Fundamental Analysis of Scrips & Sector

8/9/2019 Fundamental Analysis of Scrips & Sector

1/72

FUNDAMENTAL ANALYSIS OF SCRIPS & SECTOR

CHAPTER-1CHAPTER-1

INTRODUCTION TO MOTILAL OSWALINTRODUCTION TO MOTILAL OSWAL

HISTORYHISTORY MILESTIONMILESTION

MOST GUIDING PRINCIPLES & COREMOST GUIDING PRINCIPLES & CORE

VALUESVALUES

1


2/72


Motilal Oswal Securities Ltd.

One of the top-ranking broking houses in India, with a dominant

position in both institutional and retail broking, Motilal Oswal

Securities Ltd. is amongst the best-capitalized firms in the broking

industry in terms of net worth.

Motilal Oswal Securities Ltd. was founded in 1987 as a small sub-

broking unit, with just two people running the show. Focus on

customer-first-attitude, ethical and transparent business practices

respect for professionalism, research-based value investing and

implementation of cutting-edge technology have enabled it to

blossom into a thousand-member team.

The institutional business unit has relationships with several leading

foreign institutional investors (FIIs) in the US, UK, Hong Kong and

Singapore. In a recent media report Motilal Oswal Securities Ltd. was

rated as one of the top-10 brokers in terms of business transacted for

FIIs.

The retail business unit provides equity investment solutions to more

than 1,50,000 investors through 650 outlets spanning 320 cities.

Motilal Oswal Securities Ltd. provides services like Advice-Based

Broking, Portfolio Management Services (PMS), E-Broking Services,

Depository Services, Commodities Trading, and IPO and Mutual

2


3/72


Fund Investment Advisory Services. Its Value PMS Scheme gave a

305% post-tax return for the period of February 2003 to August 2005.

Motilal Oswal Securities Lets equity research has been consistently

ranked very highly in surveys conducted by leading international

publications like Asia Money and Institutional Investor. In Asia Money

Brokers Poll 2003 Motilal Oswal Securities Ltd. has been rated as the

Best Domestic Research House - Mega Funds, while in 2000 and

2002 it has been rated as the Best Domestic Equity Research House

and Second best amongst Indian Brokerage firms respectively. The

unique Wealth Creation Study, authored by Mr Raamdeo Agrawal,

Managing Director, is now in its tenth year. Investors keenly await the

annual study for the wealth of information it has on how companies

created wealth during the preceding five years.

The organization finds its strength in its team of young, talented and

confident individuals. Qualified professionals carry out different

functions under the able leadership of its promoters, Mr. Motilal

Oswaland Mr. Raamdeo Agrawal. Its stringent employee selection

process, focus on continuous training and adoption of best

management practices drive Motilal Oswal Securities Ltd. quest to

achieving its vision.

One thing that sets Motilal Oswal Securities Ltd. apart is its time-tested and well-recognized equity research capability. With value

investing at the core of its investment philosophy, a strong research

team consistently provides high-performance ideas. These are in turn

converted to sound, personalized investment strategies, keeping in

3
http://www.motilaloswal.com/wc2005/wc2005.pdfhttp://www.motilaloswal.com/people.htmhttp://www.motilaloswal.com/people.htmhttp://www.motilaloswal.com/people.htmhttp://www.motilaloswal.com/people.htmhttp://www.motilaloswal.com/wc2005/wc2005.pdfhttp://www.motilaloswal.com/people.htmhttp://www.motilaloswal.com/people.htmhttp://www.motilaloswal.com/people.htmhttp://www.motilaloswal.com/people.htm


4/72


view unique client needs. As a result, the Capital Market now

recognizes Motilal Oswal Securities Ltd. as synonymous to Solid

Research and Solid Advice.

MOST GUIDING PRINCIPLES & CORE VALUES.

Customer interest is paramount Ethical and transparent business practices

Respect for professionals, associates and business

partners

Research based value investing

Cutting edge technology to ensure world-class customer

service

4


5/72


MOST HISTORY & MILESTONES

The story of MOST goes back many years, when Mr. Motilal Oswal

and Mr. Raamdeo Agrawal met each other as students in a Mumbai

suburban hostel in the early eighties. Both the young chartered

accountants hailing from a rural & an unpretentious background had

a common dream viz 'to build a professional organization with strong

value systems, to provide reliable & honest investment advice toinvestors'. Thus was born their first enterprise called "Prudential

Portfolio Services" in 1987.

2004 2003 2002 2001 2000 1999 1998 1996 1995 1994

19901987

2004

Presence expanded to 270 outlets in 150 cities and 20 states

Value PMS delivers a whopping 160% post tax returns for the

period ended April 2004

Bulls Eye PMS - A momentum based PMS launched

Start of the Solid Research Solid Advice campaign

2003 MOSt Portfolio Management Services launched with Mr.

Raamdeo Agrawal as the Portfolio Manager. Uniquely

structured performance related fees.

Inquire team is successful in capturing the uptrend in Banking,

Auto and Infrastructure sectors.

15,000 Depository clients acquired.

9 own branches setup at 7 cities to provide Equity Advisory

5
http://www.motilaloswal.com/history.htm#12http://www.motilaloswal.com/history.htm#11http://www.motilaloswal.com/history.htm#10http://www.motilaloswal.com/history.htm#9http://www.motilaloswal.com/history.htm#8http://www.motilaloswal.com/history.htm#7http://www.motilaloswal.com/history.htm#6http://www.motilaloswal.com/history.htm#5http://www.motilaloswal.com/history.htm#4http://www.motilaloswal.com/history.htm#3http://www.motilaloswal.com/history.htm#2http://www.motilaloswal.com/history.htm#1http://www.motilaloswal.com/history.htm#12http://www.motilaloswal.com/history.htm#11http://www.motilaloswal.com/history.htm#10http://www.motilaloswal.com/history.htm#9http://www.motilaloswal.com/history.htm#8http://www.motilaloswal.com/history.htm#7http://www.motilaloswal.com/history.htm#6http://www.motilaloswal.com/history.htm#5http://www.motilaloswal.com/history.htm#4http://www.motilaloswal.com/history.htm#3http://www.motilaloswal.com/history.htm#2http://www.motilaloswal.com/history.htm#1


6/72


Services. More in the pipeline.

150 outlets in 110 cities across 18 states & one Union

Territory in India manned by 1000 people servicing over 15,000

Retail and Institutional Investors.

2002

Mr. Navin Agarwal, Head of Equity Research & Institutional

sales, is inducted in the Board of Directors

MOSt consolidates its retail operations & upgrades its IT /

Back Office infrastructure to cater to its growing network of

branches, Franchisees and Channel Partners.

Retail network completes coverage of 100 cities in India.

Direct servicing of HNI clients is initiated.

10,000 Depository clients acquired.

2001

Legendary marketing guru Shunu Sens services taken to

revitalise retail marketing strategy and branding efforts.

Starts offering Derivatives products and advisory services on

both BSE as well as NSE

2000

Both Mr. Motilal Oswal and Mr. Raamdeo Agrawal receive

Rashtriya Samman Patra from Central Board of Direct Taxes for

being amongst the top 50 tax payers in India from FY94-FY98

Acquires its 100th Franchisee / Channel Partner and emerges

as a leading player in the Indian Broking Sector

Becomes a Depository Participant of Central Depository

Services Limited (CDSIL)

6


7/72


1999

Mr. Raamdeo Agrawal starts attending legendary billionaire

investor Warren Buffetts Annual General Meetings of

Berkshire Hathway Inc. He still continues to attend it every

year.

The Wealth Creation Study started in 1996 culminates into

Wealth Creation Seminar and Awards function in 1998.

First Stock Broking house to brand its services as a

research and advise based broker.

Wealth Creation Campaign started.

www.MotilalOswal.com launched. First broking house in

India to go on the web.

Becomes a Depository Participant of National Securities

Depository Limited (NSDL).

Inducts Mr. Ivan Mathias, former country head of Watson

Wyatt Worldwide, on its Board to Directors to shape HR

initiatives.

1998 Mr. Motilal Oswal joins the Governing Board of The Stock

Exchange, Mumbai.

1996

Wealth Creation Study started. First of its kind study initiated

to identify biggest and fastest wealth creating companies in

Indian Stock markets.

1995 Motilal Oswal gets incorporated as Motilal Oswal Securities

Ltd.

1994 MOSt acquires NSE Membership and plans for majorexpansion of its retail network.

Inquire (Indian Equity Research) is formally created at a 2500

sq. ft office in South Mumbai with bigger and better quality

infrastructure than the corporate office. Since then nearly 20%

7


8/72


of revenue is allocated to research. First Domestic Stock

broking house to have such a strong Research focus

Motilal Oswal enters Institutional Broking business.

1990

After just three years in the business, Motilal Oswal isformed through acquisition of membership on The Bombay

Stock Exchange (BSE). Three more memberships taken in later

years.

1987

Mr. Motilal Oswal and Mr. Raamdeo Agrawal lay the

foundation of a great partnership by starting a sub-broking firm.

The venture stands out from the rest due to their approach of

Research-based broking even when sub-brokers.

Mr. Raamdeo Agrawal is the co-promoter of Motilal Oswal Securities

Ltd. A member of the Institute of Chartered Accountants of India & an

equity research stalwart, he is the man behind the strong research

capability at MOST.

He is respected by all in the research and broking industry for his

valuable insights on issues related to equity research. His firm belief

in Value-Investing, as practiced by the legendary Warren Buffett

and Charlie Munger, forms the core of MOST investment philosophy.

8


9/72


Management Team

MOST management team is regularly engaged in finding ways to

improve operational efficiencies and customer satisfaction.You will find CAs, CFAs, ICWAs, CSs, MBAs and IT professionals

managing crucial functions, to bring you best products and services -

from research & advice to trade execution & settlement. At MOST we

practice meritocracy and each of the team members is provided

extensive training.

Training & Manpower Development

MOST conducts various training and development programs regularly

to enhance the capabilities of its team. As much as 5% of the salary

bill is spent on such programs, which is amongst the highest for a

broking organization in India. MOST is truly a learning organization

with lead being taken by the Directors, who regularly participate in top

management learning programs like Strategic Management Program

at Indian School of Business, Hyderabad, Strategy Summits with

Management Gurus like Tom Peters and Dr. Lester Throw, Dean,

Sloan School of Management, (MIT) and Brand Management

Seminar by Al Rise etc.

MOST Wealth Creation Study and Awards function

MOST Wealth Creation Study and Awards function has become a

key event in the Indian Capital Market. The Wealth Creation Study,

initiated, in 1996 is widely appreciated in the investment community

9


10/72


and the Indian Corporate Sector. This annual study identifies the

fastest and the biggest wealth creators in the Indian markets over the

last 5 years and felicitates them at a public event, attended by several

leading investors and equity specialists.

The 9th Wealth Creation Awards function was held at the Grand

Hyatt, Mumbai on January, 2005.

Foundation Day

Arising from its deep respect for Knowledge & Value Addition, MOST

celebrates its Foundation Day in a truly unique manner. Not only are

the top performing team members and Business Partners rewarded

for their contributions, but they are also provided training on important

subjects like Customer Profiling, Selling, and Investment Advising etc.

Lot of learning takes place through sharing of successful practices by

MOST Business Partners.

Wealth Creation Seminars

MOST conducts Wealth Creation Seminars across the country

regularly to educate individual investors about our research products,

derivatives market, investment strategies and latest opportunities in

the stock markets. Our senior executives, research analysts and

investment strategists address the audience and personally interactwith the investors.

10


11/72


CHAPTER 2CHAPTER 2

CAPITAL MARKETCAPITAL MARKET

11


12/72


INTRODUCTIONINTRODUCTION

COMPONENTS OF CAPITALCOMPONENTS OF CAPITAL

MARKETMARKET

INTRODUCTION

Capital market deals with long-term funds. It supplies long-term and

medium funds. Capital market deals with ordinary shares, debenture,bonds and stocks of corporations and securities of the government.

The funds which flow into the capital market come from various

institutions. Capital market provides a market mechanism for those

who have savings and to those who need funds for productive

12


13/72


investments. It diverts resources from wasteful and unproductive

channels to productive investments. One of the prime indicators in

the growth of capital markets is the growth of joint stock companies

and enterprises.

In 1951 there were 28500 companies with paid-up capital of nearly

Rs.775 crores and as on 31-03-98 there were more than 200000

companies with Paid-up capital of nearly Rs.137959 crores.

COMPONENTS OF THE CAPITAL MARKET

In a capital market, banks and financial institution are important

companies. They act as catalysts in the economic development of

any country. This institution mobilizes financial savings from

households, corporate and other sector of the economy and channels

them into productive investments. They act as a reservoir of

recourses and from the backbone of the economic and financial

system. The main companies of capital market in India are:

1) Primary Market

2) Secondary market

Primary market

13


14/72


Primary market is also called as new-issue market. The New Issue

market creates financial claims. The New Issue Market deals with

those securities which have been made available to the public for first

time. The new issue of shares is subscribed to the corporate sector

through the application forms before the closing date of the issue.

Secondary Market

The stock exchange, are the secondary markets. They cover public,

private and joint sector by providing facilities for the transferability of

shares held by the public. The stock-exchanges not only effect

purchase and sale of securities but also make a continuous valuation

of securities traded in the market. The stock exchange is a medium of

transfer of recourses for those securities which have already been

issued. The brokers, the investors, mutual funds and the financial

institution are the important constituents of the secondary market

consisting of regional stock exchanges, BSE.

CHAPTER-3CHAPTER-3What is script analysis & SectorWhat is script analysis & Sector

14


15/72


MEANING OF SCRIP?MEANING OF SCRIP?

MEANING OF SECTORS?MEANING OF SECTORS?

BOMBAY STOCK EXCHANGEBOMBAY STOCK EXCHANGE

NATIONAL STOCK EXCHANGENATIONAL STOCK EXCHANGE

OTCEIOTCEI (OVER THE COUNTER

EXCHANGE OF INDIA)

MEANING OF SCRIP

In language of stock market, scrip means the name of the company

by which the company recognizes into the stock market. There were

23 stock exchanges in security market. IN all these stock exchanges,

there were number of scrip in the stock market. But in present these

15


16/72


all stock exchanges are merged with NSE AND BSE. So that all

scripts are listed only under two stock changes. In NSE around 1830

scripts of equity are listed and overall 11360 scrip are listed. There is

one another stock exchange otcel (Over the Counter Exchange of

India). It is used only for over the counter trading.

Before a year, when all exchange were separate; then rules and

regulation of listing agreement were different in stock exchanges

such as for the listing in NSE, company has to require more than RS

10 crores net worth and also company has to paid dividend to their

shareholder continuously for last three years. In the BSE there are

listed those companies whose net worth across the RS 1 crore. But at

time when BSE started, only those companies are listed, who are

having more than RS 25000 net worth. Thus, all stock exchanges

having difficult rules and regulations.

These all scrip like, HLL, Infosys, Wipro, Tata Power, TISCO, Nirma,

Reliance Industry etc., are discriminated into various group in

accordance to their turnover, trading volume, net worth, Traders, etc.

these are many groups like a group, B1 groups, B2 group, Z group, T

group and in 2005 one another group is added group Severe group

having different features for holding scrip like

GROUP a having some features are as follow:

The share should be fully paid up

The companys paid up capital should be at least rs 5 crore

16


17/72


The number of share holder must be more than 20000

The companys shares should have market capitalization of at

least rs 10 crore

The company should be a growth potential

GROUP Bhai shares those which are first listed will be kept in non

specified. None specified groups split into b1 and b2 groups. The

carry forward facility is not available to group b shares.

GROUP C only for odd lots deal. Only standard trading units i.e.,prescribed round lots are traded on stock exchange.

MEANING OF SECTOR

The manufacturer of the some products is come together and

establishes of homogeneous groups and this group is called an

industry which is particular sector. There are many companies orscrip that manufacturer the same products provide services are

comes and specified under the particular name that is called sector.

E.G. HLL specified under the FMCG sector, Infoysys, Wipro under

the IT sector.

There are many sectors in which many types of scrip are listed. Few

sectors among these are as follows.

Software Sector

Banking Sector

FMCG Sector

17


18/72


Power Sector

Garment Sector

Automobile Sector

Cement Sector

Petrochemicals Sector

Telecommunication Sector

Pharmaceutical Sector

Shipping Sector

Agriculture Sector

Steel Sector

Fertilizer Sector

IN all sector number of scrip are listed so it is easier to find out

any particular scrip from the market.

BOMBAY STOCK EXCHANGE (BSE)

The Sock Exchange Mumbai, popularly known as BSE was

established in 1975 as The Native Share and Stock Brokers

18


19/72


association. It is the oldest one in Asia, even older than the Tokyo

stock exchange, which was established in 1878. It is a voluntary non-

profit marking Association of Persons (AOP) and is currently engaged

in the process of converting itself into demutualised and corporate

entity. It has evolved over the years into its present status as the

premier Stock Exchange in the Country to have obtained permanent

recognition in 1956 from the Govt. pg India under the securities

Contracts (Regulation) Act, 1956.

The Exchange, while providing an efficient and transparent market for

trading in securities, debt and derivatives upholds the interests of the

investors. And ensures redressed of their grievances Board having

20 directors is the apex body, which decides the policies and

regulates the affairs of the exchange. The Governing Board consists

9 elected directors, who are from the broking community (one third of

them retire ever year by rotation), three SEBI nominees, six public

representatives and an Executive Director & Chief Executive Officer

and a Chief Operating Officer. The Executive Director as the Chief

Executive Officer is responsible for day-to-day administration of the

exchange and he is assisted by the chief operating considers judicial

& quasi matters in which the Governing Board has powers as an

Appellate Authority, matters regarding annulment of transactions,

admission, continuance and suspension of member-brokers,

declaration of a member-broker as defaulter, norms, procedures and

other matters relating to arbitration, fees, deposits, margins, and

other monies payable by the member-brokers to the exchange, etc.

19


20/72


Turnover on the Exchange

The average daily turnover of the Exchange during the financial

year 2000-2001 (April-March) was Rs.3984.19 crores and the

average number of daily trades was 5.69 lakhs.

The average daily turnover of the exchange in the subsequent

two financial years, i.e., 2001-02 & 2002-03, has declined

considerably to Rs. 1248.15 crores and Rs. 1251.29 crores

respectively.

The average number of daily trades recorded during 2001-02

and 2002-03 numbered 5.17 lakhs and 5.63 lakhs respectively.

NATIONAL STOCK EXCHANGE (NSE)

With the liberalization of the Indian economy, it was found inevitableto lift the Indian stock market trading system on par with the

international standards. On the basis of the recommendations of high

powered Pertain Committee, the national Stock Exchange was

incorporated in 1992 by Industrial Development Bank of India (IDBI),

Industrial Credit and Investment Corporation of India (ICICI),

Industrial Finance Corporation of India (IFCI), all Insurance

Corporations, selected commercial banks and others.

Trading at NSE can be classified under two broad categories:

20


21/72


(a)Wholesale market and

(b)Capital market.

Wholesale debt market operations are similar to money market

operations- institutions and corporate bodies enter into high value

transactions in financial instruments such as government

securities, treasury bills, public sector unit bonds, commercial

paper, certificate of deposit, etc.

There are two kinds of players in NSE:

(a)Trading members and

(b)Participants.

Recognized members of NSE are called trading members who

trade on behalf of themselves and their clients. Participants

include trading members and large players like banks who take

direct settlement responsibility.

Trading at NSE takes place through a fully automated screen

based trading mechanism which adopts the principle of an order-

driven market. Trading members can stay at their offices and

execute the trading, since they are linked through a

communication network. The prices at which the buyer and seller

are willing to transact will appear on the screen. When the prices

21


22/72


match the transaction will be completed and a confirmation slip will

be printed at the office of the trading member. NSE has several

advantages they are as follows:

Investor can trade at the same price from anywhere in the

country since inter-market operations are streamlined

coupled with the countrywide access to the securities.

Delays in communication, late payments and the

malpractices prevailing in the traditional trading mechanismcan be done away with greater operational efficiency and

informational transparency in the stock market operations,

with the support of total computerized network.

Unless stock markets provide professionalized service, small

investors and foreign investors will not be interested in capital

market operations. And capital market being one of the major

sources of long-term finance for industrial projects, India cannot

afford to damage the capital market path. In this regard NSE gains

vital importance in the Indian capital market system.

OVER THE COUNTER EXCHANGE OF INDIA (OTCEI)

The traditional trading mechanism prevailed in the Indian stock

markets gave way to many functional inefficiencies, such as, absence

of liquidity, lack of transparency, unduly long settlement periods and

22


23/72


benami transactions, which affected the small investors to a great

extent. To provide improved services to investors, the countys first

ringlets, scripless, electronic stock exchange OTCEI was created

in 1992 by countrys premier financial institutions unit trust of India

(UTI), industrial credit and investment corporation of India (ICICI),

industrial development bank of India (IDBI), SBI capital markets,

industrial finance corporation of India (IFCI), general insurance

corporation and its subsidiaries can bank financial services.

Trading at OTCEI is done over the centers spread across the

country. Securities traded on the OTCEI are classified into:

Listed securities the shares and debentures of the companies

listed on the OTC can be bought or sold at any OTC counter all

over the country and they should not be listed anywhere else

Permitted securities certain shares and debentures listed on

other exchanges and units of mutual funds are allowed to be

traded

Initiated debentures any equity holding at least one lakh

debentures of particular scrip can offer them for trading on the

OTC.

OTC has a unique feature of trading compared to other traditional

exchanges. That is, certificates of listed securities and initiated

debentures are not traded at OTC. The original certificate will be

safely with the custodian. But, a counter receipt is generated out at

the counter which substitutes the share certificate and is used for all

transactions.

23


24/72


In the case of permitted securities the system is similar to a

traditional stock exchange. The difference is that the delivery and

payment procedure will be completed within 14 days.

Compared to the traditional exchanges, OTC exchange network

has the following advantages:

OTCEI has widely dispersed trading mechanism across

the country which provides greater liquidity and lesser riskof intermediary charges.

Greater transparency and accuracy of prices is obtained

due to the screen-based scrip less trading.

Since the exact price of the transaction is shown on the

computer screen, the investor gets to know the exact

price at which s/he is trading.

Faster settlement and transfer process compared to other

exchanges.

In the case of on OTC issue (new issue), the allotment

procedure is completed in a month and trading

commences after a month of the issue closure, whereas it

takes a longer period for the same with respect to other

exchanges.

24


25/72


Thus, with the superior trading mechanism coupled with information

transparency investors are gradually becoming aware of the

manifold advantages of the OTCEI.

Debentures are not traded at OTC. The original certificate will be

safely with the custodian. But, a counter receipt is generated out at

the counter which substitutes the share certificate and is used for all

transactions.

In the case of permitted securities, the system is similar to a

traditional stock exchange. The difference is that the delivery and

payment procedure will be completed within 14 days.

Compared to the traditional exchanges, OTC exchange network has

the following advantages:

OTCEI has widely dispersed trading mechanism across the county

which provides greater liquidity and lesser risk of intermediary

charges.

Greater transparency and accuracy of prices is obtained due to the

screen based scripless trading.

Since the exact price of the transaction is shown on the computer

screen, the investor gets to know the exact price at which she is

trading.

25


26/72


Faster settlement and transfer process compared to other

exchanges.

In the case of an OTC issue the allotment procedure is completed in

a month and trading commences after a month of the issue closure,

whereas it takes a longer period for the same with respect to other

exchanges.

Thus, with the superior trading mechanism coupled with information

transparency investors are gradually becoming aware of the

manifold advantages of the OTCEI.

CHAPTER-4CHAPTER-4

Fundamental analysis of FMCG and ITFundamental analysis of FMCG and IT

26


27/72


Economic analysisEconomic analysis

Industry analysisIndustry analysis

Company analysisCompany analysis

ECONOMIC ANAYASIS OF FMCG

Inflation

After remaining on a southward curve for 15 weeks, wholesale price

index (WPI) based inflation rose to 4.95 per cent in the week ended

27


28/72


26 February, as against 4.85 per cent (a 9 month low) in the previous

week. The rise in the inflation level during the week was on account

of costlier manufactured items including edible oils. Also, the decline

in inflation in the corresponding week last year was responsible for a

base effect impact on inflation. After remaining above 6 per cent in

January and February 2004, WPI-based inflation had fallen to 5.21

per cent in the corresponding week last year.

Manufacturing inflation has not gone up at 4.2 per cent but inflation in

primary articles is at 1.7 per cent and primary food is at 3.1 per cent

during the week.

Inflation is expected to rise in march-may 2005, because of the low

base effect of last years inflation. In 2004-05, the government has

taken a number of steps, including cutting excise and customs duties

on certain products, raising the cash reserve ratio for banks and

allowing additional supply of sugar in the market in order to curb

inflation.

The rise in the index for manufactured product s was driven by a rise

in prices of food products.

Prices of rice bran oil rose 13 per cent, salt by 8 per cent, imported

edible oil by 3 per cent.

Government Policy

28


29/72


Reduction in corporate tax help although its accomplished by

decrease in the depreciation rates, as most companies in the FMCG

sector nave low asset base.

Five year tax holiday for new food processing units in fruits and

vegetable processing along with other benefits in budget 2004-05 has

bolstered the government resolution of encouraging growth in this

sector.

GDPThe GDP growth for the current year been projected at 6.9 %

outperforming the estimates of the economic agencies. The

agricultural production is expected to grow by a lower 1.1 % however

the fall in agricultural production will be made up by the higher

manufacturing growth of 8.9%.

ECONOMIC ANALYASIS OF IT

INDIAS STRENGTH IN IT SECTOR

Large growth potential

29


30/72


Increasing outsourcing trend

Export and global outsourcing will drive future growth

Leveraging India advantages

Rapidly improving infrastructure

Indian technology production companies have demonstrated

capabilities to compete in the global market.

Government Policy

The duty cuts on telecom hardware and fiber will have a minimum

impact.

The new fringe benefits tax has been introduced at the rate of 30 %

of a specified portion of various benefits. Its an irritant as its parable

by the employer.

NASSCOM, MAIT and other research firms such as IDC that suggest

that the industry could grow at CAGR of 40 % between now and

2008.

30


31/72


It is estimated that by March 2005 the IT industry will be worth a cool

$ 28.2 billion (RS 12080 crore) and the industry is expected to by 25-

30 % annually over the next year.

IT companies are happy at the importance given to the infrastructure

development by the government and the announcement that 7 million

jobs will be created by the IT sector 2009.

31


32/72


INDUSTRY ANALYASIS OF FMCG

AN-OVERVIEW

Fast moving consumer goods (FMCG) companies makers have

accelerated growth rate, both urban and rural markets, with small

towns driving growth in the markets. While the industry recorded an

annual growth in the of 3.4% in 2004, the quarter ended November,

2004 witnessed a growth of 6.2%. The top ten companies registered

sales of RS 33316 crore and the net profit is RS 3969 crore. TheFMCG major reported a 1% increase in its domestic FMCG sales to

2225 crore in the quarter ended December, 2004.

A part from these all the top ten companies give its best performance

sustained growth in net profit. In other way the HLL recorded a

growth higher than that of the industry average. While the ITC, nirma,

and nestle (I) success to hold its position in top.

In terms of the OPM (operating profit margin) its quite good

performance by nestle (I), ITC, and HLL and other way nirma, dabur

are just fall in compare to other companies in the industries.

FMCG majorITC glow again because its OPM improved significantly

to 36.9% and net profit continuously increase and reach to RS 1371

crore. While the nestle (I) sunshine performance in 2004 and OPM

improved 19.5%, net profit reaches to RS 206 crore.

32


33/72


The improve growth has encouraged companies like: HLL, dabur,

nirma, nestle, P&G to hike the price of detergent because of spiraling

inputs costs without fearing a negative impact. In calendar 2004

heavyweight categories like, biscuits grew by 9.9 % in volume terms,

shampoo by 7% and toothpastes by 7% while detergent grew 2.3%

for the quarter ended nov.2004 soaps grew by 5% against an

Annual growth of 1.3 % while biscuits grew by 11 % and shampoo

grew by 12 % with the very good monsoon in most of the part of the

country was helpful for Growth in the FMCG. But the effect of the

current Year monsoon and surcharge may prove injuries to the

tobacco companies well as increase the price of raw material is

expected to be realized in the subsequent quarter and mainly in the

next fiscal.

33


34/72


Factor affecting FMCG Industry

Product line

The most of the FMCG companies have shifted manufacturing

operation to tax-exemption Zones. On an average most companies

have cut advertising expenses, which seems to have been a focus

area for cost reduction.

Demand and supply conditionAccording to the analyst the innovation in the industry have been

more in 2004 across categories compared to the previous year. For

the sample operating profit ahs actually declined 3.4 % and margin

have fallen to 21.8 % from 23.9%.

Raw Material and higher input costs.

Prices of both liner alkyl benzene (LAB) and soda ash have been

firming up. Sugar and wheat flour prices key raw materials for food

companies, have been increasing sharply. The prices of veritable oils

declined during the quarter but were higher compared to the

corresponding quarter last year. Prices of some raw materials like

copra, safflower and sunflower have eased down. Milk prices have

started softening from 2005 and are expected to remain flat up to

Mar-apr 2004 but may witness some increase in the summer months.

34


35/72


Total raw material costs increased by 11% during the quarter due to

higher price of chemical and packaging material.

The higher depreciation tag also points to new plants being

commissioned. Thus, the profit growth of FMCG companies is being

driven largely by their core business and other income has ceased to

an important contributor to net profit margins. The improved growth

has encouraged companies like HLL and P & G to hike prices of

detergents following spiraling input costs without fearing a negative

impact on consumer demand.

35


36/72


INDUSTRY ANALYSIS OF IT

AN-OVERVIEW

The Indian software industry has grown rapidly since the 1980s, with

revenues increasing from less than $ 100 million in 1985-86 to nearly

$ 8.4 billion by 2000-01. During this period, exports grew even faster,

with their share increasing from less than a third to nearly three

quarters of revenues. This essay will analyze the domestic conditions

under which this export led industry has grown.

Although global demand for software, sustained by the PC,

networking and internet revolutions of the 1970s, the 1980s and the

1990s respectively, played an important role in facilitating the growth

of the Indian industry, it was also available to other countries. Indias

main software market, India is hardly unique in possessing such labor

force characteristics. Indeed, global demand and the availability of

high skill, low wage workface are necessary, but not sufficient

condition. If they were sufficient conditions, one must explain why

India failed to take similar advantage, unlike her East Asian

counterparts such as Taiwan, South Korea and increasingly China, of

the globalization of semiconductor design and manufacturing since

the 1960s. In other words, the growth of Indias software industry

must be explained in terms of how shifting domestic policy conditions

allowed her to take advantage of global demand and her labor force

36


37/72


characteristics to become, along with Israel, the leading software

exporter by the end of the millennium.

Important large software players such as Infosys Wipro, satyam

Computer Services managed to beat the market expectation and

continuously grow. The important thing is stay in top of the computer

software companys current ranking. Other big fishes Patni Computer

Systems, Emphasis BFL try to improve its position in industry and win

the confidence of investors.

Through the 107 large and small software companies managed to

see an improved sales growth in compare to just 34 companies are

under expectation and its near about 32%.

Out of all the 8 large computer software companies managed to see

an improved sales growth and reach to Rs. 15363.1 crore. Their

OPM have just increase from 26.2 % to 27.0 %.

Budget 2006 has all the ingredients for growing the domestic IT

market faster, the government focus on rationalization of custom duty

is positive step to stimulate domestic demand. The government

decision to hike teledensity across all villages by 2007 will positively

impact connectively, helping rural Indians to be part of the digital

revolution.

37


38/72


Industry Structure

The Indian software industry, a high growth sector, is fragmented,

with the top 10 Players accounting for less than 20 percent of the

total industry size in 2001. The IT Services industry is characterized

by players of varying sizes, providing solutions to Myriad verticals,

the Indian software and services industry had around 2,810

companies Operating within its domain.

The structure of the industry can be gauged from the followingtable:

Annual turnover No.of

companies

Above Rs.1000 crore 5Rs.500 crore- Rs. 1000 crore 5Rs.250 crore- Rs . 500 crore 15Rs.100 crore- Rs . 250 crore 27Rs.50 crore- Rs . 100 crore 55Rs.10 crore- Rs . 50 crore 220Below Rs. 10 crore 2,483(Sources : www.nasscom.org)

Sunrise Industry and the Growth for the Millennium

38
http://www.nasscom.org/http://www.nasscom.org/


39/72


A growth of 20.4 % in rupee terms and 28 % in dollar terms

in exports during 2003- 04

Achieved a CAGR of 30 % in turnover and 37 % in export

during last 5 tears.

IT exports likely to grow by 26-28 % in dollar terms during

2004-05.

Indian Industry Grow at over 32 % CAGR between 1999and 2004.

Key factors behind growth in exports are:

US IT investment boom

Onsite staff supplementation growth fuelled by major

technology waves

Offshore growth led by anchor MNC customers

New emerging service lines (R & D services, BPO)

Significant Strengths in R & D

39


40/72


175 of the Fortune 500 companies have R&D operation in

India

A vast network of state-owned national research

laboratories

Provides world-class support

IT R&D services currently account for more than 15 % of

totalIT exports.

Opportunity in Software Sector

YEAR 2008

Market

IT Service Export $28-30 bnSoftware products $ 8-11 bnIT Enabled Service $21-24 bnDomestic Market $13-15 bnTotal $70-80 bnExport $57-65 bn

(Sources : www.met.gov.in)

Strong Performance and Growth Potential

CAGR: 96-97 to 02-03: 24 % 02-03 to 08-09: 24 %

40
http://www.met.gov.in/http://www.met.gov.in/


41/72


By 2008, India will build a US $ 40 billion Electronics Hardware

Industry

IT industry by the year 2008 IT export 35 % of Indias Total Export in

2008 from 21.3 % during 2003-04 Share of IT Software & Services

Industry in GDP IT Export Likely to be 7 % of GDP in 2008 From 2.64

% of GDP during 2003-04

Company Analysis

FMCG COMPANIES

ABOUT HLL

41


42/72


Hindustan lever ltd is the subsidiary of unlived Plc. Which holds a

53% stake in the company? It is Indias largest FMCG Company, with

a dominant presence in almost all consumer categories. The

companys turnover at RS 100 bn is nearly half of the total branded

FMCG business in India. HLLs brand equity remains unrivalled in

India.

The company has a diversified portfolio with products ranging from

personal and household care to foods and beverages to specially

chemicals. The company has a commanding market share in most

classes it operates, such as toilet soaps, detergents, skincare, hair

care, color cosmetics, etc. It is also the leading player in food

products such as packaged tea, coffee, ice cream and other culinary

products. The company divested its non core business and has

focused on FMCG in recent years. The non-FMCG business now

contributes only 8% to its revenues.

The revival in the FMCG markets after two years of

decline should augur well for HLL achieving top line growth. This

coupled with the recent price hike should lead to marginal

improvement in margins. The new ventures of water and salon

business are still in their nascent stages. Therefore, any incremental

increase in profitability will be form the HPC and beverages business.

INTERPRITATION

The FMCG major reported a 1 % increase in its domestic FMCG

sales to Rs 2225 crore in the quarter ended Dec., 2004 and a 36%

decline in profit an after tax to Rs. 357.6 Crore in the same period.

42


43/72


Prices in three major product segment detergent, shampoo and

toothpaste in which HLL operates have been brought down. The

reason was competition but the effect was quick rise in volume and a

reduction in the volume promotion the company was offering. The

only category that seems to have done well is that of beverage where

both tea and coffee are doing much batter and sales have risen.

About Nirma Limited

In scorching heat of 1969, a son of small-time farmer was trying tomix Soda Ash and few other intermediaries, to make a detergent

produce. He was a qualified Science graduate and was working as

junior chemist in government laboratory. As a moonlighting activity,

he was making detergents in the 100 sq. ft back yard of his home,

using bare hands and bucket. Once the mixture is ready, he used to

pack them in polythene bag and was selling door-to-door. Gradually,

the product become well accepted in the consumer community, and

the rest is known to one and all this is a success saga of a first

generation entrepreneur, on his way to create history in the Indian

marketplace that was dr. karsanbahi Patel.

In a short span, he captured the domestic market, with a quality

product. He swiftly crafted low-to-medium consumer pockets a

whole new consumer segment for detergent category. He took on

mighty multi-nationals and rewrote the marketing rules. In true sense,

he spearheaded the market revolution by offering innovative, value-

43


44/72


for-money products, and changed the cloth-washing habit of Indian

housewives-the revolution called nirma

Nirma, the proverbial rags to riches saga of dr. karsanbahi Patel, is a

classic example of the success of Indian entrepreneurship in the face

of stiff competition. Starting as one-man operation in 1969, today, it

has about 14,000 employee-base annual turnover is above Rs 25, 00

crore.

In a short apan, nirma created an entirely new market segment in

domestic marketplace, which is, eventually the largest consumer

pocket and quickly emerged as dominating market player a position

it has never since relinquished.

The performance of Nirma during the decade of 1980s has been

lapelled as Marketing Miracle of an era. During this period, the

brand surged well ahead its nearest rival Surf, which was well

established detergent product by Hindustan Lever. It was a severing

battering for MNC as it records a sharp drop in its market value.

Nirma literally captured the market share by offering value based

marketing mix of four ps that is Perfect match of product, Price,

Place and Promotion.

IT COMPANIESDreamt by a diminytive gentlement from IIT Kanpur and cofounded by

six other bodies in pune, the company is the epitome of excellence

44


45/72


and still continuing dreamj run of Indian companies in market all over

the world.

Mr N.R. Narayanmurthy dreamt by delivering world-class software

from Indian to clients worldwide. Mr Murthy six other colleagues

including the current CEO Nandan Nilekani strated Infosys in 1981.

The decade still 1991 was through although Infosyss first

international; offices was opened in 1987 in USA. But in the early

nineties with liberalization of Indian economy. Infosys get the real

opportunity to grow globally . It grabbed the opportunity with alacrity

and never looked back since. Even during the last two years IT

meltdown, Infosys continued to grow.

It will be unrelieved by to Know that in 1991 after ten years in

existence , gross revenue of Infosys stood at a mere Rs 5 crore all of

ot of it came from really low-end piecemeal work. The suddenly the

company went public in 1992. The twelve year since have seen

Infosys growing from Rs 5 crore to Rs 3622 crore. And they have to

prove that shown how business should be done in India. In 1993, the

company heads its IPO of Rs 1.37 million shares at premium of rs

120.85. The fund was used to set up a new software development

facility at the Banglore city Financial Institution and Corporation.

Today more then 17000 employees in organization with rank no 1 the

Best Employer in Indian 2002 survey conducted by Hewitt

Associates for the Second consecutive year and first rank in

Business Worlds survey of Indias most respected Company.

45


46/72


This is Infosys. A faith that Indian also can make MNCs.

Infosys is the first Indian company to be listed on NASDAQ. Infosys

entered NASDAQ at $34 shooting up to an amazing $250 by the end

of the day.

For the future expansion , Infosys is focusing on financial products

and Avionics among other areas. The companys product-FINACLE is

an intergrated core banking solution which is centralized multi-

currency and multi lauguage enabled software.

INTERPRITATION

In the software Industry the Infosys Tech. Ltd Is big name and

its directly and indirectly. In 2003 the net sales of the company wae

Rs 362226.90 million and in 2002 it was Rs 26035.90 it is clearly

shown that companys net sales increase in 39.14% compare to the

last year. Equity Dividend Rate Was also increased to 400% to 540%

. The net profit of the company in 2003 also increased to 18.56%.

Abount Satyam Computer Service Ltd.

Satyam Computer Service Ltd (SCSL) is a leading global service

company , offering a wide a wide array of solution customized for a

46


47/72


key vertical and horizontals. From strategy consulting right through to

Implementing IT solution for customer , Satyam straddles the entire

IT space. It has excellent domin competencies in verticals such as

Automotive, Banking and Financial Service, Insurance and Helthcare,

Manufacturing , Telecom-Infrastructure-Media-Entertainment-

Semiconductors(TIMES). As a driverse end-to-end IT Solutions

provided, satyam offers a range of expertise aimed at helping

customers re-engineer and re-invent their business to compete

successfully customers ever-changing marktplace.

SCSL to report that the company has achieved Net Sales of Rs

20236.51 million in corporate to the one year before it was 17319.43

million . The company growth was driven by a double digit offshore

volume increase and stable prices. Revenue for quarter three in 2004

of Rs 891.26 crore was better than the guidencde of Rs 886 crore

EPS AT Rs 5.49 was highest than the guidance of Rs 5.47.

At Present , company have 372 active customer including 139

Fortune Globle 500 and forture US 500 corporations. Company

believe that the proporation of such customer to our total customer

base is one of the highest in the industy, reflectinthe strong brand.

Satyam has been ranked amongst the top 10 employers in India by

the CNBC.

INTERPRETATION

47


48/72


With customer IT Budgets expected to grow at a rate higher than last

year, the company believes that they are in a strong position to

garner a larger share of their IT spending . In light of the improved

prospects and better-than-expected performance for the current

year . Company revising revenue guidance upwards for fiscal 2005.

Company expectes revenue between Rs 3429 crore and Rs 3433

crore , implying an annual growth of Rs 34.9% to 35.1%.

48


49/72


CHAPTER -CHAPTER - 5

TECHNICINAL ANALYSIS OF FMCG & ITTECHNICINAL ANALYSIS OF FMCG & IT

COMPANIESCOMPANIES

49


50/72


FINANCIAL HIGHLIGHTS OF HLL

Year 2002 2003 2004

Gross Sales (Rs. Millions)

By segment % of Sale

11781 10952 11096

Soap ,Det Hou.hold care 40 45 44Per. Prod 21 22 24Food 33 30 29Cham. , Agri., Fer. 3 2 2

Others 3 1 1EBIT as % of Sales 14.0 17.6 18.4Fixed Assents Turn Over 8.9 8.3 8.1E.P.S of Rs. 1 @ 7.46 8.04 8.05D.P.S of Rs 1 @ 5.0 5.5 5.5PAT/Net Sales (%) 13.1 15.8 16.3R.O.C.E (%) 62.4 59.4 60.2R.O.N.W. (%) 53.9 48.4 82.8

INTERPRETATION

Looking at the growth pattern, the year 2001 was excellent , but year

2002 looks in is unfortunate for company because of poor economic

performance of country in that year but now FMCG company HLL

continuous grow and achieve its objective successfully. The

companys Gross Sales grow just 1 % in 2003. However PAT is

Continuous to grow regardless sales effect which sounds good for

company. The personal care product sales increase near about 9 %

in the year 2003. EPS of the company was just fall 0.01% in 2002

50


51/72


EPS increased in 0.58 %. RONW increase 82.8 5 to 48.4%, it means

71.07 % in year 2003.

HLL STOCK PRICE INDEX

INTERPRETATION

Hindustan Lever (HLL)s face value of the share Rs 1. The average

Capitalization of the company is Rs.32171 crore. The current price of

the one share is Rs 248. The average daily trading volume of share in

T+2 bases is 590955, the EPS of the 2003 is Rs 2.33 in Q2-2004 it

was decreased to Rs 40.36 % and again Q3-2004 it was decline to

Rs 0.66 but after that period now in company make profit and EPS

increase to Rs 1.42 it means increase in 115.15% in last quarter in

2004. The FII holding in company because FII play vital role in the

market and continuously buying the share.

NIRMA FINANCIAL HIGHLIGHTS

(Rs Millions)

PARTICULARS 2004 2003 2002

Sales 22,067.20 20,505.50 19302.00Stock Adjustment 113.00 213.00 165.10Raw Material Consumed 12,387.60 11,571.20 10,709.70

51


52/72


Power And Fuel 1,812.10 1,795.60 0.00Employee Expenses 409.90 410.30 376.60Other Expenses 1,841.30 1,614.60 3,065.80Total Expenses 16,563.90 15,604.80 14,317.20

Operating Profit 5,503.30 4900.70 4984.80Other Income 260.90 239.60 183.90Total Interest 438.20 559.10 1,057.30Net Depreciation 1,555.70 1,250.30 1222.90Tax 1320.30 1038.60 1036.80Net Profit/Loss 2468.00 2292.30 1853.70Extra Ordinary item 0.00 -139.80 0.00Prior Year Adjustment 0.00 0.00 -6.60Adjustment Net Profit/Loss 2468.00 2152.50 1847.10Equity Capital 793.80 793.80 793.80EPS (Rupees) 31.09 27.12 23.27Equity Dividend Rate (%) 40.00 0.00 35.00OPM (%) 24.93 23.89 25.82NPM (%) 11.18 10.49 9.56

INTERPRETATION

From the above companys sales in RS 22067.20 millions in 2004,Last year it was Rs 20505.50 millions. The Increase in compare to

last year is 7.61 %. The total expenses of the company are increase

6.15 % in 2004 in compare to the next year. The total net profit of the

company is 2468.00 millions it is increase to 14.66%. The EPS of the

company is increase to Rs 3.97 in 2004. So we are see that in future

the companys net Profit is increase with the same the EPS Rate is

also increases and investor get more benefit from the company.

NIRMA LTD. STOCK PRICE INDEX

52


53/72


INTERPRETATION

Nirma ltd was value of the share is Rs 10. The average Capitalization

of the company is Rs 2658.83 crore. The current price of the one

share is 344.95. The average daily trading volume of share in T+2

bases and it is 2993, the difference of the one year 128 points. EPS

of the Q1-2004 was Rs 8.31 in Q-3-2004 it was Rs 5.73 it means

decrease in 45.02 % during six months. The Beta of the company is

0.29. Looking at the graph pattern stock look very range bound and

as FMCG entertaining rural market, Nirma share has high potential to

grow.

53


54/72


Dabur Financial Highlight

(Rs. Millions)

PARTICULARS 2004 2003 2002

Sales 11,479.80 12,323.00 11,631.90Stock Adjustment 257.80 35.90 -168.60Raw Material Consumed 2,147.80 2,328.40 2,234.70Power And Fuel 0.00 0.00 0.00Employee Expenses 703.10 882.60 774.60Admin And Selling

Expenses

1,549.50 1,549.40 0.00

Other Expenses 5,571.20 6,263.20 7,725.40Total Expenses 10,229.40 11,059.50 10,566.10

Operating Profit 1,250.40 1,263.50 1,065.80Other Income 110.50 83.00 138.70Total interest 69.00 170.80 239.50Net depreciation 157.50 220.40 209.90Tax 122.40 104.30 110.70Net Profit/Loss 1,012.00 851.00 644.40Extra ordinary item 0.00 0.00 0.00Prior Year Adjustments 0.00 0.00 0.00Adjusted Net Profit/Loss 1,012.00 851.00 644.40

Equity capital 286.20 285.70 285.60EPS(Rupees) 3.54 2.98 2.26Equity Dividend Rate (%) 200.00 140.00 0.00OPM (%) 10.89 10.25 9.16NPM (%) 8.81 6.90 5.53

INTERPRETATION

From above financial performance we can see that the sales of thecompany decrease of Rs. 11479.8millions Due to very sharp

competitive market. The sales decrease by 6.85% as compare to the

text year. The EPS of the Company in 2004 increase Rs.3054. Even

though the company sales decline the other side the companys EPS

54


55/72


56/72


4.57%. The beta of the company is 0.54.Sine 6-04 stock has long ball

run e.g. share is steadily growing which show good prospects of

company in market.

INFOSYS FINANCIAL HIGHLIGHT

(Rs. Millions)

PARTICULAR 2003 2002 2001

Sales 36,226.90 26,035.90 19,005.60Stock Adjustment 0.00 0.00 0.00Raw Material Consumed 0.00 0.00 0.00Employee Expenses 16,771.20 11,178.70 0.00

56


57/72


Admin And Selling

Expenses

5,373.50 3,441.40 2,648.90

Other Expenses 1,361.80 1,069.50 8,708.30Total Expenses 23,744.20 15,659.60 11,510.10

Operating Profit 12,482.70 10,376.30 7,495.50Other income 996.10 664.10 593.70Total interest 0.00 0.00 0.00Net depreciation 1,889.50 1,606.50 1,128.90Tax 2,010.00 1,354.30 727.10Net Profit/Loss 9,579.30 8,079.60 6,233.20Extra ordinary item 0.00 0.00 54.90Adjusted Net Profit/Loss 9,579.30 8,079.60 6,288.10Equity capital 331.20 330.90 330.80

EPS(Rupees) 144.62 122.09 95.04Equity Dividend Rate (%) 540.00 400.00 200.00OPM (%) 34.45 39.85 39.43NPM (%) 26.24 31.03 33.08INTERPRETATION

From the above financial Performance the company s sales

increase to Rs. 36226.9 millions in 2004 which shows net addition

Rs. 10191 mn, last year it was increase top Rs.70303 millions. The

company s net profit reached to Rs. 9579.3 millions in 2004.The EPE

of the company in 2003 was 144.62.The future of the company

looking good because it care the investors and regularly give the

dividend to the holder.

INFOSYS TECH. STOCK PRICE INDEX

57


58/72


(Sources: www. Indiainfoline.com)

INTERPRETATION

Infosys Teach. Face value of the share is RS. 5. The average

Capitalization of the company is RS.58775.14 crore. The Current

price of the one share is RS.2960. The average daily trading volume

of shares in T+2 bases and it is 158340, The EPS of the Q1-2004

was increase RS.2.16 Q4 -2004 it was increasing sharply RS.5.97, it

means after nine months The EPS increasing 47.23 %. Total share

issued by the company is 41.75% it is crucial for the company

because the FLL continue played role in market and buying the share

of the company so that ultimately price of the share increase And the

investors get the benefit of that buzzing.

58


59/72


60/72


EPS (rupees) 9.77 14.29 17.29Equity dividend rate (%) 150.00 60.00 0.00OPM (%) 30.56 33.55 3.47NPM (%) 15.19 25.94 39.86

(Sources: www.indiainfoline.com)

INTERPRETATION

From above financial performance we can see that the sales of the

company grow in 2004 of Rs.2917.08 millions. The sales grew 17.84

% as compare to the previous year. The EPS of the company in

decline Rs. 4.52 in compare to 2002.it just because of ESP was

decreased sharply over 32% despite sales growth of 17%.

SATYAM COM.LTD.STOCK PRICE INDEX

60
http://www.indiainfoline.com/http://www.indiainfoline.com/


61/72


62/72


FINANCIAL HIGHLIGHTS OF WIPRO LTD.

(Rs. Millions)

PARTICULARS 2004 2003 2002SALES 51,685.00 40,327.00 34,677.00

Stock Adjustment 0.00 0.00 0.00Raw Material

Consumed

8,209.00 7,243.00 7,896.00

Employee Expenses 20,495.00 6,424.00 5,084.00Admin And Selling

Expenses

7,223.00 5,506.00 4,211.00

Other Expenses 4,296.00 10,844.00 7,412.00Total interest 35.00 29.00 29.00

Net depreciation 1,516.00 1,380.00 1,419.00Tax 1,674.00 1,211.00 840.00Net Profit/Loss 9,149.00 8,395.00 8,661.00Extra ordinary item 0.00 0.00 0.00Adjusted Net

Profit/Loss

9,149.00 8,395.00 8,661.00

Equity capital 1,398.00 465.00 465.00EPS(Rupees) 13.09 34.98 37.25Equity Dividend Rate

(%)

1,450.00 50.00 50.00

OPM (%) 22.17 25.56 29.05NPM (%) 17.70 20.16 24.97(Sources: www.indianinfoline.com)

INTERPRETATION

62
http://www.indianinfoline.com/http://www.indianinfoline.com/


63/72


From above financial performance we can see that the sales of the

company grow in 2004 of Rs.51685 millions. The net sales grew

28.16%as compare to next year. The EPS of the company in 2004

decline Rs.21.89. The company is habited to put good growth in its

financial statement because of its well diversified product portfolio

e.g. from Agriculture to IT.

WIPRO LTD. STOCK PRICE INDEX

(SOURCES: www.Indiainfoline.Com)

63
http://www.indiainfolune.com/http://www.indiainfolune.com/http://www.indiainfolune.com/


64/72


INTERPRETATION

Wipro Ltd. Share faces value of Rs. 10. The average

Capitalization Of the company is Rs.4824.38 crore. The

current price of the one share is Rs 541.The average daily

trading volume of shares in T+2 bases and it is 124208, the

EPS of the Ql-2004 was Rs. 3.68 in Q2-2004 it was increase to

21.20 % and again Q3-2004 it was increase to Rs.5.59 it

means 25.33 % increase compare to last quarter but after that

period now company's EPS decrease to Rs. 0.88. The FII

holding in company is 11.25 %.

64


65/72


CHAPTER CHAPTER 6FINDINGS & LIMITATIONFINDINGS & LIMITATION

FMGC INDUSTRY

65


66/72


With two successive years of under Performance there

emerges an element of circumspection while building expectations

for 2005. Nevertheless, we believe that the pricing environment is

gradually improving for detergent companies.

While the companies suffered in terms of profitability, the price

war did manage to grow volumes in these categories. The

companies continue to attack costs by either relocating to tax free

zones or looking at various productivity improvement measures.

Another important development that took place in 2004 wasthat most FMCG majors undertook capacity expansion plans. This

has not happened over the past 5 to 7 years. It does point to

improved demand expectation by the sector majors.

For investors, a key thing to note is that with markets at all time

highs and interest rates looking to strengthen, the equity risk profile

has increased over the short term. In such a scenario, FMCG is likely

to be a good defensive bet. More importantly, expectations of a

demand revival are not factored into most forward projections.

It is a given that the consuming class pie in India is growing.

While consumer durables and housing have clearly taken a front

seat in the mirror the GDP growth trend over the long term. The

environment will no doubt, continue to be competitive, but volume

growth may more than make up for it for stronger companies.

FINDINGS FORMOTILAL OSWAL

66


67/72


In Motilal Oswal the computers which is installed by company is

very old so that speed of the computer is very less that's why

the work load of staff is continuous increase.

The facility which is provided by to client is excellent and it is

found that in annual meeting of broker there is no complaints

was registered by anyone.

LIMITATION

This project report is prepared for limited two months period. This project is concerned with only five companies of both the

Sectors e.g., FMCG & IT.

Scripts Analysis of this report considers the price fluctuation of

Price only one year.

Financial data are considered on the base of just last three

Years information. Whatever assumptions have been taken for scrip analysis may

differ from actual result.

Market is ultimately driven by sentiments of investors, so even

Good story suggested in report May not work in market.

67


68/72

CHAPTER CHAPTER 7

SUGGESTIONSUGGESTION


69/72

SUGGESTIONS FOR MOTILAL OSWAL

There should be reducing wastage of manpower and also office appliance

There should be given proper attention of the brokers and other Sta

member's problem and try to reduce it immediately.

There is no proper department head for watching the activity of the Broke

and staff member so keep one head for monitoring the Activity.

There should be reducing wastage of manpower and also office appliance

There should be given proper attention of the brokers and other Sta

member's problem and try to reduce it immediately.

There is no proper department head for watching the activity of the Broke

and staff member so keep one head for monitoring the Activity.


70/72

SUGGESTION FOR INVESTORS

The investor should be clear in his objectives of income, capita

Appreciation, short-term or long-term gains etc.

The success of investors depends on personal preparation, hard Wor

involved in the collection of relevant information, Knowledge and researc

and analysis.

After sufficient study and preparation, the investor should act like Rag

pickers in the market, picking up scrip on a selective basis.

Investors should as far as possible deal with registered members o

recognized stock exchanges.

Investors should examine carefully the detailed prospectus befor

Subscribing to the new issue of companies.


71/72

CHAPTER CHAPTER 8

BIBILIOGRAPHYBIBILIOGRAPHY


72/72

BIBILIOGRAPHY

BOOKS

Prof.V.Gangadhar,Investment Management,1st Edition

V.K.Bhalla, Investment Management,10th Edition

Magazines & News Papers

Capital Market-2005

Economic Times

Financial Express

Websites

www.indiainfoline.com

www.nseindia.com

www.met.gov.in

www.nasscom.com
http://www.indiainfoline.com/http://www.nseindia.com/http://www.met.gov.in/http://www.nasscom.com/http://www.indiainfoline.com/http://www.nseindia.com/http://www.met.gov.in/http://www.nasscom.com/

Documents

Fundamental Analysis of Scrips & Sector