this phase

3) During the maturity and stability phase revenues and margins are likely to decline due to lower sales demand and more competition Stock prices are likely to decline during these phases

3) Study of the Structure and Characteristics of An Industries-

The study of structure and characteristics of an industries also an important in the process of industry analysis for the purpose of investment This study will help us in deciding the future of the industry whether it is good or bad With the help of this study we may also know about the future growth on the industry Following are some points which will be consider by the investor for this study

Demand and Supply Gap in Product or services Competitive Conditions in the Industry Permanence Labour Conditions or Labour attitude towards the work in industries Attitude of Government and rules amp regulation of government also the facilities

and subsidies provided by government Supply of Raw Materials Cost Structure

4) Profit Potential of Industries ndash Porter Model-

Each industry is different and using one cookie-cutter approach to analysis is sure to create problems Imagine for example comparing the PE ratio of a tech company to that of a utility Because you are in effect comparing apples to oranges the analysis is next to useless In each section well take an in-depth look at the different valuation techniques and buzz words used in a particular industry complete a 5-forces analysis on the state of the market and point you in the direction of industry-specific resources

The model originated from Michael E Porters 1980 book Competitive Strategy Techniques for Analyzing Industries and Competitors Since then it has become a frequently used tool for analyzing a companys industry structure and its corporate strategy

In his book Porter identified five competitive forces that shape every single industry and market These forces help us to analyze everything from the intensity of competition to the profitability and attractiveness of an industry

Page | 11

Following figure shows the relationship between the different competitive forces

1) Threat of New Entrants

The easier it is for new companies to enter the industry the more cutthroat competition there will be Factors that can limit the threat of new entrants are known as barriers to entry Some examples include

Existing loyalty to major brands Incentives for using a particular buyer (such as frequent shopper

programs) High fixed costs Scarcity of resources High costs of switching companies Government restrictions or legislation

2) Power of Suppliers

This is how much pressure suppliers can place on a business If one supplier has a large enough impact to affect a companys margins and volumes then it holds substantial power Here are a few reasons that suppliers might have power

There are very few suppliers of a particular product There are no substitutes Switching to another (competitive) product is very costly The product is extremely important to buyers - cant do without it The supplying industry has a higher profitability than the buying industry

Page | 12

3) Power of Buyers

This is how much pressure customers can place on a business If one customer has a large enough impact to affect a companys margins and volumes then the customer hold substantial power Here are a few reasons that customers might have power

Small number of buyers Purchases large volumes Switching to another (competitive) product is simple The product is not extremely important to buyers they can do

without the product for a period of time Customers are price sensitive

4) Availability of Substitutes ndash

What is the likelihood that someone will switch to a competitive product or service If the cost of switching is low then this poses a serious threat Here are a few factors that can affect the threat of substitutes

The main issue is the similarity of substitutes For example if the price of coffee rises substantially a coffee drinker may switch over to a beverage like tea

If substitutes are similar it can be viewed in the same light as a new entrant

5) Competitive Rivalry ndash

This describes the intensity of competition between existing firms in an industry Highly competitive industries generally earn low returns because the cost of competition is high A highly competitive market might result from

Many players of about the same size there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth companies can only

grow by stealing customers away from competitors5) Cross-Sectional Analysis-

A type of analysis an investor analyst or portfolio manager may conduct on a company in relation to that companys industry or industry peers The analysis compares one company against the industry it operates within or directly against certain competitors within the same industry in an attempt to discover the best of the breed

When conducting a cross-sectional analysis the analyst seeks to identify by using comparative metrics the valuation debt-load future outlook andor operational efficiency of the target company This allows the analyst to evaluate the target companys efficiency in these areas and to make the best investment choice among a group of competitors or the industry as a whole

When comparing the target firm to competitors the analyst must be careful to

Page | 13

consider the unique operating characteristics of each company and how that will affect any comparative metrics used

COMPANY ANALYSIS

Before diving into a companys financial statements were going to take a look at some of the qualitative aspects of a company Fundamental analysis seeks to determine the intrinsic value of a companys stock But since qualitative factors by definition represent aspects of a companys 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 weve demonstrated you cant ignore the less tangible characteristics of a company In this section we are going to highlight some of the company-specific qualitative factors that one should be aware of

a) Business Model-

Even before an investor looks at a companys financial statements or does any research one of the most important questions that should be asked is What exactly does the company do This is referred to as a companys business model ndash its how a company makes money You can get a good overview of a companys business model by checking out its website or by reading the document which company submitted to the SEBI

At the very least 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 doesnt understand them This is not to say the technology sector is bad but its not Buffetts area of expertise he doesnt feel comfortable investing in this area Similarly unless you understand a companys business model you dont know what the drivers are for future growth and you leave yourself vulnerable to being blindsided like shareholders of Boston Chicken were

b) Competitive Advantage

Another business consideration for investors is competitive advantage A companys long-term success is driven largely by its ability to maintain a competitive advantage - and keep it Powerful competitive advantages such as Coca Colas brand name and Microsofts 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

c) 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 cant set up a meeting with management if you want to invest a few lakhs or crore of rupee On the other hand if you are a fund manager interested in

Page | 14

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 Dont expect to find anything useful here Lets be honest Were looking for dirt and no company is going to put negative information on its corporate website

d) 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

Fortunately corporate governance policies typically cover a few general areas structure of the board of directors stakeholder rights and financial and information transparency With a little research and the right questions in mind investors can get a good idea about a companys corporate governance

e) Financial and Information Transparency

This aspect of governance relates to the quality and timeliness of a companys financial disclosures and operational happenings Sufficient transparency implies that a companys financial releases are written in a manner that stakeholders can follow what management is doing and therefore have a clear understanding of the companys current financial situation

f) Stakeholder Rights

This aspect of corporate governance examines the extent that a companys policies are benefiting stakeholder interests notably shareholder interests Ultimately as owners of the company shareholders should have some access to the board of directors if they have concerns or want something addressed Therefore companies with good governance give shareholders a certain amount of ownership voting rights to call meetings to discuss pressing issues with the board

g) Financial statement analysis

Balance sheet walk demonstrates financial statement analysis using the relationship of the key financial statements the income statement cash flow and balance sheet

We show the financial statement links Most business people tend to look at each of the financial statements in turn Our contribution is to show that all three key financial statements are linked The income statement shows the potential cash flows The cash flow statement shows the real cash flows The balance sheet shows the cash owing or payable

Page | 15

Income statement

The income statement (or profit and loss) shows revenue cost of sales expenses interest and tax but does not show the cash flow for a business

Balance sheet

The balance sheet shows the assets and liabilities for the business On the balance sheet we can see the cash balance at the start and end of the period However the details of all the cash flows cannot be gleaned from the balance sheet

Cash flow

The cash flow statement shows the cash flows for the business Here we see the operating cash flows financing cash flows and investing cash flows

The income statement cash flow and balance sheet above are not independent of each other Financial statements links demonstrates how they work together This understanding helps with financial statement analysis

Financial Statement Links

Where is the relationship between the key financial statements Take a look at this example

1 The income statement shows revenue of 5000002 The cash flow statement shows the cash received from customers is 3750003 The balance sheet shows under assets the difference ie accounts receivables is

125000 Fundamental analysis is the process of looking at a business at the basic or fundamental financial level This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes The goal is to determine the current worth and more importantly how the market values the stock

Following are the key tools of fundamental analysis and what they tell you Even if you donrsquot plan to do in-depth fundamental analysis yourself it will help you follow stocks more closely if you understand the key ratios and terms

FUNDAMENTAL ANALYSIS TOOLS These are the most popular tools of fundamental analysis They focus on earnings growth and value in the market No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

Earnings

Page | 16

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 7: Fundamental Analysis of securities

To forecast future stock prices fundamental analysis combines economic industry and company analysis to derive a stocks current fair value and forecast future value If fair value is not equal to the current stock price fundamental analysts believe that the stock is either over or under valued and the market price will ultimately gravitate towards fair value Fundamentalists do not heed the advice of the random walkers and believe that markets are weak-form efficient By believing that prices do not accurately reflect all available information fundamental analysts look to capitalize on perceived price discrepancies

Fundamental analysis serves to answer questions such as

Is the companyrsquos 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

This all together boils down to one question that is Is the companyrsquos stock a good investment

OBJECTIVES-

To evaluate the present and future earning capacity of a share based on the Economy Industry and Company fundamentals and thereby assess the intrinsic valueeconomic worth of the share for investment

To understand the performance of companies through its financials and thereby assessing the future prospect of the company

Compare past and current records of the company and judge its performance based on various ratios and findings so as to track the records find out whether the company has meet its expectations regarding sales and profitability

Suggest investors about some of the shares which can be purchased and can earn return over their investments over a certain period of time

Page | 7

SCOPE OF STUDY- a) Long-term Trends

Fundamental analysis is good for long-term investments based on long-term trends very long-term The ability to identify and predict long-term economic demographic technological or consumer trends can benefit patient investors who pick the right industry groups or companies

b) Value Spotting

Sound fundamental analysis will help identify companies that represent a good value Some of the most legendary investors think long-term and value Graham and Dodd Warren Buffett and John Neff are seen as the champions of value investing Fundamental analysis can help uncover companies with valuable assets a strong balance sheet stable earnings and staying power

c) Business Acumen

One of the most obvious but less tangible rewards of fundamental analysis is the development of a thorough understanding of the business After such painstaking research and analysis an investor will be familiar with the key revenue and profit drivers behind a company Earnings and earnings expectations can be potent drivers of equity prices Even some technicians will agree to that A good understanding can help investors avoid companies that are prone to shortfalls and identify those that continue to deliver In addition to understanding the business fundamental analysis allows investors to develop an understanding of the key value drivers and companies within an industry A stocks price is heavily influenced by its industry group By studying these groups investors can better position themselves to identify opportunities that are high-risk (tech) low-risk (utilities) growth oriented (computer) value driven (oil) non-cyclical (consumer staples) cyclical (transportation) or income-oriented (high yield)

d) Knowing Whos Who

Stocks move as a group By understanding a companys business investors can better position themselves to categorize stocks within their relevant industry group Business can change rapidly and with it the revenue mix of a company This happened to many of the pure Internet retailers which were not really Internet companies but plain retailers Knowing a companys business and being able to place it in a group can make a huge difference in relative valuations

FUNDAMENTAL ANALYSISFundamental Analysis involves a three-step examination which calls for

Understanding of the macro- economic environment and developments (Economy Analysis)

Analyzing the prospects of the industry to which the firm belongs (Industry Analysis)

Page | 8

Assessing the projected performance of the company and the intrinsic value of its share (Company Analysis)

ECONOMY ANALYSIS

Economic analysis is a process whereby strengths and weaknesses of an economy are analyzed Economic analysis is important in order to understand exact condition of an economy It can cover a number of important economic issues that keep cropping up within a particular economy which is being analyzed A study of the economic variables would give an idea about future corporate earnings and the payment of dividends and interest to investors

Factors to be consider in Economy Analysis

Economic indicators or business indicators are markers about an economy Future performance predictions and economic performances can be analyzed through these indicators There are economic summaries various indices and earnings reports like housing unemployment bankruptcies Consumer Price Index (a measure for inflation) stock market prices industrial production retail sales and money supply changes in economic indicators

Indicators which change about same time and in same direction with economy are called coincident indicators These provide information regarding present economic state Coincident indicators include retail sales GDP industrial production and personal income A coincident index can be used to identify troughs and peaks in a business cycle

These indicators are studied in a branch of macroeconomics called ldquobusiness cyclesrdquo Economic indicators have three major attributes - relation to business cycle or an economy frequency of data and timing In relation to business cycle or economy indicators have one of three different economic relationships like procyclic counter cyclic and acyclic Procyclic economic indicator moves along same direction as an economy It means that when

Page | 9

economy is well this number increases An example is gross domestic product (GDP) Counter cyclic economic indicator moves in reverse direction of economy Unemployment rate increases as economy gets worse Acyclic economic indicator doesnrsquot have any relation to an economyrsquos health An example would be a sports result which doesnrsquot have any effect on economy

Economy-wide Factors

Growth rates of the economy GDP GNP NNP

Inflation rate Interest rates Government Revenue Expenditure and Deficits Exchange rates Infrastructure Monsoon Economic and political stability

INDUSTRY ANALYSIS-

It refers to an evaluation of the relative strengths and weakness of industries Industry analysis is a type of investment research that begins by focusing on the status of an industry or an industrial sector

This part is divided into the four steps that is

Sensitivity to the Business Cycle

Industry Life Cycle Analysis

Study of the Structure and Characteristics of an Industry

Profit Potential of Industries Porter Model

1) Sensitivity to the Business cycle-

a) The sensitivity of the firmrsquos sales to the business condition- It shows the performance of the business of the firm with respect to the business environment or condition

b) The Operating Leverage

c) The Financial Leverage

2) Industry Life Cycle Analysis-

A form of fundamental analysis involving the process of making investment decisions based on the different stages an industry is at during a given point in time The type of position taken will depend on firm specific characteristics as well as where the industry is at in its life cycle

Page | 10

1) Under the production and market introduction phases revenues and earnings are likely to be very low which makes investments during these phases more speculative in nature Revenues and earnings are likely to be low because there is little demand for the product or the product is not completed Expenses are likely to be very large during these phases as a company or industry spends a lot on marketing and research

2) Through the growth phase revenues and margins are likely to be on the rise due to an increase in demand for a product and the pricing power the firm has due to a small number of competitors Stock prices are likely to rise during this phase

3) During the maturity and stability phase revenues and margins are likely to decline due to lower sales demand and more competition Stock prices are likely to decline during these phases

3) Study of the Structure and Characteristics of An Industries-

The study of structure and characteristics of an industries also an important in the process of industry analysis for the purpose of investment This study will help us in deciding the future of the industry whether it is good or bad With the help of this study we may also know about the future growth on the industry Following are some points which will be consider by the investor for this study

Demand and Supply Gap in Product or services Competitive Conditions in the Industry Permanence Labour Conditions or Labour attitude towards the work in industries Attitude of Government and rules amp regulation of government also the facilities

and subsidies provided by government Supply of Raw Materials Cost Structure

4) Profit Potential of Industries ndash Porter Model-

Each industry is different and using one cookie-cutter approach to analysis is sure to create problems Imagine for example comparing the PE ratio of a tech company to that of a utility Because you are in effect comparing apples to oranges the analysis is next to useless In each section well take an in-depth look at the different valuation techniques and buzz words used in a particular industry complete a 5-forces analysis on the state of the market and point you in the direction of industry-specific resources

The model originated from Michael E Porters 1980 book Competitive Strategy Techniques for Analyzing Industries and Competitors Since then it has become a frequently used tool for analyzing a companys industry structure and its corporate strategy

In his book Porter identified five competitive forces that shape every single industry and market These forces help us to analyze everything from the intensity of competition to the profitability and attractiveness of an industry

Page | 11

Following figure shows the relationship between the different competitive forces

1) Threat of New Entrants

The easier it is for new companies to enter the industry the more cutthroat competition there will be Factors that can limit the threat of new entrants are known as barriers to entry Some examples include

Existing loyalty to major brands Incentives for using a particular buyer (such as frequent shopper

programs) High fixed costs Scarcity of resources High costs of switching companies Government restrictions or legislation

2) Power of Suppliers

This is how much pressure suppliers can place on a business If one supplier has a large enough impact to affect a companys margins and volumes then it holds substantial power Here are a few reasons that suppliers might have power

There are very few suppliers of a particular product There are no substitutes Switching to another (competitive) product is very costly The product is extremely important to buyers - cant do without it The supplying industry has a higher profitability than the buying industry

Page | 12

3) Power of Buyers

This is how much pressure customers can place on a business If one customer has a large enough impact to affect a companys margins and volumes then the customer hold substantial power Here are a few reasons that customers might have power

Small number of buyers Purchases large volumes Switching to another (competitive) product is simple The product is not extremely important to buyers they can do

without the product for a period of time Customers are price sensitive

4) Availability of Substitutes ndash

What is the likelihood that someone will switch to a competitive product or service If the cost of switching is low then this poses a serious threat Here are a few factors that can affect the threat of substitutes

The main issue is the similarity of substitutes For example if the price of coffee rises substantially a coffee drinker may switch over to a beverage like tea

If substitutes are similar it can be viewed in the same light as a new entrant

5) Competitive Rivalry ndash

This describes the intensity of competition between existing firms in an industry Highly competitive industries generally earn low returns because the cost of competition is high A highly competitive market might result from

Many players of about the same size there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth companies can only

grow by stealing customers away from competitors5) Cross-Sectional Analysis-

A type of analysis an investor analyst or portfolio manager may conduct on a company in relation to that companys industry or industry peers The analysis compares one company against the industry it operates within or directly against certain competitors within the same industry in an attempt to discover the best of the breed

When conducting a cross-sectional analysis the analyst seeks to identify by using comparative metrics the valuation debt-load future outlook andor operational efficiency of the target company This allows the analyst to evaluate the target companys efficiency in these areas and to make the best investment choice among a group of competitors or the industry as a whole

When comparing the target firm to competitors the analyst must be careful to

Page | 13

consider the unique operating characteristics of each company and how that will affect any comparative metrics used

COMPANY ANALYSIS

Before diving into a companys financial statements were going to take a look at some of the qualitative aspects of a company Fundamental analysis seeks to determine the intrinsic value of a companys stock But since qualitative factors by definition represent aspects of a companys 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 weve demonstrated you cant ignore the less tangible characteristics of a company In this section we are going to highlight some of the company-specific qualitative factors that one should be aware of

a) Business Model-

Even before an investor looks at a companys financial statements or does any research one of the most important questions that should be asked is What exactly does the company do This is referred to as a companys business model ndash its how a company makes money You can get a good overview of a companys business model by checking out its website or by reading the document which company submitted to the SEBI

At the very least 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 doesnt understand them This is not to say the technology sector is bad but its not Buffetts area of expertise he doesnt feel comfortable investing in this area Similarly unless you understand a companys business model you dont know what the drivers are for future growth and you leave yourself vulnerable to being blindsided like shareholders of Boston Chicken were

b) Competitive Advantage

Another business consideration for investors is competitive advantage A companys long-term success is driven largely by its ability to maintain a competitive advantage - and keep it Powerful competitive advantages such as Coca Colas brand name and Microsofts 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

c) 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 cant set up a meeting with management if you want to invest a few lakhs or crore of rupee On the other hand if you are a fund manager interested in

Page | 14

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 Dont expect to find anything useful here Lets be honest Were looking for dirt and no company is going to put negative information on its corporate website

d) 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

Fortunately corporate governance policies typically cover a few general areas structure of the board of directors stakeholder rights and financial and information transparency With a little research and the right questions in mind investors can get a good idea about a companys corporate governance

e) Financial and Information Transparency

This aspect of governance relates to the quality and timeliness of a companys financial disclosures and operational happenings Sufficient transparency implies that a companys financial releases are written in a manner that stakeholders can follow what management is doing and therefore have a clear understanding of the companys current financial situation

f) Stakeholder Rights

This aspect of corporate governance examines the extent that a companys policies are benefiting stakeholder interests notably shareholder interests Ultimately as owners of the company shareholders should have some access to the board of directors if they have concerns or want something addressed Therefore companies with good governance give shareholders a certain amount of ownership voting rights to call meetings to discuss pressing issues with the board

g) Financial statement analysis

Balance sheet walk demonstrates financial statement analysis using the relationship of the key financial statements the income statement cash flow and balance sheet

We show the financial statement links Most business people tend to look at each of the financial statements in turn Our contribution is to show that all three key financial statements are linked The income statement shows the potential cash flows The cash flow statement shows the real cash flows The balance sheet shows the cash owing or payable

Page | 15

Income statement

The income statement (or profit and loss) shows revenue cost of sales expenses interest and tax but does not show the cash flow for a business

Balance sheet

The balance sheet shows the assets and liabilities for the business On the balance sheet we can see the cash balance at the start and end of the period However the details of all the cash flows cannot be gleaned from the balance sheet

Cash flow

The cash flow statement shows the cash flows for the business Here we see the operating cash flows financing cash flows and investing cash flows

The income statement cash flow and balance sheet above are not independent of each other Financial statements links demonstrates how they work together This understanding helps with financial statement analysis

Financial Statement Links

Where is the relationship between the key financial statements Take a look at this example

1 The income statement shows revenue of 5000002 The cash flow statement shows the cash received from customers is 3750003 The balance sheet shows under assets the difference ie accounts receivables is

125000 Fundamental analysis is the process of looking at a business at the basic or fundamental financial level This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes The goal is to determine the current worth and more importantly how the market values the stock

Following are the key tools of fundamental analysis and what they tell you Even if you donrsquot plan to do in-depth fundamental analysis yourself it will help you follow stocks more closely if you understand the key ratios and terms

FUNDAMENTAL ANALYSIS TOOLS These are the most popular tools of fundamental analysis They focus on earnings growth and value in the market No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

Earnings

Page | 16

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 8: Fundamental Analysis of securities

SCOPE OF STUDY- a) Long-term Trends

Fundamental analysis is good for long-term investments based on long-term trends very long-term The ability to identify and predict long-term economic demographic technological or consumer trends can benefit patient investors who pick the right industry groups or companies

b) Value Spotting

Sound fundamental analysis will help identify companies that represent a good value Some of the most legendary investors think long-term and value Graham and Dodd Warren Buffett and John Neff are seen as the champions of value investing Fundamental analysis can help uncover companies with valuable assets a strong balance sheet stable earnings and staying power

c) Business Acumen

One of the most obvious but less tangible rewards of fundamental analysis is the development of a thorough understanding of the business After such painstaking research and analysis an investor will be familiar with the key revenue and profit drivers behind a company Earnings and earnings expectations can be potent drivers of equity prices Even some technicians will agree to that A good understanding can help investors avoid companies that are prone to shortfalls and identify those that continue to deliver In addition to understanding the business fundamental analysis allows investors to develop an understanding of the key value drivers and companies within an industry A stocks price is heavily influenced by its industry group By studying these groups investors can better position themselves to identify opportunities that are high-risk (tech) low-risk (utilities) growth oriented (computer) value driven (oil) non-cyclical (consumer staples) cyclical (transportation) or income-oriented (high yield)

d) Knowing Whos Who

Stocks move as a group By understanding a companys business investors can better position themselves to categorize stocks within their relevant industry group Business can change rapidly and with it the revenue mix of a company This happened to many of the pure Internet retailers which were not really Internet companies but plain retailers Knowing a companys business and being able to place it in a group can make a huge difference in relative valuations

FUNDAMENTAL ANALYSISFundamental Analysis involves a three-step examination which calls for

Understanding of the macro- economic environment and developments (Economy Analysis)

Analyzing the prospects of the industry to which the firm belongs (Industry Analysis)

Page | 8

Assessing the projected performance of the company and the intrinsic value of its share (Company Analysis)

ECONOMY ANALYSIS

Economic analysis is a process whereby strengths and weaknesses of an economy are analyzed Economic analysis is important in order to understand exact condition of an economy It can cover a number of important economic issues that keep cropping up within a particular economy which is being analyzed A study of the economic variables would give an idea about future corporate earnings and the payment of dividends and interest to investors

Factors to be consider in Economy Analysis

Economic indicators or business indicators are markers about an economy Future performance predictions and economic performances can be analyzed through these indicators There are economic summaries various indices and earnings reports like housing unemployment bankruptcies Consumer Price Index (a measure for inflation) stock market prices industrial production retail sales and money supply changes in economic indicators

Indicators which change about same time and in same direction with economy are called coincident indicators These provide information regarding present economic state Coincident indicators include retail sales GDP industrial production and personal income A coincident index can be used to identify troughs and peaks in a business cycle

These indicators are studied in a branch of macroeconomics called ldquobusiness cyclesrdquo Economic indicators have three major attributes - relation to business cycle or an economy frequency of data and timing In relation to business cycle or economy indicators have one of three different economic relationships like procyclic counter cyclic and acyclic Procyclic economic indicator moves along same direction as an economy It means that when

Page | 9

economy is well this number increases An example is gross domestic product (GDP) Counter cyclic economic indicator moves in reverse direction of economy Unemployment rate increases as economy gets worse Acyclic economic indicator doesnrsquot have any relation to an economyrsquos health An example would be a sports result which doesnrsquot have any effect on economy

Economy-wide Factors

Growth rates of the economy GDP GNP NNP

Inflation rate Interest rates Government Revenue Expenditure and Deficits Exchange rates Infrastructure Monsoon Economic and political stability

INDUSTRY ANALYSIS-

It refers to an evaluation of the relative strengths and weakness of industries Industry analysis is a type of investment research that begins by focusing on the status of an industry or an industrial sector

This part is divided into the four steps that is

Sensitivity to the Business Cycle

Industry Life Cycle Analysis

Study of the Structure and Characteristics of an Industry

Profit Potential of Industries Porter Model

1) Sensitivity to the Business cycle-

a) The sensitivity of the firmrsquos sales to the business condition- It shows the performance of the business of the firm with respect to the business environment or condition

b) The Operating Leverage

c) The Financial Leverage

2) Industry Life Cycle Analysis-

A form of fundamental analysis involving the process of making investment decisions based on the different stages an industry is at during a given point in time The type of position taken will depend on firm specific characteristics as well as where the industry is at in its life cycle

Page | 10

1) Under the production and market introduction phases revenues and earnings are likely to be very low which makes investments during these phases more speculative in nature Revenues and earnings are likely to be low because there is little demand for the product or the product is not completed Expenses are likely to be very large during these phases as a company or industry spends a lot on marketing and research

2) Through the growth phase revenues and margins are likely to be on the rise due to an increase in demand for a product and the pricing power the firm has due to a small number of competitors Stock prices are likely to rise during this phase

3) During the maturity and stability phase revenues and margins are likely to decline due to lower sales demand and more competition Stock prices are likely to decline during these phases

3) Study of the Structure and Characteristics of An Industries-

The study of structure and characteristics of an industries also an important in the process of industry analysis for the purpose of investment This study will help us in deciding the future of the industry whether it is good or bad With the help of this study we may also know about the future growth on the industry Following are some points which will be consider by the investor for this study

Demand and Supply Gap in Product or services Competitive Conditions in the Industry Permanence Labour Conditions or Labour attitude towards the work in industries Attitude of Government and rules amp regulation of government also the facilities

and subsidies provided by government Supply of Raw Materials Cost Structure

4) Profit Potential of Industries ndash Porter Model-

Each industry is different and using one cookie-cutter approach to analysis is sure to create problems Imagine for example comparing the PE ratio of a tech company to that of a utility Because you are in effect comparing apples to oranges the analysis is next to useless In each section well take an in-depth look at the different valuation techniques and buzz words used in a particular industry complete a 5-forces analysis on the state of the market and point you in the direction of industry-specific resources

The model originated from Michael E Porters 1980 book Competitive Strategy Techniques for Analyzing Industries and Competitors Since then it has become a frequently used tool for analyzing a companys industry structure and its corporate strategy

In his book Porter identified five competitive forces that shape every single industry and market These forces help us to analyze everything from the intensity of competition to the profitability and attractiveness of an industry

Page | 11

Following figure shows the relationship between the different competitive forces

1) Threat of New Entrants

The easier it is for new companies to enter the industry the more cutthroat competition there will be Factors that can limit the threat of new entrants are known as barriers to entry Some examples include

Existing loyalty to major brands Incentives for using a particular buyer (such as frequent shopper

programs) High fixed costs Scarcity of resources High costs of switching companies Government restrictions or legislation

2) Power of Suppliers

This is how much pressure suppliers can place on a business If one supplier has a large enough impact to affect a companys margins and volumes then it holds substantial power Here are a few reasons that suppliers might have power

There are very few suppliers of a particular product There are no substitutes Switching to another (competitive) product is very costly The product is extremely important to buyers - cant do without it The supplying industry has a higher profitability than the buying industry

Page | 12

3) Power of Buyers

This is how much pressure customers can place on a business If one customer has a large enough impact to affect a companys margins and volumes then the customer hold substantial power Here are a few reasons that customers might have power

Small number of buyers Purchases large volumes Switching to another (competitive) product is simple The product is not extremely important to buyers they can do

without the product for a period of time Customers are price sensitive

4) Availability of Substitutes ndash

What is the likelihood that someone will switch to a competitive product or service If the cost of switching is low then this poses a serious threat Here are a few factors that can affect the threat of substitutes

The main issue is the similarity of substitutes For example if the price of coffee rises substantially a coffee drinker may switch over to a beverage like tea

If substitutes are similar it can be viewed in the same light as a new entrant

5) Competitive Rivalry ndash

This describes the intensity of competition between existing firms in an industry Highly competitive industries generally earn low returns because the cost of competition is high A highly competitive market might result from

Many players of about the same size there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth companies can only

grow by stealing customers away from competitors5) Cross-Sectional Analysis-

A type of analysis an investor analyst or portfolio manager may conduct on a company in relation to that companys industry or industry peers The analysis compares one company against the industry it operates within or directly against certain competitors within the same industry in an attempt to discover the best of the breed

When conducting a cross-sectional analysis the analyst seeks to identify by using comparative metrics the valuation debt-load future outlook andor operational efficiency of the target company This allows the analyst to evaluate the target companys efficiency in these areas and to make the best investment choice among a group of competitors or the industry as a whole

When comparing the target firm to competitors the analyst must be careful to

Page | 13

consider the unique operating characteristics of each company and how that will affect any comparative metrics used

COMPANY ANALYSIS

Before diving into a companys financial statements were going to take a look at some of the qualitative aspects of a company Fundamental analysis seeks to determine the intrinsic value of a companys stock But since qualitative factors by definition represent aspects of a companys 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 weve demonstrated you cant ignore the less tangible characteristics of a company In this section we are going to highlight some of the company-specific qualitative factors that one should be aware of

a) Business Model-

Even before an investor looks at a companys financial statements or does any research one of the most important questions that should be asked is What exactly does the company do This is referred to as a companys business model ndash its how a company makes money You can get a good overview of a companys business model by checking out its website or by reading the document which company submitted to the SEBI

At the very least 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 doesnt understand them This is not to say the technology sector is bad but its not Buffetts area of expertise he doesnt feel comfortable investing in this area Similarly unless you understand a companys business model you dont know what the drivers are for future growth and you leave yourself vulnerable to being blindsided like shareholders of Boston Chicken were

b) Competitive Advantage

Another business consideration for investors is competitive advantage A companys long-term success is driven largely by its ability to maintain a competitive advantage - and keep it Powerful competitive advantages such as Coca Colas brand name and Microsofts 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

c) 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 cant set up a meeting with management if you want to invest a few lakhs or crore of rupee On the other hand if you are a fund manager interested in

Page | 14

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 Dont expect to find anything useful here Lets be honest Were looking for dirt and no company is going to put negative information on its corporate website

d) 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

Fortunately corporate governance policies typically cover a few general areas structure of the board of directors stakeholder rights and financial and information transparency With a little research and the right questions in mind investors can get a good idea about a companys corporate governance

e) Financial and Information Transparency

This aspect of governance relates to the quality and timeliness of a companys financial disclosures and operational happenings Sufficient transparency implies that a companys financial releases are written in a manner that stakeholders can follow what management is doing and therefore have a clear understanding of the companys current financial situation

f) Stakeholder Rights

This aspect of corporate governance examines the extent that a companys policies are benefiting stakeholder interests notably shareholder interests Ultimately as owners of the company shareholders should have some access to the board of directors if they have concerns or want something addressed Therefore companies with good governance give shareholders a certain amount of ownership voting rights to call meetings to discuss pressing issues with the board

g) Financial statement analysis

Balance sheet walk demonstrates financial statement analysis using the relationship of the key financial statements the income statement cash flow and balance sheet

We show the financial statement links Most business people tend to look at each of the financial statements in turn Our contribution is to show that all three key financial statements are linked The income statement shows the potential cash flows The cash flow statement shows the real cash flows The balance sheet shows the cash owing or payable

Page | 15

Income statement

The income statement (or profit and loss) shows revenue cost of sales expenses interest and tax but does not show the cash flow for a business

Balance sheet

The balance sheet shows the assets and liabilities for the business On the balance sheet we can see the cash balance at the start and end of the period However the details of all the cash flows cannot be gleaned from the balance sheet

Cash flow

The cash flow statement shows the cash flows for the business Here we see the operating cash flows financing cash flows and investing cash flows

The income statement cash flow and balance sheet above are not independent of each other Financial statements links demonstrates how they work together This understanding helps with financial statement analysis

Financial Statement Links

Where is the relationship between the key financial statements Take a look at this example

1 The income statement shows revenue of 5000002 The cash flow statement shows the cash received from customers is 3750003 The balance sheet shows under assets the difference ie accounts receivables is

125000 Fundamental analysis is the process of looking at a business at the basic or fundamental financial level This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes The goal is to determine the current worth and more importantly how the market values the stock

Following are the key tools of fundamental analysis and what they tell you Even if you donrsquot plan to do in-depth fundamental analysis yourself it will help you follow stocks more closely if you understand the key ratios and terms

FUNDAMENTAL ANALYSIS TOOLS These are the most popular tools of fundamental analysis They focus on earnings growth and value in the market No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

Earnings

Page | 16

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 9: Fundamental Analysis of securities

Assessing the projected performance of the company and the intrinsic value of its share (Company Analysis)

ECONOMY ANALYSIS

Economic analysis is a process whereby strengths and weaknesses of an economy are analyzed Economic analysis is important in order to understand exact condition of an economy It can cover a number of important economic issues that keep cropping up within a particular economy which is being analyzed A study of the economic variables would give an idea about future corporate earnings and the payment of dividends and interest to investors

Factors to be consider in Economy Analysis

Economic indicators or business indicators are markers about an economy Future performance predictions and economic performances can be analyzed through these indicators There are economic summaries various indices and earnings reports like housing unemployment bankruptcies Consumer Price Index (a measure for inflation) stock market prices industrial production retail sales and money supply changes in economic indicators

Indicators which change about same time and in same direction with economy are called coincident indicators These provide information regarding present economic state Coincident indicators include retail sales GDP industrial production and personal income A coincident index can be used to identify troughs and peaks in a business cycle

These indicators are studied in a branch of macroeconomics called ldquobusiness cyclesrdquo Economic indicators have three major attributes - relation to business cycle or an economy frequency of data and timing In relation to business cycle or economy indicators have one of three different economic relationships like procyclic counter cyclic and acyclic Procyclic economic indicator moves along same direction as an economy It means that when

Page | 9

economy is well this number increases An example is gross domestic product (GDP) Counter cyclic economic indicator moves in reverse direction of economy Unemployment rate increases as economy gets worse Acyclic economic indicator doesnrsquot have any relation to an economyrsquos health An example would be a sports result which doesnrsquot have any effect on economy

Economy-wide Factors

Growth rates of the economy GDP GNP NNP

Inflation rate Interest rates Government Revenue Expenditure and Deficits Exchange rates Infrastructure Monsoon Economic and political stability

INDUSTRY ANALYSIS-

It refers to an evaluation of the relative strengths and weakness of industries Industry analysis is a type of investment research that begins by focusing on the status of an industry or an industrial sector

This part is divided into the four steps that is

Sensitivity to the Business Cycle

Industry Life Cycle Analysis

Study of the Structure and Characteristics of an Industry

Profit Potential of Industries Porter Model

1) Sensitivity to the Business cycle-

a) The sensitivity of the firmrsquos sales to the business condition- It shows the performance of the business of the firm with respect to the business environment or condition

b) The Operating Leverage

c) The Financial Leverage

2) Industry Life Cycle Analysis-

A form of fundamental analysis involving the process of making investment decisions based on the different stages an industry is at during a given point in time The type of position taken will depend on firm specific characteristics as well as where the industry is at in its life cycle

Page | 10

1) Under the production and market introduction phases revenues and earnings are likely to be very low which makes investments during these phases more speculative in nature Revenues and earnings are likely to be low because there is little demand for the product or the product is not completed Expenses are likely to be very large during these phases as a company or industry spends a lot on marketing and research

2) Through the growth phase revenues and margins are likely to be on the rise due to an increase in demand for a product and the pricing power the firm has due to a small number of competitors Stock prices are likely to rise during this phase

3) During the maturity and stability phase revenues and margins are likely to decline due to lower sales demand and more competition Stock prices are likely to decline during these phases

3) Study of the Structure and Characteristics of An Industries-

The study of structure and characteristics of an industries also an important in the process of industry analysis for the purpose of investment This study will help us in deciding the future of the industry whether it is good or bad With the help of this study we may also know about the future growth on the industry Following are some points which will be consider by the investor for this study

Demand and Supply Gap in Product or services Competitive Conditions in the Industry Permanence Labour Conditions or Labour attitude towards the work in industries Attitude of Government and rules amp regulation of government also the facilities

and subsidies provided by government Supply of Raw Materials Cost Structure

4) Profit Potential of Industries ndash Porter Model-

Each industry is different and using one cookie-cutter approach to analysis is sure to create problems Imagine for example comparing the PE ratio of a tech company to that of a utility Because you are in effect comparing apples to oranges the analysis is next to useless In each section well take an in-depth look at the different valuation techniques and buzz words used in a particular industry complete a 5-forces analysis on the state of the market and point you in the direction of industry-specific resources

The model originated from Michael E Porters 1980 book Competitive Strategy Techniques for Analyzing Industries and Competitors Since then it has become a frequently used tool for analyzing a companys industry structure and its corporate strategy

In his book Porter identified five competitive forces that shape every single industry and market These forces help us to analyze everything from the intensity of competition to the profitability and attractiveness of an industry

Page | 11

Following figure shows the relationship between the different competitive forces

1) Threat of New Entrants

The easier it is for new companies to enter the industry the more cutthroat competition there will be Factors that can limit the threat of new entrants are known as barriers to entry Some examples include

Existing loyalty to major brands Incentives for using a particular buyer (such as frequent shopper

programs) High fixed costs Scarcity of resources High costs of switching companies Government restrictions or legislation

2) Power of Suppliers

This is how much pressure suppliers can place on a business If one supplier has a large enough impact to affect a companys margins and volumes then it holds substantial power Here are a few reasons that suppliers might have power

There are very few suppliers of a particular product There are no substitutes Switching to another (competitive) product is very costly The product is extremely important to buyers - cant do without it The supplying industry has a higher profitability than the buying industry

Page | 12

3) Power of Buyers

This is how much pressure customers can place on a business If one customer has a large enough impact to affect a companys margins and volumes then the customer hold substantial power Here are a few reasons that customers might have power

Small number of buyers Purchases large volumes Switching to another (competitive) product is simple The product is not extremely important to buyers they can do

without the product for a period of time Customers are price sensitive

4) Availability of Substitutes ndash

What is the likelihood that someone will switch to a competitive product or service If the cost of switching is low then this poses a serious threat Here are a few factors that can affect the threat of substitutes

The main issue is the similarity of substitutes For example if the price of coffee rises substantially a coffee drinker may switch over to a beverage like tea

If substitutes are similar it can be viewed in the same light as a new entrant

5) Competitive Rivalry ndash

This describes the intensity of competition between existing firms in an industry Highly competitive industries generally earn low returns because the cost of competition is high A highly competitive market might result from

Many players of about the same size there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth companies can only

grow by stealing customers away from competitors5) Cross-Sectional Analysis-

A type of analysis an investor analyst or portfolio manager may conduct on a company in relation to that companys industry or industry peers The analysis compares one company against the industry it operates within or directly against certain competitors within the same industry in an attempt to discover the best of the breed

When conducting a cross-sectional analysis the analyst seeks to identify by using comparative metrics the valuation debt-load future outlook andor operational efficiency of the target company This allows the analyst to evaluate the target companys efficiency in these areas and to make the best investment choice among a group of competitors or the industry as a whole

When comparing the target firm to competitors the analyst must be careful to

Page | 13

consider the unique operating characteristics of each company and how that will affect any comparative metrics used

COMPANY ANALYSIS

Before diving into a companys financial statements were going to take a look at some of the qualitative aspects of a company Fundamental analysis seeks to determine the intrinsic value of a companys stock But since qualitative factors by definition represent aspects of a companys 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 weve demonstrated you cant ignore the less tangible characteristics of a company In this section we are going to highlight some of the company-specific qualitative factors that one should be aware of

a) Business Model-

Even before an investor looks at a companys financial statements or does any research one of the most important questions that should be asked is What exactly does the company do This is referred to as a companys business model ndash its how a company makes money You can get a good overview of a companys business model by checking out its website or by reading the document which company submitted to the SEBI

At the very least 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 doesnt understand them This is not to say the technology sector is bad but its not Buffetts area of expertise he doesnt feel comfortable investing in this area Similarly unless you understand a companys business model you dont know what the drivers are for future growth and you leave yourself vulnerable to being blindsided like shareholders of Boston Chicken were

b) Competitive Advantage

Another business consideration for investors is competitive advantage A companys long-term success is driven largely by its ability to maintain a competitive advantage - and keep it Powerful competitive advantages such as Coca Colas brand name and Microsofts 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

c) 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 cant set up a meeting with management if you want to invest a few lakhs or crore of rupee On the other hand if you are a fund manager interested in

Page | 14

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 Dont expect to find anything useful here Lets be honest Were looking for dirt and no company is going to put negative information on its corporate website

d) 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

Fortunately corporate governance policies typically cover a few general areas structure of the board of directors stakeholder rights and financial and information transparency With a little research and the right questions in mind investors can get a good idea about a companys corporate governance

e) Financial and Information Transparency

This aspect of governance relates to the quality and timeliness of a companys financial disclosures and operational happenings Sufficient transparency implies that a companys financial releases are written in a manner that stakeholders can follow what management is doing and therefore have a clear understanding of the companys current financial situation

f) Stakeholder Rights

This aspect of corporate governance examines the extent that a companys policies are benefiting stakeholder interests notably shareholder interests Ultimately as owners of the company shareholders should have some access to the board of directors if they have concerns or want something addressed Therefore companies with good governance give shareholders a certain amount of ownership voting rights to call meetings to discuss pressing issues with the board

g) Financial statement analysis

Balance sheet walk demonstrates financial statement analysis using the relationship of the key financial statements the income statement cash flow and balance sheet

We show the financial statement links Most business people tend to look at each of the financial statements in turn Our contribution is to show that all three key financial statements are linked The income statement shows the potential cash flows The cash flow statement shows the real cash flows The balance sheet shows the cash owing or payable

Page | 15

Income statement

The income statement (or profit and loss) shows revenue cost of sales expenses interest and tax but does not show the cash flow for a business

Balance sheet

The balance sheet shows the assets and liabilities for the business On the balance sheet we can see the cash balance at the start and end of the period However the details of all the cash flows cannot be gleaned from the balance sheet

Cash flow

The cash flow statement shows the cash flows for the business Here we see the operating cash flows financing cash flows and investing cash flows

The income statement cash flow and balance sheet above are not independent of each other Financial statements links demonstrates how they work together This understanding helps with financial statement analysis

Financial Statement Links

Where is the relationship between the key financial statements Take a look at this example

1 The income statement shows revenue of 5000002 The cash flow statement shows the cash received from customers is 3750003 The balance sheet shows under assets the difference ie accounts receivables is

125000 Fundamental analysis is the process of looking at a business at the basic or fundamental financial level This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes The goal is to determine the current worth and more importantly how the market values the stock

Following are the key tools of fundamental analysis and what they tell you Even if you donrsquot plan to do in-depth fundamental analysis yourself it will help you follow stocks more closely if you understand the key ratios and terms

FUNDAMENTAL ANALYSIS TOOLS These are the most popular tools of fundamental analysis They focus on earnings growth and value in the market No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

Earnings

Page | 16

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 10: Fundamental Analysis of securities

economy is well this number increases An example is gross domestic product (GDP) Counter cyclic economic indicator moves in reverse direction of economy Unemployment rate increases as economy gets worse Acyclic economic indicator doesnrsquot have any relation to an economyrsquos health An example would be a sports result which doesnrsquot have any effect on economy

Economy-wide Factors

Growth rates of the economy GDP GNP NNP

Inflation rate Interest rates Government Revenue Expenditure and Deficits Exchange rates Infrastructure Monsoon Economic and political stability

INDUSTRY ANALYSIS-

It refers to an evaluation of the relative strengths and weakness of industries Industry analysis is a type of investment research that begins by focusing on the status of an industry or an industrial sector

This part is divided into the four steps that is

Sensitivity to the Business Cycle

Industry Life Cycle Analysis

Study of the Structure and Characteristics of an Industry

Profit Potential of Industries Porter Model

1) Sensitivity to the Business cycle-

a) The sensitivity of the firmrsquos sales to the business condition- It shows the performance of the business of the firm with respect to the business environment or condition

b) The Operating Leverage

c) The Financial Leverage

2) Industry Life Cycle Analysis-

A form of fundamental analysis involving the process of making investment decisions based on the different stages an industry is at during a given point in time The type of position taken will depend on firm specific characteristics as well as where the industry is at in its life cycle

Page | 10

1) Under the production and market introduction phases revenues and earnings are likely to be very low which makes investments during these phases more speculative in nature Revenues and earnings are likely to be low because there is little demand for the product or the product is not completed Expenses are likely to be very large during these phases as a company or industry spends a lot on marketing and research

2) Through the growth phase revenues and margins are likely to be on the rise due to an increase in demand for a product and the pricing power the firm has due to a small number of competitors Stock prices are likely to rise during this phase

3) During the maturity and stability phase revenues and margins are likely to decline due to lower sales demand and more competition Stock prices are likely to decline during these phases

3) Study of the Structure and Characteristics of An Industries-

The study of structure and characteristics of an industries also an important in the process of industry analysis for the purpose of investment This study will help us in deciding the future of the industry whether it is good or bad With the help of this study we may also know about the future growth on the industry Following are some points which will be consider by the investor for this study

Demand and Supply Gap in Product or services Competitive Conditions in the Industry Permanence Labour Conditions or Labour attitude towards the work in industries Attitude of Government and rules amp regulation of government also the facilities

and subsidies provided by government Supply of Raw Materials Cost Structure

4) Profit Potential of Industries ndash Porter Model-

Each industry is different and using one cookie-cutter approach to analysis is sure to create problems Imagine for example comparing the PE ratio of a tech company to that of a utility Because you are in effect comparing apples to oranges the analysis is next to useless In each section well take an in-depth look at the different valuation techniques and buzz words used in a particular industry complete a 5-forces analysis on the state of the market and point you in the direction of industry-specific resources

The model originated from Michael E Porters 1980 book Competitive Strategy Techniques for Analyzing Industries and Competitors Since then it has become a frequently used tool for analyzing a companys industry structure and its corporate strategy

In his book Porter identified five competitive forces that shape every single industry and market These forces help us to analyze everything from the intensity of competition to the profitability and attractiveness of an industry

Page | 11

Following figure shows the relationship between the different competitive forces

1) Threat of New Entrants

The easier it is for new companies to enter the industry the more cutthroat competition there will be Factors that can limit the threat of new entrants are known as barriers to entry Some examples include

Existing loyalty to major brands Incentives for using a particular buyer (such as frequent shopper

programs) High fixed costs Scarcity of resources High costs of switching companies Government restrictions or legislation

2) Power of Suppliers

This is how much pressure suppliers can place on a business If one supplier has a large enough impact to affect a companys margins and volumes then it holds substantial power Here are a few reasons that suppliers might have power

There are very few suppliers of a particular product There are no substitutes Switching to another (competitive) product is very costly The product is extremely important to buyers - cant do without it The supplying industry has a higher profitability than the buying industry

Page | 12

3) Power of Buyers

This is how much pressure customers can place on a business If one customer has a large enough impact to affect a companys margins and volumes then the customer hold substantial power Here are a few reasons that customers might have power

Small number of buyers Purchases large volumes Switching to another (competitive) product is simple The product is not extremely important to buyers they can do

without the product for a period of time Customers are price sensitive

4) Availability of Substitutes ndash

What is the likelihood that someone will switch to a competitive product or service If the cost of switching is low then this poses a serious threat Here are a few factors that can affect the threat of substitutes

The main issue is the similarity of substitutes For example if the price of coffee rises substantially a coffee drinker may switch over to a beverage like tea

If substitutes are similar it can be viewed in the same light as a new entrant

5) Competitive Rivalry ndash

This describes the intensity of competition between existing firms in an industry Highly competitive industries generally earn low returns because the cost of competition is high A highly competitive market might result from

Many players of about the same size there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth companies can only

grow by stealing customers away from competitors5) Cross-Sectional Analysis-

A type of analysis an investor analyst or portfolio manager may conduct on a company in relation to that companys industry or industry peers The analysis compares one company against the industry it operates within or directly against certain competitors within the same industry in an attempt to discover the best of the breed

When conducting a cross-sectional analysis the analyst seeks to identify by using comparative metrics the valuation debt-load future outlook andor operational efficiency of the target company This allows the analyst to evaluate the target companys efficiency in these areas and to make the best investment choice among a group of competitors or the industry as a whole

When comparing the target firm to competitors the analyst must be careful to

Page | 13

consider the unique operating characteristics of each company and how that will affect any comparative metrics used

COMPANY ANALYSIS

Before diving into a companys financial statements were going to take a look at some of the qualitative aspects of a company Fundamental analysis seeks to determine the intrinsic value of a companys stock But since qualitative factors by definition represent aspects of a companys 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 weve demonstrated you cant ignore the less tangible characteristics of a company In this section we are going to highlight some of the company-specific qualitative factors that one should be aware of

a) Business Model-

Even before an investor looks at a companys financial statements or does any research one of the most important questions that should be asked is What exactly does the company do This is referred to as a companys business model ndash its how a company makes money You can get a good overview of a companys business model by checking out its website or by reading the document which company submitted to the SEBI

At the very least 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 doesnt understand them This is not to say the technology sector is bad but its not Buffetts area of expertise he doesnt feel comfortable investing in this area Similarly unless you understand a companys business model you dont know what the drivers are for future growth and you leave yourself vulnerable to being blindsided like shareholders of Boston Chicken were

b) Competitive Advantage

Another business consideration for investors is competitive advantage A companys long-term success is driven largely by its ability to maintain a competitive advantage - and keep it Powerful competitive advantages such as Coca Colas brand name and Microsofts 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

c) 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 cant set up a meeting with management if you want to invest a few lakhs or crore of rupee On the other hand if you are a fund manager interested in

Page | 14

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 Dont expect to find anything useful here Lets be honest Were looking for dirt and no company is going to put negative information on its corporate website

d) 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

Fortunately corporate governance policies typically cover a few general areas structure of the board of directors stakeholder rights and financial and information transparency With a little research and the right questions in mind investors can get a good idea about a companys corporate governance

e) Financial and Information Transparency

This aspect of governance relates to the quality and timeliness of a companys financial disclosures and operational happenings Sufficient transparency implies that a companys financial releases are written in a manner that stakeholders can follow what management is doing and therefore have a clear understanding of the companys current financial situation

f) Stakeholder Rights

This aspect of corporate governance examines the extent that a companys policies are benefiting stakeholder interests notably shareholder interests Ultimately as owners of the company shareholders should have some access to the board of directors if they have concerns or want something addressed Therefore companies with good governance give shareholders a certain amount of ownership voting rights to call meetings to discuss pressing issues with the board

g) Financial statement analysis

Balance sheet walk demonstrates financial statement analysis using the relationship of the key financial statements the income statement cash flow and balance sheet

We show the financial statement links Most business people tend to look at each of the financial statements in turn Our contribution is to show that all three key financial statements are linked The income statement shows the potential cash flows The cash flow statement shows the real cash flows The balance sheet shows the cash owing or payable

Page | 15

Income statement

The income statement (or profit and loss) shows revenue cost of sales expenses interest and tax but does not show the cash flow for a business

Balance sheet

The balance sheet shows the assets and liabilities for the business On the balance sheet we can see the cash balance at the start and end of the period However the details of all the cash flows cannot be gleaned from the balance sheet

Cash flow

The cash flow statement shows the cash flows for the business Here we see the operating cash flows financing cash flows and investing cash flows

The income statement cash flow and balance sheet above are not independent of each other Financial statements links demonstrates how they work together This understanding helps with financial statement analysis

Financial Statement Links

Where is the relationship between the key financial statements Take a look at this example

1 The income statement shows revenue of 5000002 The cash flow statement shows the cash received from customers is 3750003 The balance sheet shows under assets the difference ie accounts receivables is

125000 Fundamental analysis is the process of looking at a business at the basic or fundamental financial level This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes The goal is to determine the current worth and more importantly how the market values the stock

Following are the key tools of fundamental analysis and what they tell you Even if you donrsquot plan to do in-depth fundamental analysis yourself it will help you follow stocks more closely if you understand the key ratios and terms

FUNDAMENTAL ANALYSIS TOOLS These are the most popular tools of fundamental analysis They focus on earnings growth and value in the market No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

Earnings

Page | 16

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 11: Fundamental Analysis of securities

1) Under the production and market introduction phases revenues and earnings are likely to be very low which makes investments during these phases more speculative in nature Revenues and earnings are likely to be low because there is little demand for the product or the product is not completed Expenses are likely to be very large during these phases as a company or industry spends a lot on marketing and research

2) Through the growth phase revenues and margins are likely to be on the rise due to an increase in demand for a product and the pricing power the firm has due to a small number of competitors Stock prices are likely to rise during this phase

3) During the maturity and stability phase revenues and margins are likely to decline due to lower sales demand and more competition Stock prices are likely to decline during these phases

3) Study of the Structure and Characteristics of An Industries-

The study of structure and characteristics of an industries also an important in the process of industry analysis for the purpose of investment This study will help us in deciding the future of the industry whether it is good or bad With the help of this study we may also know about the future growth on the industry Following are some points which will be consider by the investor for this study

Demand and Supply Gap in Product or services Competitive Conditions in the Industry Permanence Labour Conditions or Labour attitude towards the work in industries Attitude of Government and rules amp regulation of government also the facilities

and subsidies provided by government Supply of Raw Materials Cost Structure

4) Profit Potential of Industries ndash Porter Model-

Each industry is different and using one cookie-cutter approach to analysis is sure to create problems Imagine for example comparing the PE ratio of a tech company to that of a utility Because you are in effect comparing apples to oranges the analysis is next to useless In each section well take an in-depth look at the different valuation techniques and buzz words used in a particular industry complete a 5-forces analysis on the state of the market and point you in the direction of industry-specific resources

The model originated from Michael E Porters 1980 book Competitive Strategy Techniques for Analyzing Industries and Competitors Since then it has become a frequently used tool for analyzing a companys industry structure and its corporate strategy

In his book Porter identified five competitive forces that shape every single industry and market These forces help us to analyze everything from the intensity of competition to the profitability and attractiveness of an industry

Page | 11

Following figure shows the relationship between the different competitive forces

1) Threat of New Entrants

The easier it is for new companies to enter the industry the more cutthroat competition there will be Factors that can limit the threat of new entrants are known as barriers to entry Some examples include

Existing loyalty to major brands Incentives for using a particular buyer (such as frequent shopper

programs) High fixed costs Scarcity of resources High costs of switching companies Government restrictions or legislation

2) Power of Suppliers

This is how much pressure suppliers can place on a business If one supplier has a large enough impact to affect a companys margins and volumes then it holds substantial power Here are a few reasons that suppliers might have power

There are very few suppliers of a particular product There are no substitutes Switching to another (competitive) product is very costly The product is extremely important to buyers - cant do without it The supplying industry has a higher profitability than the buying industry

Page | 12

3) Power of Buyers

This is how much pressure customers can place on a business If one customer has a large enough impact to affect a companys margins and volumes then the customer hold substantial power Here are a few reasons that customers might have power

Small number of buyers Purchases large volumes Switching to another (competitive) product is simple The product is not extremely important to buyers they can do

without the product for a period of time Customers are price sensitive

4) Availability of Substitutes ndash

What is the likelihood that someone will switch to a competitive product or service If the cost of switching is low then this poses a serious threat Here are a few factors that can affect the threat of substitutes

The main issue is the similarity of substitutes For example if the price of coffee rises substantially a coffee drinker may switch over to a beverage like tea

If substitutes are similar it can be viewed in the same light as a new entrant

5) Competitive Rivalry ndash

This describes the intensity of competition between existing firms in an industry Highly competitive industries generally earn low returns because the cost of competition is high A highly competitive market might result from

Many players of about the same size there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth companies can only

grow by stealing customers away from competitors5) Cross-Sectional Analysis-

A type of analysis an investor analyst or portfolio manager may conduct on a company in relation to that companys industry or industry peers The analysis compares one company against the industry it operates within or directly against certain competitors within the same industry in an attempt to discover the best of the breed

When conducting a cross-sectional analysis the analyst seeks to identify by using comparative metrics the valuation debt-load future outlook andor operational efficiency of the target company This allows the analyst to evaluate the target companys efficiency in these areas and to make the best investment choice among a group of competitors or the industry as a whole

When comparing the target firm to competitors the analyst must be careful to

Page | 13

consider the unique operating characteristics of each company and how that will affect any comparative metrics used

COMPANY ANALYSIS

Before diving into a companys financial statements were going to take a look at some of the qualitative aspects of a company Fundamental analysis seeks to determine the intrinsic value of a companys stock But since qualitative factors by definition represent aspects of a companys 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 weve demonstrated you cant ignore the less tangible characteristics of a company In this section we are going to highlight some of the company-specific qualitative factors that one should be aware of

a) Business Model-

Even before an investor looks at a companys financial statements or does any research one of the most important questions that should be asked is What exactly does the company do This is referred to as a companys business model ndash its how a company makes money You can get a good overview of a companys business model by checking out its website or by reading the document which company submitted to the SEBI

At the very least 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 doesnt understand them This is not to say the technology sector is bad but its not Buffetts area of expertise he doesnt feel comfortable investing in this area Similarly unless you understand a companys business model you dont know what the drivers are for future growth and you leave yourself vulnerable to being blindsided like shareholders of Boston Chicken were

b) Competitive Advantage

Another business consideration for investors is competitive advantage A companys long-term success is driven largely by its ability to maintain a competitive advantage - and keep it Powerful competitive advantages such as Coca Colas brand name and Microsofts 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

c) 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 cant set up a meeting with management if you want to invest a few lakhs or crore of rupee On the other hand if you are a fund manager interested in

Page | 14

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 Dont expect to find anything useful here Lets be honest Were looking for dirt and no company is going to put negative information on its corporate website

d) 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

Fortunately corporate governance policies typically cover a few general areas structure of the board of directors stakeholder rights and financial and information transparency With a little research and the right questions in mind investors can get a good idea about a companys corporate governance

e) Financial and Information Transparency

This aspect of governance relates to the quality and timeliness of a companys financial disclosures and operational happenings Sufficient transparency implies that a companys financial releases are written in a manner that stakeholders can follow what management is doing and therefore have a clear understanding of the companys current financial situation

f) Stakeholder Rights

This aspect of corporate governance examines the extent that a companys policies are benefiting stakeholder interests notably shareholder interests Ultimately as owners of the company shareholders should have some access to the board of directors if they have concerns or want something addressed Therefore companies with good governance give shareholders a certain amount of ownership voting rights to call meetings to discuss pressing issues with the board

g) Financial statement analysis

Balance sheet walk demonstrates financial statement analysis using the relationship of the key financial statements the income statement cash flow and balance sheet

We show the financial statement links Most business people tend to look at each of the financial statements in turn Our contribution is to show that all three key financial statements are linked The income statement shows the potential cash flows The cash flow statement shows the real cash flows The balance sheet shows the cash owing or payable

Page | 15

Income statement

The income statement (or profit and loss) shows revenue cost of sales expenses interest and tax but does not show the cash flow for a business

Balance sheet

The balance sheet shows the assets and liabilities for the business On the balance sheet we can see the cash balance at the start and end of the period However the details of all the cash flows cannot be gleaned from the balance sheet

Cash flow

The cash flow statement shows the cash flows for the business Here we see the operating cash flows financing cash flows and investing cash flows

The income statement cash flow and balance sheet above are not independent of each other Financial statements links demonstrates how they work together This understanding helps with financial statement analysis

Financial Statement Links

Where is the relationship between the key financial statements Take a look at this example

1 The income statement shows revenue of 5000002 The cash flow statement shows the cash received from customers is 3750003 The balance sheet shows under assets the difference ie accounts receivables is

125000 Fundamental analysis is the process of looking at a business at the basic or fundamental financial level This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes The goal is to determine the current worth and more importantly how the market values the stock

Following are the key tools of fundamental analysis and what they tell you Even if you donrsquot plan to do in-depth fundamental analysis yourself it will help you follow stocks more closely if you understand the key ratios and terms

FUNDAMENTAL ANALYSIS TOOLS These are the most popular tools of fundamental analysis They focus on earnings growth and value in the market No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

Earnings

Page | 16

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 12: Fundamental Analysis of securities

Following figure shows the relationship between the different competitive forces

1) Threat of New Entrants

The easier it is for new companies to enter the industry the more cutthroat competition there will be Factors that can limit the threat of new entrants are known as barriers to entry Some examples include

Existing loyalty to major brands Incentives for using a particular buyer (such as frequent shopper

programs) High fixed costs Scarcity of resources High costs of switching companies Government restrictions or legislation

2) Power of Suppliers

This is how much pressure suppliers can place on a business If one supplier has a large enough impact to affect a companys margins and volumes then it holds substantial power Here are a few reasons that suppliers might have power

There are very few suppliers of a particular product There are no substitutes Switching to another (competitive) product is very costly The product is extremely important to buyers - cant do without it The supplying industry has a higher profitability than the buying industry

Page | 12

3) Power of Buyers

This is how much pressure customers can place on a business If one customer has a large enough impact to affect a companys margins and volumes then the customer hold substantial power Here are a few reasons that customers might have power

Small number of buyers Purchases large volumes Switching to another (competitive) product is simple The product is not extremely important to buyers they can do

without the product for a period of time Customers are price sensitive

4) Availability of Substitutes ndash

What is the likelihood that someone will switch to a competitive product or service If the cost of switching is low then this poses a serious threat Here are a few factors that can affect the threat of substitutes

The main issue is the similarity of substitutes For example if the price of coffee rises substantially a coffee drinker may switch over to a beverage like tea

If substitutes are similar it can be viewed in the same light as a new entrant

5) Competitive Rivalry ndash

This describes the intensity of competition between existing firms in an industry Highly competitive industries generally earn low returns because the cost of competition is high A highly competitive market might result from

Many players of about the same size there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth companies can only

grow by stealing customers away from competitors5) Cross-Sectional Analysis-

A type of analysis an investor analyst or portfolio manager may conduct on a company in relation to that companys industry or industry peers The analysis compares one company against the industry it operates within or directly against certain competitors within the same industry in an attempt to discover the best of the breed

When conducting a cross-sectional analysis the analyst seeks to identify by using comparative metrics the valuation debt-load future outlook andor operational efficiency of the target company This allows the analyst to evaluate the target companys efficiency in these areas and to make the best investment choice among a group of competitors or the industry as a whole

When comparing the target firm to competitors the analyst must be careful to

Page | 13

consider the unique operating characteristics of each company and how that will affect any comparative metrics used

COMPANY ANALYSIS

Before diving into a companys financial statements were going to take a look at some of the qualitative aspects of a company Fundamental analysis seeks to determine the intrinsic value of a companys stock But since qualitative factors by definition represent aspects of a companys 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 weve demonstrated you cant ignore the less tangible characteristics of a company In this section we are going to highlight some of the company-specific qualitative factors that one should be aware of

a) Business Model-

Even before an investor looks at a companys financial statements or does any research one of the most important questions that should be asked is What exactly does the company do This is referred to as a companys business model ndash its how a company makes money You can get a good overview of a companys business model by checking out its website or by reading the document which company submitted to the SEBI

At the very least 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 doesnt understand them This is not to say the technology sector is bad but its not Buffetts area of expertise he doesnt feel comfortable investing in this area Similarly unless you understand a companys business model you dont know what the drivers are for future growth and you leave yourself vulnerable to being blindsided like shareholders of Boston Chicken were

b) Competitive Advantage

Another business consideration for investors is competitive advantage A companys long-term success is driven largely by its ability to maintain a competitive advantage - and keep it Powerful competitive advantages such as Coca Colas brand name and Microsofts 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

c) 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 cant set up a meeting with management if you want to invest a few lakhs or crore of rupee On the other hand if you are a fund manager interested in

Page | 14

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 Dont expect to find anything useful here Lets be honest Were looking for dirt and no company is going to put negative information on its corporate website

d) 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

Fortunately corporate governance policies typically cover a few general areas structure of the board of directors stakeholder rights and financial and information transparency With a little research and the right questions in mind investors can get a good idea about a companys corporate governance

e) Financial and Information Transparency

This aspect of governance relates to the quality and timeliness of a companys financial disclosures and operational happenings Sufficient transparency implies that a companys financial releases are written in a manner that stakeholders can follow what management is doing and therefore have a clear understanding of the companys current financial situation

f) Stakeholder Rights

This aspect of corporate governance examines the extent that a companys policies are benefiting stakeholder interests notably shareholder interests Ultimately as owners of the company shareholders should have some access to the board of directors if they have concerns or want something addressed Therefore companies with good governance give shareholders a certain amount of ownership voting rights to call meetings to discuss pressing issues with the board

g) Financial statement analysis

Balance sheet walk demonstrates financial statement analysis using the relationship of the key financial statements the income statement cash flow and balance sheet

We show the financial statement links Most business people tend to look at each of the financial statements in turn Our contribution is to show that all three key financial statements are linked The income statement shows the potential cash flows The cash flow statement shows the real cash flows The balance sheet shows the cash owing or payable

Page | 15

Income statement

The income statement (or profit and loss) shows revenue cost of sales expenses interest and tax but does not show the cash flow for a business

Balance sheet

The balance sheet shows the assets and liabilities for the business On the balance sheet we can see the cash balance at the start and end of the period However the details of all the cash flows cannot be gleaned from the balance sheet

Cash flow

The cash flow statement shows the cash flows for the business Here we see the operating cash flows financing cash flows and investing cash flows

The income statement cash flow and balance sheet above are not independent of each other Financial statements links demonstrates how they work together This understanding helps with financial statement analysis

Financial Statement Links

Where is the relationship between the key financial statements Take a look at this example

1 The income statement shows revenue of 5000002 The cash flow statement shows the cash received from customers is 3750003 The balance sheet shows under assets the difference ie accounts receivables is

125000 Fundamental analysis is the process of looking at a business at the basic or fundamental financial level This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes The goal is to determine the current worth and more importantly how the market values the stock

Following are the key tools of fundamental analysis and what they tell you Even if you donrsquot plan to do in-depth fundamental analysis yourself it will help you follow stocks more closely if you understand the key ratios and terms

FUNDAMENTAL ANALYSIS TOOLS These are the most popular tools of fundamental analysis They focus on earnings growth and value in the market No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

Earnings

Page | 16

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 13: Fundamental Analysis of securities

3) Power of Buyers

This is how much pressure customers can place on a business If one customer has a large enough impact to affect a companys margins and volumes then the customer hold substantial power Here are a few reasons that customers might have power

Small number of buyers Purchases large volumes Switching to another (competitive) product is simple The product is not extremely important to buyers they can do

without the product for a period of time Customers are price sensitive

4) Availability of Substitutes ndash

What is the likelihood that someone will switch to a competitive product or service If the cost of switching is low then this poses a serious threat Here are a few factors that can affect the threat of substitutes

The main issue is the similarity of substitutes For example if the price of coffee rises substantially a coffee drinker may switch over to a beverage like tea

If substitutes are similar it can be viewed in the same light as a new entrant

5) Competitive Rivalry ndash

This describes the intensity of competition between existing firms in an industry Highly competitive industries generally earn low returns because the cost of competition is high A highly competitive market might result from

Many players of about the same size there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth companies can only

grow by stealing customers away from competitors5) Cross-Sectional Analysis-

A type of analysis an investor analyst or portfolio manager may conduct on a company in relation to that companys industry or industry peers The analysis compares one company against the industry it operates within or directly against certain competitors within the same industry in an attempt to discover the best of the breed

When conducting a cross-sectional analysis the analyst seeks to identify by using comparative metrics the valuation debt-load future outlook andor operational efficiency of the target company This allows the analyst to evaluate the target companys efficiency in these areas and to make the best investment choice among a group of competitors or the industry as a whole

When comparing the target firm to competitors the analyst must be careful to

Page | 13

consider the unique operating characteristics of each company and how that will affect any comparative metrics used

COMPANY ANALYSIS

Before diving into a companys financial statements were going to take a look at some of the qualitative aspects of a company Fundamental analysis seeks to determine the intrinsic value of a companys stock But since qualitative factors by definition represent aspects of a companys 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 weve demonstrated you cant ignore the less tangible characteristics of a company In this section we are going to highlight some of the company-specific qualitative factors that one should be aware of

a) Business Model-

Even before an investor looks at a companys financial statements or does any research one of the most important questions that should be asked is What exactly does the company do This is referred to as a companys business model ndash its how a company makes money You can get a good overview of a companys business model by checking out its website or by reading the document which company submitted to the SEBI

At the very least 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 doesnt understand them This is not to say the technology sector is bad but its not Buffetts area of expertise he doesnt feel comfortable investing in this area Similarly unless you understand a companys business model you dont know what the drivers are for future growth and you leave yourself vulnerable to being blindsided like shareholders of Boston Chicken were

b) Competitive Advantage

Another business consideration for investors is competitive advantage A companys long-term success is driven largely by its ability to maintain a competitive advantage - and keep it Powerful competitive advantages such as Coca Colas brand name and Microsofts 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

c) 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 cant set up a meeting with management if you want to invest a few lakhs or crore of rupee On the other hand if you are a fund manager interested in

Page | 14

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 Dont expect to find anything useful here Lets be honest Were looking for dirt and no company is going to put negative information on its corporate website

d) 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

Fortunately corporate governance policies typically cover a few general areas structure of the board of directors stakeholder rights and financial and information transparency With a little research and the right questions in mind investors can get a good idea about a companys corporate governance

e) Financial and Information Transparency

This aspect of governance relates to the quality and timeliness of a companys financial disclosures and operational happenings Sufficient transparency implies that a companys financial releases are written in a manner that stakeholders can follow what management is doing and therefore have a clear understanding of the companys current financial situation

f) Stakeholder Rights

This aspect of corporate governance examines the extent that a companys policies are benefiting stakeholder interests notably shareholder interests Ultimately as owners of the company shareholders should have some access to the board of directors if they have concerns or want something addressed Therefore companies with good governance give shareholders a certain amount of ownership voting rights to call meetings to discuss pressing issues with the board

g) Financial statement analysis

Balance sheet walk demonstrates financial statement analysis using the relationship of the key financial statements the income statement cash flow and balance sheet

We show the financial statement links Most business people tend to look at each of the financial statements in turn Our contribution is to show that all three key financial statements are linked The income statement shows the potential cash flows The cash flow statement shows the real cash flows The balance sheet shows the cash owing or payable

Page | 15

Income statement

The income statement (or profit and loss) shows revenue cost of sales expenses interest and tax but does not show the cash flow for a business

Balance sheet

The balance sheet shows the assets and liabilities for the business On the balance sheet we can see the cash balance at the start and end of the period However the details of all the cash flows cannot be gleaned from the balance sheet

Cash flow

The cash flow statement shows the cash flows for the business Here we see the operating cash flows financing cash flows and investing cash flows

The income statement cash flow and balance sheet above are not independent of each other Financial statements links demonstrates how they work together This understanding helps with financial statement analysis

Financial Statement Links

Where is the relationship between the key financial statements Take a look at this example

1 The income statement shows revenue of 5000002 The cash flow statement shows the cash received from customers is 3750003 The balance sheet shows under assets the difference ie accounts receivables is

125000 Fundamental analysis is the process of looking at a business at the basic or fundamental financial level This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes The goal is to determine the current worth and more importantly how the market values the stock

Following are the key tools of fundamental analysis and what they tell you Even if you donrsquot plan to do in-depth fundamental analysis yourself it will help you follow stocks more closely if you understand the key ratios and terms

FUNDAMENTAL ANALYSIS TOOLS These are the most popular tools of fundamental analysis They focus on earnings growth and value in the market No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

Earnings

Page | 16

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 14: Fundamental Analysis of securities

consider the unique operating characteristics of each company and how that will affect any comparative metrics used

COMPANY ANALYSIS

Before diving into a companys financial statements were going to take a look at some of the qualitative aspects of a company Fundamental analysis seeks to determine the intrinsic value of a companys stock But since qualitative factors by definition represent aspects of a companys 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 weve demonstrated you cant ignore the less tangible characteristics of a company In this section we are going to highlight some of the company-specific qualitative factors that one should be aware of

a) Business Model-

Even before an investor looks at a companys financial statements or does any research one of the most important questions that should be asked is What exactly does the company do This is referred to as a companys business model ndash its how a company makes money You can get a good overview of a companys business model by checking out its website or by reading the document which company submitted to the SEBI

At the very least 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 doesnt understand them This is not to say the technology sector is bad but its not Buffetts area of expertise he doesnt feel comfortable investing in this area Similarly unless you understand a companys business model you dont know what the drivers are for future growth and you leave yourself vulnerable to being blindsided like shareholders of Boston Chicken were

b) Competitive Advantage

Another business consideration for investors is competitive advantage A companys long-term success is driven largely by its ability to maintain a competitive advantage - and keep it Powerful competitive advantages such as Coca Colas brand name and Microsofts 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

c) 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 cant set up a meeting with management if you want to invest a few lakhs or crore of rupee On the other hand if you are a fund manager interested in

Page | 14

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 Dont expect to find anything useful here Lets be honest Were looking for dirt and no company is going to put negative information on its corporate website

d) 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

Fortunately corporate governance policies typically cover a few general areas structure of the board of directors stakeholder rights and financial and information transparency With a little research and the right questions in mind investors can get a good idea about a companys corporate governance

e) Financial and Information Transparency

This aspect of governance relates to the quality and timeliness of a companys financial disclosures and operational happenings Sufficient transparency implies that a companys financial releases are written in a manner that stakeholders can follow what management is doing and therefore have a clear understanding of the companys current financial situation

f) Stakeholder Rights

This aspect of corporate governance examines the extent that a companys policies are benefiting stakeholder interests notably shareholder interests Ultimately as owners of the company shareholders should have some access to the board of directors if they have concerns or want something addressed Therefore companies with good governance give shareholders a certain amount of ownership voting rights to call meetings to discuss pressing issues with the board

g) Financial statement analysis

Balance sheet walk demonstrates financial statement analysis using the relationship of the key financial statements the income statement cash flow and balance sheet

We show the financial statement links Most business people tend to look at each of the financial statements in turn Our contribution is to show that all three key financial statements are linked The income statement shows the potential cash flows The cash flow statement shows the real cash flows The balance sheet shows the cash owing or payable

Page | 15

Income statement

The income statement (or profit and loss) shows revenue cost of sales expenses interest and tax but does not show the cash flow for a business

Balance sheet

The balance sheet shows the assets and liabilities for the business On the balance sheet we can see the cash balance at the start and end of the period However the details of all the cash flows cannot be gleaned from the balance sheet

Cash flow

The cash flow statement shows the cash flows for the business Here we see the operating cash flows financing cash flows and investing cash flows

The income statement cash flow and balance sheet above are not independent of each other Financial statements links demonstrates how they work together This understanding helps with financial statement analysis

Financial Statement Links

Where is the relationship between the key financial statements Take a look at this example

1 The income statement shows revenue of 5000002 The cash flow statement shows the cash received from customers is 3750003 The balance sheet shows under assets the difference ie accounts receivables is

125000 Fundamental analysis is the process of looking at a business at the basic or fundamental financial level This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes The goal is to determine the current worth and more importantly how the market values the stock

Following are the key tools of fundamental analysis and what they tell you Even if you donrsquot plan to do in-depth fundamental analysis yourself it will help you follow stocks more closely if you understand the key ratios and terms

FUNDAMENTAL ANALYSIS TOOLS These are the most popular tools of fundamental analysis They focus on earnings growth and value in the market No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

Earnings

Page | 16

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 15: Fundamental Analysis of securities

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 Dont expect to find anything useful here Lets be honest Were looking for dirt and no company is going to put negative information on its corporate website

d) 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

Fortunately corporate governance policies typically cover a few general areas structure of the board of directors stakeholder rights and financial and information transparency With a little research and the right questions in mind investors can get a good idea about a companys corporate governance

e) Financial and Information Transparency

This aspect of governance relates to the quality and timeliness of a companys financial disclosures and operational happenings Sufficient transparency implies that a companys financial releases are written in a manner that stakeholders can follow what management is doing and therefore have a clear understanding of the companys current financial situation

f) Stakeholder Rights

This aspect of corporate governance examines the extent that a companys policies are benefiting stakeholder interests notably shareholder interests Ultimately as owners of the company shareholders should have some access to the board of directors if they have concerns or want something addressed Therefore companies with good governance give shareholders a certain amount of ownership voting rights to call meetings to discuss pressing issues with the board

g) Financial statement analysis

Balance sheet walk demonstrates financial statement analysis using the relationship of the key financial statements the income statement cash flow and balance sheet

We show the financial statement links Most business people tend to look at each of the financial statements in turn Our contribution is to show that all three key financial statements are linked The income statement shows the potential cash flows The cash flow statement shows the real cash flows The balance sheet shows the cash owing or payable

Page | 15

Income statement

The income statement (or profit and loss) shows revenue cost of sales expenses interest and tax but does not show the cash flow for a business

Balance sheet

The balance sheet shows the assets and liabilities for the business On the balance sheet we can see the cash balance at the start and end of the period However the details of all the cash flows cannot be gleaned from the balance sheet

Cash flow

The cash flow statement shows the cash flows for the business Here we see the operating cash flows financing cash flows and investing cash flows

The income statement cash flow and balance sheet above are not independent of each other Financial statements links demonstrates how they work together This understanding helps with financial statement analysis

Financial Statement Links

Where is the relationship between the key financial statements Take a look at this example

1 The income statement shows revenue of 5000002 The cash flow statement shows the cash received from customers is 3750003 The balance sheet shows under assets the difference ie accounts receivables is

125000 Fundamental analysis is the process of looking at a business at the basic or fundamental financial level This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes The goal is to determine the current worth and more importantly how the market values the stock

Following are the key tools of fundamental analysis and what they tell you Even if you donrsquot plan to do in-depth fundamental analysis yourself it will help you follow stocks more closely if you understand the key ratios and terms

FUNDAMENTAL ANALYSIS TOOLS These are the most popular tools of fundamental analysis They focus on earnings growth and value in the market No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

Earnings

Page | 16

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 16: Fundamental Analysis of securities

Income statement

The income statement (or profit and loss) shows revenue cost of sales expenses interest and tax but does not show the cash flow for a business

Balance sheet

The balance sheet shows the assets and liabilities for the business On the balance sheet we can see the cash balance at the start and end of the period However the details of all the cash flows cannot be gleaned from the balance sheet

Cash flow

The cash flow statement shows the cash flows for the business Here we see the operating cash flows financing cash flows and investing cash flows

The income statement cash flow and balance sheet above are not independent of each other Financial statements links demonstrates how they work together This understanding helps with financial statement analysis

Financial Statement Links

Where is the relationship between the key financial statements Take a look at this example

1 The income statement shows revenue of 5000002 The cash flow statement shows the cash received from customers is 3750003 The balance sheet shows under assets the difference ie accounts receivables is

125000 Fundamental analysis is the process of looking at a business at the basic or fundamental financial level This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes The goal is to determine the current worth and more importantly how the market values the stock

Following are the key tools of fundamental analysis and what they tell you Even if you donrsquot plan to do in-depth fundamental analysis yourself it will help you follow stocks more closely if you understand the key ratios and terms

FUNDAMENTAL ANALYSIS TOOLS These are the most popular tools of fundamental analysis They focus on earnings growth and value in the market No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

Earnings

Page | 16

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 17: Fundamental Analysis of securities

Itrsquos all about earnings When you come to the bottom line thatrsquos what investors want to know How much money is the company making and how much is it going to make in the future Earnings are profits It may be complicated to calculate but thatrsquos what buying a company is about Increasing earnings generally leads to a higher stock price and in some cases a regular dividend When earnings fall short the market may hammer the stock Every quarter companies report earnings Analysts follow major companies closely and if they fall short of projected earnings sound the alarm

While earnings are important by themselves they donrsquot tell you anything about how the market values the stock To begin building a picture of how the stock is valued you need to use some fundamental analysis tools These ratios are easy to calculate but you can find most of them already done on sites like cnnmoneycom or MoneyCentralcom or on the companyrsquos website

Tools For Analysis-

Earnings per Share ndash EPS Price to Earnings Ratio ndash PE Projected Earnings Growth ndash PEG Price to Sales ndash PS Price to Book ndash PB Dividend Payout Ratio Dividend Yield Book Value Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself however as you begin developing a picture of what you want in a stock these numbers will become benchmarks to measure the worth of potential investments

1) Earning Per Share (EPS)-

One of the challenges of evaluating stocks is establishing an ldquoapples to applesrdquo comparison What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision Comparing the price of two stocks is meaningless similarly comparing the earnings of one company to another really doesnrsquot make any sense if you think about it Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares

For example companies A and B both earn Rs1000 but company A has 100 shares outstanding while company B has 500 shares outstanding Which companyrsquos stock do you want to own

It makes more sense to look at earnings per share (EPS) for use as a comparison tool You calculate earnings per share by taking the net earnings and divide by the outstanding shares EPS = Net Earnings Outstanding Shares

Page | 17

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 18: Fundamental Analysis of securities

Using our example above Company A had earnings of Rs1000 and 100 shares outstanding which equals an EPS of Rs10 (1000 100 = 10) Company B had earnings of 1000 and 500 shares outstanding which equals an EPS of Rs 2 (1000 500 = 2)

So you should go buy Company A with an EPS of 10 right May be but not just on the basis of its EPS The EPS is helpful in comparing one company to another assuming they are in the same industry but it doesnrsquot tell you whether itrsquos a good stock to buy or what the market thinks of it For that information we need to look at some ratios

Before we move on you should note that there are three types of EPS numbers

Trailing EPS ndash last yearrsquos numbers and the only actual EPS Current EPS ndash this yearrsquos numbers which are still projections Forward EPS ndash future numbers which are obviously projections

Donrsquot get hung up on the per-share price of a stock when making your evaluation It really doesnrsquot tell you much Focus instead on the market cap to get a picture of the companyrsquos value in the market place

2) Price to Earnings Ratio-

If there is one number that people look at than more any other it is the Price to Earnings Ratio (PE) The PE is one of those numbers that investors throw around with great authority as if it told the whole story Of course it doesnrsquot tell the whole story (if it did we wouldnrsquot need all the other numbers)

The PE looks at the relationship between the stock price and the companyrsquos earnings The PE is the most popular metric of stock analysis although it is far from the only one you should consider You calculate the PE by taking the share price and dividing it by the companyrsquos EPS

PE = Stock Price EPS

For example a company with a share price of Rs40 and an EPS of Rs8 would have a PE of 5 (40 8 = 5)

What does PE tell you The PE gives you an idea of what the market is willing to pay for the companyrsquos earnings The higher the PE the more the market is willing to pay for the companyrsquos earnings Some investors read a high PE as an overpriced stock and that may be the case however it can also indicate the market has high hopes for this stockrsquos future and has bid up the price

Conversely a low PE may indicate a ldquovote of no confidencerdquo by the market or it could mean this is a sleeper that the market has overlooked Known as value stocks many investors made their fortunes spotting these ldquodiamonds in the roughrdquo before the rest of the market discovered their true worth

Page | 18

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 19: Fundamental Analysis of securities

What is the ldquorightrdquo PE There is no correct answer to this question because part of the answer depends on your willingness to pay for earnings The more you are willing to pay which means you believe the company has good long term prospects over and above its current position the higher the ldquorightrdquo PE is for that particular stock in your decision-making process Another investor may not see the same value and think your ldquorightrdquo PE is all wrong

Understanding the PEG-

This number of PEG gave you an idea of what value the market place on a companyrsquos earnings The PE is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS) This tells you whether a stockrsquos price is high or low relative to its earnings

Some investors may consider a company with a high PE overpriced and they may be correct A high PE may be a signal that traders have pushed a stockrsquos price beyond the point where any reasonable near term growth is probable

However a high PE may also be a strong vote of confidence that the company still has strong growth prospects in the future which should mean an even higher stock priceBecause the market is usually more concerned about the future than the present it is always looking for some way to project out

3) Projected Earning Growth (PEG)

Another ratio you can use will help you look at future earnings growth is called the PEG ratio The PEG factors in projected earnings growth rates to the PE for another number to remember

You calculate the PEG by taking the PE and dividing it by the projected growth in earnings

PEG = PE (projected growth in earnings)

For example a stock with a PE of 30 and projected earning growth next year of 15 would have a PEG of 2 (30 15 = 2)

What does the ldquo2rdquo mean Like all ratios it simply shows you a relationship In this case the lower the number the less you pay for each unit of future earnings growth So even a stock with a high PE but high projected earning growth may be a good value

Looking at the opposite situation a low PE stock with low or no projected earnings growth you see that what looks like a value may not work out that way For example a stock with a PE of 8 and flat earnings growth equals a PEG of 8 This could prove to be an expensive investment A few important things to remember about PEG

It is about year-to-year earnings growth It relies on projections which may not always be accurate

Page | 19

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

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Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

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Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 20: Fundamental Analysis of securities

4) Price to Sales Ratio-

You have a number of tools available to you when it comes to evaluating companies with earnings Does that mean companies that donrsquot have any earnings are bad investments Not necessarily but you should approach companies with no history of actually making money with caution

The Internet boom of the late 1990s was a classic example of hundreds of companies coming to the market with no history of earning ndash some of them didnrsquot even have products yet Fortunately thatrsquos behind us However we still have the problem of needing some measure of young companies with no earnings yet worthy of consideration After all Microsoft had no earnings at one point in its corporate life

One ratio you can use is Price to Sales or PS ratio This metric looks at the current stock price relative to the total sales per share You calculate the PS by dividing the market cap of the stock by the total revenues of the company

You can also calculate the PS by dividing the current stock price by the sales per share

PS = Market Cap RevenuesOR

PS = Stock Price Sales Price Per Share

Much like PE the PS number reflects the value placed on sales by the market The lower the PS the better the value at least thatrsquos the conventional wisdom However this is definitely not a number you want to use in isolation When dealing with a young company there are many questions to answer and the PS supplies just one answer

5) Price to Book Ratio

Investors looking for hot stocks arenrsquot the only ones trolling the markets A quiet group of folks called value investors go about their business looking for companies that the market has passed by

Some of these investors become quite wealthy finding sleepers holding on to them for the long term as the companies go about their business without much attention from the market until one day they pop up on the screen and some analyst ldquodiscoversrdquo them and bids up the stock Meanwhile the value investor pockets a hefty profit

Value investors look for some other indicators besides earnings growth and so on One of the metrics they look for is the Price to Book ratio or PB This measurement looks at the value the market places on the book value of the company

You calculate the PB by taking the current price per share and dividing by the book value per share

PB = Share Price Book Value Per Share

Page | 20

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 21: Fundamental Analysis of securities

Like the PE the lower the PB the better the value Value investors would use a low PB is stock screens for instance to identify potential candidates

6) Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers It almost seems like a measurement invented because it looked like it was important but nobody can really agree on why The DPR (it usually doesnrsquot even warrant a capitalized abbreviation) measures what a companyrsquos pays out to investors in the form of dividends

You calculate the DPR by dividing the annual dividends per share by the Earnings Per Share

DPR = Dividends Per Share EPS

For example if a company paid out Rs10 per share in annual dividends and had Rs40 in EPS the DPR would be 25 (10 40 = 25)

The real question is whether 25 is good or bad and that is subject to interpretation Growing companies will typically retain more profits to fund growth and pay lower or no dividends

Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (utilities used to fall into this group although in recent years many of them have been diversifying)

Either way you must view the whole DPR issue in the context of the company and its industry By itself it tells you very little

7) Dividend Yield

Not all of the tools of fundamental analysis work for every investor on every stock If you are looking for high growth technology stocks they are unlikely to turn up in any stock screens you run looking for dividend paying characteristics

However if you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you For dividend investors one of the telling metrics is Dividend Yield This measurement tells you what percentage return a company pays out to shareholders in the form of dividends Older well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent

You calculate the Dividend Yield by taking the annual dividend per share and divide by the stockrsquos price

Dividend Yield = annual dividend per share stocks price per share

For example if a companyrsquos annual dividend is Rs5 and the stock trades at Rs60 the Dividend Yield is 125 (5 60 = 125)

8) Book Value

Page | 21

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 22: Fundamental Analysis of securities

How much is a company worth and is that value reflected in the stock price

There are several ways to define a companyrsquos worth or value One of the ways you define value is market cap or how much money would you need to buy every single share of stock at the current price Another way to determine a companyrsquos value is to go to the balance statement and look at the Book Value The Book Value is simply the companyrsquos assets minus its liabilities

Book Value = Assets - Liabilities

In other words if you wanted to close the doors how much would be left after you settled all the outstanding obligations and sold off all the assets A company that is a viable growing business will always be worth more than its book value for its ability to generate earnings and growth

Book value appeals more to value investors who look at the relationship to the stocks price by using the Price to Book ratio

To compare companies you should convert to book value per share which is simply the book value divided by outstanding shares

9) Return on Equity-

If you give some management teams a couple of boards some glue and a ball of string they can build a profitable growing business while other teams canrsquot make a profit with several billion dollars worth of assets

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings You calculate ROE by dividing Net Income by Book Value A healthy company may produce an ROE in the 13 to 15 range Like all metrics compare companies in the same industry to get a better picture

While ROE is a useful measure it does have some flaws that can give you a false picture so never rely on it alone For example if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value A lower book value means yoursquore dividing by a smaller number so the ROE is artificially higher There are other situations such as taking write-downs stock buy backs or any other accounting slight of hand that reduces book value which will produce a higher ROE without improving profits

It may also be more meaningful to look at the ROE over a period of the past five years rather than one year to average out any abnormal numbers

Given that you must look at the total picture ROE is a useful tool in identifying companies with a competitive advantage All other things roughly equal the company that can consistently squeeze out more profits with their assets will be a better investment in the long run

Page | 22

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 23: Fundamental Analysis of securities

Page | 23

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 24: Fundamental Analysis of securities

COMPANY PROFILE

Introduction About India Infoline

Company is one-stop financial services shop most respected for quality of its advice

personalized service and cutting-edge technology

Vision

To become the most respected company in the financial services space in India

India Infoline Group

The India Infoline group comprising the holding company India Infoline Limited and its

wholly-owned subsidiaries straddle the entire financial services space with offerings ranging

from Equity research Equities and derivatives trading Commodities trading Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits GoI bonds and other

small savings instruments to loan products and Investment banking India Infoline also owns

and manages the websites wwwindiainfolinecom and www5paisacom

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns It has more than 800000 customers

Page | 24

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 25: Fundamental Analysis of securities

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India viz the Stock Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory Services and Portfolio Management Services It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with NSDL as well as CDSL as a depository participant providing a one-stop solution for clients trading in the equities market It has recently launched its Investment banking and Institutional Broking business

Head quarters of INDIA INFOLINE

REGISTERED OFFICE ndashIIFL House Sun Infotech ParkRoad no16V Plot NoB-23Thane Industrial AreaWagle Estate Thane - 400604

CORPORATE OFFICE ndashIIFL CenterB Wing Trade CenterKamla Mills CompoundOff Senapati Bapat RoadLower Parel Mumbai - 400013

West Zone North Zone South Zone East Zone

Page | 25

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

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Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

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Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 26: Fundamental Analysis of securities

AHMEDABAD CHANDIGARH BANGALORE KOLKATA RAJKOT LUDHIANA HUBLI SILIGURI BARODA GURGAON MANGLORE BHUBANESWAR GOA DELHI MYSORE INDORE JAIPUR HYDERABAD MUMBAI JAMSHEDPUR SECUNDERABAD PUNE KANPUR VIJAYAWADA BHOPAL VISAKHAPATNAM CHENNAI COIMBATORE MADURAI TIRUPPUR TRICHY

GLOBAL BRANCHES ndash IIFL Singapore ndash IIFL (Asia) Pte Ltd IIFL Dubai ndash IIFL Private Wealth Management (Dubai) Ltd IIFL USA ndash IIFL Inc IIFL UK ndash IIFL Wealth (UK) Tld IIFL Geneva ndash IIFL Private Wealth (Suisse) SA IIFL Hong Kong ndash IIFL Private Wealth Hong Kong Ltd IIFL Mauritius ndash IIFL Private Waelth (Mauritius) Ltd

Page | 26

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 27: Fundamental Analysis of securities

Page | 27

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 28: Fundamental Analysis of securities

TOP MANAGEMENT

Mr Nirmal Jain

Chairman amp Managing Director

Nirmal Jain MBA (IIM Ahmadabad) and a Chartered and Cost Accountant founded Indiarsquos leading financial services company India Infoline Ltd in 1995 providing globally acclaimed financial services in equities and commodities broking life insurance and mutual funds distribution among others Mr Jain began his career in 1989 with Hindustan Leverrsquos commodity export business contributing tremendously to its growth He was also associated with Inquire-Indian Equity Research which he co-founded in 1994 to set new standards in equity research in India

Mr R Venkataraman

Executive Director

R Venkataraman co-promoter and Executive Director of India Infoline Ltd is a B Tech (Electronics and Electrical Communications Engineering IIT Kharagpur) and an MBA (IIM Bangalore) He joined the India Infoline board in July 1999 He previously held senior managerial positions in ICICI Limited including ICICI Securities Limited their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited He was also Assistant Vice President with G E Capital Services India Limited in their private equity division possessing a varied experience of more than 16 years in the financial services sector

Page | 28

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 29: Fundamental Analysis of securities

MILESTONES

1995 - Commenced operations as an Equity Research firm

1997 - Launched research products of leading Indian companies key sectors and the

economy Client included leading FIIs banks and companies

1999 - Launched wwwindiainfolinecom

2000 - Launched online trading through www5paisacom

Started distribution of life insurance and mutual fund

2003 - Launched proprietary trading platform Trader Terminal for retail customers

2004 - Acquired commodities broking license

Launched Portfolio Management Service

2005 - Maiden IPO and listed on NSE BSE

2006 - Acquired membership of DGCX

Commenced the lending business

2007 - Commenced institutional equities business under IIFL

Formed Singapore subsidiary IIFL (Asia) Pte Ltd

2008 - Launched IIFL Wealth

Transitioned to insurance broking model

2009 - Acquired registration for Housing Finance

SEBI in-principle approval for Mutual Fund

Obtained Venture Capital license

2010 - Received in-principle approval for membership of the Singapore Stock Exchange

Received membership of the Colombo Stock Exchange

2011 - Launch of IIFL Mutual Fund

2012 - Announced IIFL Real Estate Fund

2013 - Launched the largest AIF Fund in India

Page | 29

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 30: Fundamental Analysis of securities

INDIA INFOLINE IN BUSINESS

The India Infoline group comprising the holding company India Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of financial services ranging from Equities and Derivatives Trading Commodities Trading Portfolio management services Mutual Fund Life Insurance Fixed deposits GOI Bonds Loan products and other small savings instruments It also owns and operates the websites wwwindiainfolinecom and www5paisacom

India Infoline Ltd is listed on both the leading stock exchanges in India namely the Bombay stock exchange (BSE) and the National stock exchange (NSE)

Its main objective is to achieve customer satisfaction with proper advice and helping them to get maximum returns on their Investment

Indiainfoline offers perfect product mix of tools to understand the stock market with dedicated relationship manager to manage the portfolios Indiainfoline also provide Trader terminal which is designed to make online trading with minimum and hassle free service

PROFILE

Products and Services

Company is a one-stop financial services shop most respected for quality of its advice personalized service and cutting-edge technology

Equity

Indiainfoline provided the prospect of researched investing to its clients which was hitherto restricted only to the institutions Research for the retail investor did not exist prior to Indiainfoline Indiainfoline leveraged technology to bring the convenience of trading to the investorrsquos location of preference (residence or office) through computerized access Indiainfoline made it possible for clients to view transaction costs and ledger updates in real time

Online Software ndash TT Advance

TT-ADV is for the dedicated day traders who churn their portfolio on minor movements in the market sometimes several times a day Their rapid and high volume trading requires a powerful interface for lightning fast order execution It monitors marked to market positions on a minute-to-minute basis with facilities for panic exit It provides all the analysis - fundamental and technical market gossip price and volume information and much more - all at one click

Page | 30

Trader Terminal is almost a substitute for NSE NEAT terminal In fact it has many more powerful features those are

Trade execution in a fraction of a second Live streaming quotes Price watch on any number of scripts

Intra day charts updated live tick-by-tick

Live margin position marked to market profit amp loss report

The Lowest Brokerage on the face of the earth

Set any number of price alerts on any number of scripts

Flexibility to customize screen layout and setting

Facility to customize any number of portfolios amp watch lists

Facility to cancel all pending orders at one click

Facility to square off all transactions at one click

Top Gainers Top Losers Most Active updated live

Index information index chart index stock information live

Market depth ie Best 5 bids and offers updated live for all scripts

Instant trade confirmation

Online access to both accounts and DP

Live updated Order and Trade Book

Details of pending executed and rejected orders

Online access to Customer Service

128 - bit super safe encryption

Facility to place orders on the phone in all major cities

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools

India Infolines world - acclaimed news service and research

Lots morehellip Last but not the least ideas that help you to make money

Page | 31

Corporate Plan

Registration Fee Rs 750

Brokerage [Cash]

Intra-Day 005

Delivery(Normal Settlement) 050

Futures 005

Options 1 of Premium or Rs 100- per lot

Minimum per share Brokerage Rs 005

Documents Required

1 1 passport size Colour Photograph2 1 copy of PAN card3 1 copy of Address Proof (driving license electricity bill telephone bill passport

ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 31: Fundamental Analysis of securities

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ration card rent agreement)4 2 cheques(one cancelled cheque and one margin amount cheque)

Commodity

Commodity is worldwide one of the largest market in terms of volumes second only to Currency trading It can be used like a Hedge against odds of Stock Market To make IIL one stop shop for the customer by adding new financial service to our existing structure IIL is a member of both the leading exchanges ndash MCX NCDEX

Market timing for Bullion Metals Trading is from 1000am to 1155pm and for Agro Commodities 1000am to 500pm

We provide online (Diet Odin) and offline trading on both MCX and NCDEX

Advantages of trading through IIL

Online Offline solutions for trading in Commodities market (MCXNCDEX)

Online Back office Round the clock service for Commodities Commodity wise Research Exclusive RMs for Commodities Trading calls for all commodities during market hours Daily Market Strategy Demat Facility for both the exchanges ndash NSDL Real Time Risk Management

Page | 32

Invest in MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 32: Fundamental Analysis of securities

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Page | 32

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Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth research and advice from research house and tools configured as investor friendly

Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 33: Fundamental Analysis of securities

Invest in MF

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Insurance

An entry into this segment helped complete the clientrsquos product basket concurrently it graduated the Company into a one-stop retail financial solutions provider To ensure maximum reach to customers across India we have employed a multi pronged approach and reach out to customers via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000 a number of private sector insurance service providers commenced operations aggressively and helped grow the market The Companyrsquos entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy

DATA PRESENTATION ANALYSIS amp INTERPRETATION

STEEL SECTOR

INTRODUCTION

The steel industry in India has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16

Indiarsquos steel sector has a competitive advantage vis-agrave-vis the availability of raw material and workforce both skilled and unskilled Iron ore and coal constitute the primary raw materials for steel production

The construction sector is a major consumer of long-products such as rods barscoil sections wire and reinforcing

The construction industry is expected to regain momentum over the next few years with the Indian Government laying emphasis on infrastructure development and increasing expenditure on development activities across sectors

The Eleventh Five Year Plan (2007ndash2012) has allocated investments worth US$ 490 billion for the core infrastructure sector comprising power roads highways railways ports airports mining and irrigation

Page | 33

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 34: Fundamental Analysis of securities

The emphasis on infrastructure development is expected to enable a surge in demand for structural steel components primarily used for construction purposes

The setting up of refineries requires investment in pipe networks to transport crude oil and refined products resulting in heightened demand for steel pipes and tubes

COMPANY NAME

TATA STEEL

ldquoSteel has been and will be the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recoveryrdquo

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO)) is an Indian multinational steel-making company headquartered in Mumbai Maharashtra India

Page | 34

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 35: Fundamental Analysis of securities

and a subsidiary of the Tata Group It was the 11th largest steel producing company in the world in 2013 with an annual crude steel capacity of 253 million tonnes and the second largest steel company in India (measured by domestic production) with an annual capacity of 97 million tonnes after SAIL

Tata Steel has manufacturing operations in 26 countries including Australia China India the Netherlands Singapore Thailand and the United Kingdom and employs around 80500 people Its largest plant is located in JamshedpurJharkhand In 2007 Tata Steel acquired the UK-based steel maker Corus which was the largest international acquisition by an Indian company till that date It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations It was the seventh most valuable Indian brand of 2013 as per Brand Finance

On 16 February 2012 Tata Steel completed 100 years of steel making in India

Tata Steel is headquartered in Mumbai Maharashtra India and has its marketing headquarters at the Tata Centre in Kolkata West Bengal It has a presence in around 50 countries with manufacturing operations in 26 countries including India Malaysia Vietnam Thailand UAE Ivory Coast Mozambique South Africa Australia United Kingdom The Netherlands France and Canada

Tata Steel primarily serves customers in the automotive construction consumer goods engineering packaging lifting and excavating energy and power aerospace shipbuilding rail and defence and security sectors

Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015 it is planning for capacity expansion to be balanced roughly 5050 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 214 million tonnes of capacity including Corus (182 million tonnes) NatSteel (2 million tonnes) and Millennium Steel (12 million tonnes) Tata plans to add another 29 million tonnes of capacity through acquisitionsMajor greenfield steel plant expansion projects planned by Tata Steel include

a 6 million tonne per annum capacity plant in Kalinganagar Odisha India an expansion of the capacity of its plant in Jharkhand India from 68 to 10 million

tonnes per annum

a 5 million tonne per annum capacity plant in Chhattisgarh India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005 the plant is facing strong protest from tribal people)

Page | 35

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 36: Fundamental Analysis of securities

a 3 million tonne per annum capacity plant in Iran

a 24 million tonne per annum capacity plant in Bangladesh

a 105 million tonne per annum capacity plant in Vietnam (feasibility studies are underway) and

a 6 million tonne per annum capacity plant in Haveri Karnataka

Product-

TOP MANAGEMENT OF TATA STEEL LTD

Cyrus Mistry ndash Chairman B Muthuraman ndash Vice Chairman T V Narendran ndash Managing Director Koushik Chatterjee ndash Executive Director

Page | 36

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 37: Fundamental Analysis of securities

FINANCIALS OF TATA STEEL LTD

PROFIT amp LOSS AC

Page | 37

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 38: Fundamental Analysis of securities

Page | 38

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 39: Fundamental Analysis of securities

Page | 39

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 40: Fundamental Analysis of securities

BALANCE SHEET OF TATA STEEL LTD

Page | 40

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 41: Fundamental Analysis of securities

CASH FLOW STATEMENT OF TATA STEEL LTD

Page | 41

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 42: Fundamental Analysis of securities

DIVIDEND SUMMARY OF TATA STEEL LTD

Page | 42

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 43: Fundamental Analysis of securities

SHARE HOLDING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

24 304514362 3199

Institutional Shareholders

1225 399220362 4194

Non Institutional Shareholders

1000608 248194286 2607

TOTAL 1001857 951929010 100

COMPETITION

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TATA STEEL

26230 2547498 41758 643912 9287414

SAIL 6040 2494837 45710 209268 6693305JSW STEEL 88625 2142262 46087 216648 5148583KALYANI STEEL

15525 67968 92216 8331 80874

VISA STEEL

1670 655 92216 -24144 269073

Page | 43

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 44: Fundamental Analysis of securities

FINANCIAL RATIOS amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 898 1104 914 2 PBT Turnover 469 708 498 3 Return on Avg Capital Employed 717 996 790 4 Return on Avg Net Worth -1252 886 -2065 5 Asset Turnover 128 144 142 6 Inventory Turnover (in days) 574 570 5767 Debtors Turnover (in days) 952 991 9938 Current Ratio 101 086 0999 Earnings per Share 6630 6602 521310 Dividend Payout ratio 4663 1114 -6768

1 EBITDATurnover Earnings Before Interest Depreciation Tax and Exceptional ItemsTurnover(EBITDA PAT after minority amp share of associates + Taxes +(-) Exceptional Items + Net Finance Charges + Depreciation)(Turnover Sales amp Other Operating Income less Excise Duty)

2 PBTTurnover Profit Before TaxTurnover( PAT after minority amp share of associates + Taxes +(-) Exceptional Items)

3 Return on Average Capital Employed EBITAverage Capital Employed(Capital Employed Total Funds Employed ndash Miscellaneous Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account))(EBIT PAT after minority amp share of associates + Taxes + (-) Exceptional Items + Net Finance Charges)

4 Return on Average Net Worth PAT after minority amp share of associatesAverage Net Worth(Net Worth Equity Share Capital + Preference Share Capital + Reserves amp Surplus ndash Miscellaneous Expenses to the extent not written off orAdjusted - Foreign Currency Monetary Translation Diff Account)

5 Asset Turnover Net Sales(Total Assets - Investments - Misc Expenses to the extent not written off or adjusted - Foreign Currency MonetaryTranslation Diff Account - Advance Against Equity + Current Liabilities amp Provisions)

6 Inventory Turnover Average InventorySale of Products in days

7 Debtors Turnover Average DebtorsTurnover in days

Page | 44

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 45: Fundamental Analysis of securities

8 Current Ratio Current Assets (excluding advance against equity)Current Liabilities

9 Earnings per share (Basic) Pro1048959 t attributable to Ordinary ShareholdersWeighted average number of ordinary shares

10 Dividend Payout DividendPAT after minority amp share of associates

Interpretation-

1) EBITDAturnover and PBTTurnover -

The EBITDATurnover ratio decline to 898 in the financial year ended March 2015 as against 1104 during the year ended March 2014 Also the PBTTurnover ratio is decline to 469 in the financial year 2014-15 as against 708 during the year ended March 2014 The reason behind the decrease in profitability is due to the increase of overall cost of raw material less demand as compare to expectation and high financial charges on borrowing

2) Return on average capital employed and return on average net worth-

The return on capital employed is decline to 717 in the financial year ended March 2015 as against 996 and 790 during the year ended March 2014 and March 2013 respectively The reason behind these decline is that the decline in the profitability of the company and its performance

3) Asset turnover ratio remained intact for the year ending 2015 and 2014 ie 159 Although it was 175 for the financial year 2013-13

4) Inventory turnover ratio- Inventory turnover ratio is increased by 04 bps going to 574 which was 570 during the year ended March 2015 because of the low demand and sale of product as compare to the actual production

5) Debtors Turnover Ratio- Debtorsrsquo turnover ratio is reduced 952 in the financial year ended March 2015 as against 991 and 933 during the year ended March 2014 and 2013 respectively This shows that debtors are taking more time to repay the amount of debt or the credit period allow to the debtors were increase and also the volume of credit sales were increase

6) Current Ratio- Current ratio jumped to 101 times in the financial year ended March 2015 as against 086 and 099 times during the year ended March 2014 amp 2013 respectively This increase in ratio shows that the firmrsquos ability to meet current obligation is increased by 015 and 002 times as compare to the year ended 2014 amp 2013 respectively This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Page | 45

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 46: Fundamental Analysis of securities

8) EPS- The EPS of the company increased to Rs 6630 because of increase in profit in the financial year ended March 2015 as against Rs 6602 and Rs 5213 during the year ended March 2014 amp 2013 respectively

Page | 46

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 47: Fundamental Analysis of securities

IT SECTOR

INTRODUCTION

Information technology in India is an industry consisting of two major components IT services and business process outsourcing (BPO) The sector has increased its contribution to Indias GDP from 12 in 1998 to 75 in 2012 According to NASSCOM the sector aggregated revenues of US$147 billion in 2015 where export revenue stood at US$99 billion and domestic at US$48 billion growing by over 13Indias prime minister Narendra Modi has started Digital india project to give IT a secured position inside amp outside India

The Indian IT market currently focuses on providing low cost solution in the services business of global IT Presence of Indian companies in the product development business of global IT is very meagre however this number is slowly on the raise US giants that outsource work to India do not allocate the high end SDLC (Software Development Life Cycle) processes like requirement analysis high level design and architectural design although some Indian IT players have enough competency to take up and successfully complete these high level software jobs

The other prominent trend is IT jobs that were earlier confined to Bangalore are slowly starting to experience a geographical diffuse into other cities like Chennai Hyderabad and Pune The growth is not fast paced this can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure The penetration levels are higher for mobile but the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer

Page | 47

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 48: Fundamental Analysis of securities

COMPANY NAME

WIPRO

Wipro Limited (Western India Products Limited) is an Indian multinational IT Consulting and System Integration services company headquartered in Bangalore India As of March 2015 the company has 158200 employees servicing over 900 of the Fortune 1000 corporations with a presence in 67 countries On 31 March 2015 its market capitalization was approximately $ 35 Billion making it one of Indias largest publicly traded companies and seventh largest IT Services firm in the World

To focus on core IT Business it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013 The demerged companies are consumer care lighting healthcare and infrastructure engineering which contributed approximately 10 of the revenues of Wipro Limited in previous financial year

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

Page | 48

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 49: Fundamental Analysis of securities

Wipro Limited is a global company provider of comprehensive IT solutions and services including Systems Integration Consulting Information Systems outsourcing IT-enabled services and RampD services

It is also a value added reseller of desktops servers notebooks storage products networking solutions and packaged software for international brands

Wipro entered into the technology business in 1981 and has over 140000 employees and clients across 54 countries today IT revenues stood at $62 billion for the year ended 31 March 2013 with a repeat business ratio of over 95

The business model at Wipro Technologies Ltd is an industry-aligned customer-facing model which gives greater understanding of customersrsquo businesses to build industry specific solutions

TOP MANAGEMENT OF WIPRO LTD

Azim H Premji ndash Chairman

Suresh Senapaty ndash Executive Director amp CFO

T K Kurien ndash CEO

Page | 49

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 50: Fundamental Analysis of securities

FINANCIALS OF WIPRO LTD

PROFIT amp LOSS AC

Page | 50

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 51: Fundamental Analysis of securities

Page | 51

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 52: Fundamental Analysis of securities

BALANCE SHEET OF WIPRO LTD

Page | 52

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 53: Fundamental Analysis of securities

CASH FLOW STATEMENT OF WIPRO LTD

Page | 53

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 54: Fundamental Analysis of securities

DIVIDEND SUMMARY OF WIPRO LTD

SHARE HOLDING PATTERN

Page | 54

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 55: Fundamental Analysis of securities

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

12 1818022464 7485

Institutional Shareholders

754 373478502 1543

Non Institutional Shareholders

226877 235459077 973

TOTAL 227643 242090043 100

COMPETITION

Page | 55

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 56: Fundamental Analysis of securities

COMPANY NAME

CMP MARKET CAP

SALES NET PROFIT

TOTAL ASSETS

TCS 254715 49891740 7357806 1925696 4566671INFOSYS 108635 24952858 4730000 1216400 4806800WIPRO 57535 14208122 4163500 819310 4065520HCL TECH 93740 13179642 1715344 634595 1580996TECH MAHINDRA

55060 5295338 1916265 225623 1248650

FINANCIAL RATIO amp INTERPRETATION (For last three years)

Sr Ratio 2014-15 2013-14 2012-131 EBITDA Turnover 2232 2350 2086 2 PBT Turnover 2043 2160 1875 3 Return on Avg Capital Employed 2685 2947 2672 4 Return on Avg Net Worth 2366 2516 2331 5 Asset Turnover 111 125 1156 Inventory Turnover (in days) 8596 16980 103687 Debtors Turnover (in days) 494 455 4048 Current Ratio 216 198 1559 Earnings per Share 3318 2995 229410 Dividend Payout ratio 3617 2671 3052

Interpretation of Graphs- (Ratio)

1) The net sales of the company rose by 106 to Rs 4120980 crore in the financial year ended March 2015 as against Rs 3875720 crore during the year ended March 2009 And the sale rose by 170 to Rs 4120980 crore in FY ended March 2015 as against Rs 2630050 during the FY ended March 2011

2) The EBIDTA of the company increased to Rs 1169830 crore in the financial year ended March 2015 as against Rs 1071960 crore during the year ended March 2014 Also the PBT of the company is rose to Rs 1055700 crore in the financial year ended March 2015 as against Rs 960820 crore during the year ended March 2014 And the Net Profit of the company is rose by 090 to Rs 819310 crore in the financial year ended March 2015 as against Rs 738740 crore during the year ended March 2014

3)Though the figures of EBIDATA amp PBT shows increase as compared to previous years figures the ratios have seen a decline from 2350 to 2232 and from 2073 to 1926 respectively This is due to the increase in miscellaneous cost as compared to previous years

Page | 56

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 57: Fundamental Analysis of securities

4) The EPS of the company is rose to Rs3318 per share in the financial year ended March 2015 as against Rs 2995 per share during the year ended March 2014 which shows positive financial result

5) The Dividend of the company is rose to 600 in the financial year 2015 as against 400 during the year ended March 2014

6) Asset turnover ratio came down to 111 in the year ended March 2015 from 125 and 115 for the year ended March 2014 and March 2013 respectively

7) The Current ratio saw an increase of 018 bps from 198 and 216 which shows that the company is ready with 216 time liquid assets to pay off its liquid liabilities

PHARMA SECTOR

INTRODUCTION

Page | 57

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 58: Fundamental Analysis of securities

The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value as per a pharmaceuticals sector analysis report by equity master The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market Considered to be a highly fragmented industryconsolidation has increasingly become an important feature of the Indian pharmaceutical market

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s and with the Patents Act in 1970 However economic liberalization in 90s by the former Prime Minister PV Narasimha Rao and the then Finance Minister Dr Manmohan Singh enabled the industry to become what it is today

The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years as per India Ratings a Fitch Group company Indian pharmaceutical manufacturing facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for any country outside the US

Also growing at an average rate of about 20 per cent Indias biotechnology industry comprising bio-pharmaceuticals bio-services bio-agriculture bio-industry and bioinformatics may reach the US$ 7 billion mark by the end of FY15 according to an industry body Biopharma is the largest sector contributing about 62 per cent of the total revenue with revenue generation to the tune of over Rs 12600 crore (US$ 203 billion) The bio-pharma sector comprises vaccines therapeutics and diagnostics

Moreover the government has been taking several cost effective measures in order to bring down healthcare expenses Thus governments are focusing on speedy introduction of generic drugs into the market This too will benefit Indian pharma companies In addition the thrust on rural health programmes life saving drugs and preventive vaccines also augurs well for the pharma companies

Page | 58

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 59: Fundamental Analysis of securities

COMPANY NAME SUN PHARMACEUTICALS

Sun Pharmaceutical Industries Limited is a multinational pharmaceutical company headquartered in Mumbai Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States The company offers formulations in various therapeutic areas such as cardiology psychiatry neurology gastroenterology and diabetology It also provides APIs such as warfarin carbamazepine etodolac and clorazepate as well as anticancers steroids peptides sex hormones and controlled substances

Sun Pharmaceuticals was established by Mr Dilip Shanghvi in 1983 in Vapi with five products to treat psychiatry ailments Cardiology products were introduced in 1987 followed by gastroenterology products in 1989 Today it is the largest chronic prescription company in India and a market leader in psychiatry neurology cardiology orthopedics ophthalmology gastroenterology and nephrology

The 2014 acquisition of Ranbaxy will make the company the largest pharma company in India the largest Indian pharma company in the US and the 5th largest specialty generic company globally

Over 72 of Sun Pharma sales are from markets outside India primarily in the US The US is the single largest market accounting for about 60 turnover in all formulations or finished dosage forms account for 93 of the turnover Manufacturing is across 26 locations including plants in the US Canada Brazil Mexico and Israel In the US the company markets a large basket of generics with a strong pipeline awaiting approval from the US Food and Drug Administration (FDA)

Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times The founding family continues to hold a majority stake in the company Today Sun Pharma is

Page | 59

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 60: Fundamental Analysis of securities

the second largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges

The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion In terms of value India still stands at number 14 in the world

TOP MANAGEMENT OF SUN PHARMA

Israel Makov Chairman Dilip Shanghvi Managing Director

Sudhir V Valia Executive Director

Sailesh T Desai Executive Director

Page | 60

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 61: Fundamental Analysis of securities

FINANCIALS OF SUN PHARMA

PROFIT amp LOSS AC

Page | 61

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 62: Fundamental Analysis of securities

Page | 62

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 63: Fundamental Analysis of securities

BALANCE SHEET OF SUN PHARMA

Page | 63

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 64: Fundamental Analysis of securities

CASH FLOW STATEMENT OF SUN PHARMA

DIVIDEND SUMMARY OF SUN PHARMA

Page | 64

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 65: Fundamental Analysis of securities

SHARE HOLING PATTERN

CATEGORY OF SHARE HOLDER

TOTAL NO OF SHARE HOLDERS

TOTAL NO OF SHARES

TOTAL SHARE HOLDING AS OF TOTAL SHARES

Promoter amp Promoters Group

28 1316496400 5471

Institutional Shareholders

1370 758237921 3151

Non Institutional Shareholders

382958 331689027 1378

TOTAL 384356 2406423348 100

COMPETETION

NAME CMP MARKET CAP

SALES NET PROFIT

ASSETS

SUN PHARMA

936 225404 8017 -1472 9816

LUPIN 1890 85061 9752 2397 9067Dr REDDYS 4295 73264 10010 1679 13758CIPLA 691 55542 10131 1181 12470AUROBINDO PHARMA

798 46650 8095 1516 8256

Page | 65

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 66: Fundamental Analysis of securities

FINANCIAL RATIO AND INTERPRETATION

Sr Ratio 2013-14 2012-13 2011-121 EBITDA Turnover 060 2107 4379 2 PBT Turnover -282 1599 3860 3 Return on Avg Capital Employed 094 847 2558 4 Return on Avg Net Worth -3818 663 2154 5 Asset Turnover 032 031 055 6 Inventory Turnover (in days) 308 280 6277 Debtors Turnover (in days) 475 335 6398 Current Ratio 079 231 2689 Earnings per Share -1366 499 163910 Dividend Payout ratio -1139 8595 2482

Interpretation-

From the above data we see that the profitability ratio per share data and the Gearing ratios have fallen dramatically due to the loss incurred by the organization because of acquisition of Ranbaxy by Sun Pharma

Sales -

In FY 14 the net sales of the company rose by 090 to Rs 282879 cr as compared to Rs 243214 Cr in the FY 13 The exports to US also increased to a substantial level

Per share data-

EPS of the company went down to negative figure of -1366 for the year ended Marchrsquo14 as compared to the EPS of Rs499 for the year ended Marchrsquo13

Current Ratio-

The current ratio measures companies short term solvency that is its ability to meet short term obligation As measures of short term current financial liquidity it indicates the rupee of current asset available for each rupee of current liability obligation payable The more is the ratio it shows the firmrsquos ability to meet current obligation and greeter is the safety of funds of short term creditors

In our case the ratio of company is decline to 079 in the financial year ended March 2014 as against 231 during the year ended March 2013 It means that the firms ability to meet current obligation is reduces by 152 but from the investors point of view its good because the investment of current asset is reduces as compare to last year with reference to its

Page | 66

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 67: Fundamental Analysis of securities

obligation This also indicates that the firm is able to manage its routine expenses in less fund which leads to reduction in financial expenses of firm

Returns-

Return on networth and return on capital employed also came down as compared to last two years data This is again due to low returns as compared to the capital investment which has been done by the company for carrying out the business

Page | 67

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 68: Fundamental Analysis of securities

FINDINGS AND CONCLUSION

FINDINGS

1)WIPRO

The sales figure of Wipro saw a good increase from 3876510 Cr In FY 14 to Rs41210 Cr In FY 15 This increase can been seen in each yea The company is consistently out performing its past record thereby leading to increase in sales and thus profitability

The net profit figures of the company have almost doubled since 2011 where it was around Rs 484370 Cr which is now Rs 819310 Cr Company also takes care of its investors and has a good track record in terms of dividend Fr the year 2015 the company has declared the dividend of 600 for its investors

2) TATA STEEL

Tata Steel Group consistently showed a good performance in terms of its net sales turn over which have almost doubled since 2010 It is increasing on YoY basis though we get to see some ups and down on QoQ basis The EBIDTA saw a decline due to increase in miscellaneous expenses in increase in cost of employees

Groups net profit saw a small increase from 641219 cr in FY 14 to Rs 643912 Cr In FY 15 but as compared to FY 13rsquos financials the profit grew surprisingly well from 506297 cr If compared on QoQ basis according to Quartely results for the quarter ended June 15 the net profit of the group increased from Rs 81409 Cr In March 15 quarter to Rs 124861 Cr Which was more than the projected gains

3) SUN PHARMA

The sales of the company keeps on rising on continuous YoY basis Though the current financials of the company doesnrsquot looks so well the company has a true potential to outperform its old data and increases revenues

Moreover the current negative earnings were due to the acquisition of Ranbaxy by the company which again in long term will lead the company to new highs

The company has a huge market base in US markets thereby increasing its net turnover ad huge increase in exports which result in increase in profitability

Page | 68

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 69: Fundamental Analysis of securities

SUGGESTION(For investors)

All the three companies are strong as per there fundamentals These all are able to compete with their competitors and generating the profits for achieving the higher rate of growth and are able to make the profits from their business My suggestions are

1) Investor should prefer Wipro for their investment first and then Tata steel amp Sun pharma respectively

2) On the basis of duration of investment-

For short term investment - Sun PharmaReasons - As the company is pharma based company and a huge part of the income comes from US there may be chances that the regulatory may any time come up with new technology and make stop distribution of the current products

For medium term investment- Tata SteelReason- Based on the fundamental study of the company it has registered positive growth for 1st Quarter this year as against negative growth in previous year Furthermore steel industry is currently at 5th position in terms of production and is expected to be 2nd largest producer by 2015 As Tata steel hold a 10 market share of Indian steel industry it is definitely bound to show aggressive growth in near future

For long term investment -Tata Steel limitedReason - IT is one of the most promising sector in todays Indian economy Consistent good performance of Wipro Ltd makes it a favourite blue chip stock for safe players For long term perspective the company is a great pick as it seems to be under valued

3) On the basis of risk- Investor should prefer Wipro Ltd (low risk)

TATA STEEL LTD

CMP (As on 21082015) ndash Rs 237-

52 week high - Rs 542

52 week low- Rs 229

Target 1 - Rs 350 (1 year)

Target 2- Rs 450 (15 ndash 2 Years)

Page | 69

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 70: Fundamental Analysis of securities

WIPRO

CMP (As on 21082015) ndash Rs 576

52 week high - Rs 677

52 week low- Rs 512

Target 1 - Rs 650 (6 months)

Target 2- Rs 700 (1 Year)

SUN PHARMA

CMP (As on 21082015) ndash Rs 937

52 week high - Rs 1200

52 week low- Rs 748

Target 1 - Rs 1000 (3 months)

Target 2- Rs 1100 (1 Year)

Page | 70

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 71: Fundamental Analysis of securities

CONCLUSION

Fundamental analysis can be valuable but it should be approached with caution If you are reading research written by a sell-side analyst it is important to be familiar with the analyst behind the report

We all have personal biases and every analyst has some sort of bias There is nothing wrong with this and the research can still be of great value Learn what the ratings mean and the track record of an analyst before jumping off the deep end

Corporate statements and press releases offer good information but they should be read with a healthy degree of scepticism to separate the facts from the spin

Press releases dont happen by accident they are an important PR (Public relation) tool for companies Investors should become skilled readers to weed out the important information and ignore the hype

BIBLIOGRAPHY

Page | 71

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY
Page 72: Fundamental Analysis of securities

Books- Financial Management by I M Pandey Financial Management by Khan amp Jain

Websites-

wwwindiainfolinecom wwwmoneycontrolcom wwwtatasteelcom wwwwiprocom wwwsunpharmacom wwwwikipediacom

Page | 72

  • FOR
  • SUBMITTED TO
  • ACKNOWLEDGEMENT
  • SR NO
  • PARTICULARS
  • PAGE NO
  • 1
  • Declaration
  • 02
  • 2
  • Acknowledgement
  • 03
  • 3
  • Introduction
  • 06
  • 4
  • Objectives
  • 07
  • 5
  • Scope of Study
  • 08
  • 6
  • Fundamental Analysis
  • 08
  • 7
  • Economy Analysis
  • 09
  • 8
  • Industry Analysis
  • 10
  • 9
  • Company Analysis
  • 14
  • 10
  • Fundamental Analysis Tools
  • 16
  • 11
  • IIFL - Company Profile
  • 23
  • 12
  • Introduction ndash About IIFL
  • 23
  • 13
  • Corporate Structure
  • 27
  • 14
  • Top Management
  • 28
  • 15
  • Milestones
  • 29
  • 16
  • IIFL in Business
  • 30
  • 17
  • Data Presentation Analysis amp Interpretations
  • 33
  • 18
  • Steel Sector - Introduction
  • 33
  • 19
  • Tata Steel - Introduction
  • 34
  • 20
  • Financials of Tata Steel
  • 37
  • 21
  • Interpretations ndash Tata Steel
  • 44
  • 22
  • IT Sector - Introduction
  • 46
  • 23
  • Wipro - Introduction
  • 47
  • 24
  • Financials of Wipro
  • 49
  • 25
  • Interpretations - Wipro
  • 54
  • 26
  • Pharma Sector - Introduction
  • 56
  • 27
  • Sun Pharma ndash Introduction
  • 57
  • 28
  • Financials of Sun Pharma
  • 59
  • 29
  • Interpretations ndash Sun Pharma
  • 64
  • 30
  • Findings amp Conclusion
  • 66
  • 31
  • Suggestions
  • 67
  • 32
  • Conclusions
  • 69
  • 33
  • Bibliography
  • 70
  • INTRODUCTION
  • 11 INTRODUCTION
    • Fundamental Analysis
    • Technical Analysis
      • SCOPE OF STUDY-
      • FUNDAMENTAL ANALYSIS
      • FUNDAMENTAL ANALYSIS TOOLS
      • TOP MANAGEMENT
      • MILESTONES
      • INDIA INFOLINE IN BUSINESS
      • PROFILE
      • DATA PRESENTATION ANALYSIS amp INTERPRETATION
      • STEEL SECTOR
      • COMPANY NAME
      • TATA STEEL
        • Expansion plans
          • FINANCIAL RATIOS amp INTERPRETATION
          • IT SECTOR
          • INTRODUCTION
          • FINANCIAL RATIO amp INTERPRETATION
          • PHARMA SECTOR
          • INTRODUCTION
          • COMPANY NAME
          • SUN PHARMACEUTICALS
          • FINANCIALS OF SUN PHARMA
          • BALANCE SHEET OF SUN PHARMA
          • FINANCIAL RATIO AND INTERPRETATION
          • FINDINGS AND CONCLUSION
          • FINDINGS
          • SUGGESTION
            • WIPRO
            • SUN PHARMA
              • CONCLUSION
              • BIBLIOGRAPHY