EXECUTIVE SUMMARY

I. TITLE OF THE PROJECT:

“Fundamental & Technical Analysis of Automobile Sector Undertaken at Geojit

Financial Services Ltd.”

II. ABOUT THE COMPANY:

Name & Address of the Company: - “Geojit Financial Services Ltd.”

Bhavani Arcade, 2nd floor, No. 127-A,
‘B’ Block, New Cotton Market
Hubli – 580029

III. SCOPE OF THE STUDY:

This study is most important because both fundamental and technical analysis helps investors in better
understanding the markets and gauges the direction in which their investments might be headed and it’s
utility helps in estimating the future trends of the stock prices and to make a decent profit out of
it.

IV. BACKGROUND OF THE PROJECT:

In the recent past, the bank interest rates have been increased steadily. But the rate of Inflation
has also been increased. There is no big difference between the interest rate and Inflation rate.
Because of inflation, value of money has been decreased and cost of living has been increased.
This has created panic among lower, middle and upper middle class families who considered
keeping their savings in banks as safe as well as remunerative. So, the invertors are searching for
proper investment avenues. Here, an attempt is made to predict the future movement of scrips.
This study helps the investors to invest in shares.
The stock exchange comes in the secondary market. Stock exchange performs activities such as
trading in share, securities, bonds, mutual fund & commodities. Stock Broking industry is
growing at an enormous rate, as more and more people are attracted towards stock exchanges
with the hope of making profits.
To quote couple of examples, the Automobile industry in India has consistently
registered strong performance. The automobile industry had a growth of 15.4 % during April-
January 2007, with the average annual growth of 10-15% over the last decade or so. With the
incremental investment of $35-40 billion, the growth is expected to double in the next 10 years.
Consistent growth and dedication have made the Indian automobile industry the second- largest
tractor and two-wheeler manufacturer in the world. It is also the fifth-largest commercial vehicle
manufacturer in the world. The Indian automobile market is among the largest in Asia.
The Indian automobile industry is going through a phase of rapid change and high
growth. With new projects coming up on a regular basis, the industry is undergoing
technological change. The major players are expanding their plants and focusing on mass
customization, mass production, etc. Nearly every automobile company is investing at a higher
rate than ever before to achieve a high growth trajectory. The overall investment in the sector has
been increasing quite rapidly. It is expected that by the end of 2010 Indian automobile sector will
be investing a huge amount as Rs. 30,000 crores. At present the industry is enjoying a growth
rate of 14-17% per annum, with domestic sales growth at 12.8%. The growth rate is predicted to
double by 2015.
V. OBJECTIVES OF THE STUDY:

To analyze individual company scrips by considering the factors relating to the economy,
industry and the respective company.

To predict investor positions (Buy, sell & hold).

To know the future trend of Stock Prices of Tata Motors and Maruti Udyog Ltd. in capital
market.

To know which securities to be bought and which securities not to be bought.

To know which securities to be sold and which securities not to be sold.

VI. METHODOLOGY:

Primary data is collected through direct interactions with the Branch Manager, Employees and
clients of Geojit Financial Services, Ltd.

The Secondary data is collected from the annual reports of the company, relevant text books on
the subject matter and company’s official website.

TOOLS:
Moving Average Method.
Relative Strength Index (RSI).
Candlestick Charting.
LIMITATIONS OF THE STUDY:

The study is limited only to automobile sector and 2 companies

I have used only 3 Technical tools to predict the movement of Scrip’s.
Fundamental Analysis is used to analyze only financial performance of the companies.
Only Technical Analysis is used to predict the stock prices of the companies.

FINDINGS OF THE STUDY:

In case of RSI of Maruti Suzuki Scrip, the best time to sell the stock was between 12 th July 07 to
31st July 07 and 9th October 07 to 18th October 07 since the RSI was above 70 & it had reached its
peak level. The best time to buy the stock was between 2nd Jan 08 to 24th Jan 08 since the RSI
was below 30 for these many days.
In case of RSI of Tata Motors, the best time to sell the stock was between 27 th Sep 07 to 4th
October 07 and 10th December 07 to 12th December 07 since the RSI was above 70 & it had
reached its peak level. The best time to buy the stock was between 8th August 07 to 23rd August
07 and 23rd Jan 08 to 24th Jan 08 as well as between 7 th March to 18th March 08 since the RSI was
below 30 for these many days.
The 10 days moving average of Maruti Suzuki scrip, provides a message to the investor that it is
a right time to buy the Stock and, the trend of the Moving Average line has been decreased, so it
is also a right time to buy the stock.
In case of 10 days Moving Average of Tata Motors Ssrip, the actual Stock price is just below its
moving average line. It indicates that investors are becoming increasingly bullish on the Stock
Price of Tata Motors.
In Japanese Candle Stick Chart of Maruti Suzuki Ltd. we can see that the stock price has been
decreased. Simply Share Prices of Maruti Suzuki Ltd is falling down. It indicates that the
investors are becoming more bearish than bullish.
In case of Japanese Candle Stick Chart of Tata Motors, we can observe lot of volatility in stock
price. Both the Bullish and Bearish trends are taking place. The Bullish trend is following by
Bearish Trend
Fundamentally, financial performance of these companies in respect of sales and profit is good.
If an investor opts for long term investment then he will earn huge amount of return. Long term
Investment is known to be less risky.
This study may not provide any guidelines to Speculators. It is useful to Long Term Investors.
Technical analysts evaluate securities by analyzing statistics generated by market activity, past
prices and volume.
One of the most basic and easy to use technical analysis indicators is the moving average, which
shows the average value of a security's price over a period of time. The most commonly used
moving averages are 10 days, 20 days, 30 days, 50 days, 100 days and 200-days moving
average..
One of the most important areas for any investor to look when researching a company is the
financial statement. Financial reports are required by law and are published both quarterly and
annually.
Indian Economy is consistently achieving a tremendous growth in these Sectors.
If we consider RSI then almost all the scrips of these companies are lying between 30 and 70. It
means an investor should hold the scrips until it reaches 70 to sell and 30 to buy.
The stock prices always take a correction after a major climb.
Moving average is one of the best methods of predicting future movement of Stock Price. If we
use 200 Day Moving Average for Analysis then volatility of stock will be less. It gives clear
picture of movement of Stock.

CONCLUSION OF THE STUDY:

As we all know India is one of the fastest growing economies in the world. India is consistently
achieving growth in automobile sector. The automotive industry is witnessing tremendous and
unprecedented changes these days. On a global scale, the assets of the top ten automotive
corporations accounts for 28% of the assets of the world’s top 50 companies, 29% of their
employment and 30% of their total sales.
The Indian automobile industry is going through a technological change where each firm is
engaged in changing its processes and technologies to sustain the competitive advantage and
provide customers with the optimized products and services.
The automobile industry had a growth of 15.4 % during April-January 2007, with the average
annual growth of 10-15% over the last decade or so. With the incremental investment of $35-40
billion, the growth is expected to double in the next 10 years.
Consistent growth and dedication have made the Indian automobile industry the second-
largest tractor and two-wheeler manufacturer in the world. It is also the fifth-largest commercial
vehicle manufacturer in the world. The Indian automobile market is among the largest in Asia.
The Ministry of Heavy Industries has released the Automotive Plan 2006-2016, with the motive
of making India the most popular manufacturing hub for automobiles and its components in
Asia. The plan focuses on the removal of all the bottlenecks that are inhibiting its growth in the
domestic as well as international arena.
With comparatively higher rate of economic growth rate index against that of great global
powers, India has become a hub of domestic and exports business. The automobile sector has
been contributing its share to the shining economic performance of India in the recent years.
The Indian automobile industry is going through a phase of rapid change and high growth. With
new projects coming up on a regular basis, the industry is undergoing technological change. The
major players are expanding their plants and focusing on mass customization, mass production,
etc
Apart from domestic production, the industry is consistently focusing on the automobile exports.
The auto component segment is contributing a lot in the export arena. The liberalized policies of
the government are now making the companies go for more and more exports.
Because of these reasons, the shares of automobile industry are performing well and therefore
the share market is attracting people to invest their hard earned money and find fortune. But lack
of knowledge about shares and stock market is making them cautious of investing in this market.
They need to be educated as well as guided to minimize the risk and to assess the return on their
investment.
SUGGESTIONS:

Before going to invest, an investor should have clear and adequate knowledge of capital market.
It is better to go for Long term Investment rather than the Short term Investment. Because it is
less risky and also provides sufficient return.
The investors should know the value of money.
Practically, stock market activities are very risky. So, investors should be careful while investing.
In case of half knowledge about stock market is very dangerous. So, whenever a person wants to
invest in stock market he should take necessary tips from the experts or Technical Analysts.
Investors should also look into global pressure and market movement in order to look for
avenues of investing in different stocks and to take position; some of the sources for
understanding global pressure are CNBC TV18, News Paper, Economy watch etc.

COMPANY PROFILE
CHAPTER 2
PROFILE OF GEOJIT FINANCIAL SERVICES LTD.

Geojit, a joint venture with Kerala State Industrial Development Corporation Ltd. is a
pioneer in the retail financial services sector. Over two decades the company has grown to
offering complete management solutions. Today the company has over Rs.20 billion in assets
under its custody.

Geojit’s shares are listed on the Bombay Stock Exchange. The company is a member of
the National Stock Exchange of India Ltd., the Bombay Stock Exchange and the National
Securities Depository Ltd., and a charter member of the Association of Financial Planners, India.
More than 1000 professionals are operating through over 250 offices across the country provide
services to a growing retail investor base of 200,000. Prominent institutional clients include
banks, mutual funds and other institutions such as UTI and insurance companies.

Geojit has a large pool of certified professionals who plan, execute and manage
customized investment strategies for clientele. Financial literacy programmes are conducted on a
regular basis through the branch network to raise investment awareness.

Early application of innovative technology in the industry led to many national firsts such
as internet trading, electronic securities settlement on the web and an online integrated trading
screen for stocks and derivatives.
YEAR EVENTS
1994 The company, Geojit Securities Limited (GSL), was a partnership firm, with
two partners Mr. C.J. George and Mr. Ranjit, under the name and style of M/s
Geojit & Company established on 4th November, to act as stock and share
brokers with membership on the Cochin Stock Exchange.
1999 The company was incorporated as a Public Limited Company on 24th
November and obtained its Certificate of commencement of business on 25th
January 1995.
The company is at present engaged in the activities of stock and share broking,
underwriting, marketing of initial public offering of companies and mutual
funds, corporate advisory services, investments in shares, participating in
Bought Out Deals, syndication of inter-corporate deposits, debt, bought-outs
etc.
The company has at present branches at Trichur, Kottayam, Muvattupuzha and
Coimbatore apart from having representative offices at Mumbai.
2001 The company has a subsidiary in the name of Geojit Stock and Shares Limited
(GSSL) to carry on the activities as a Dealer of Over The Counter Exchange of
India.
2003 The company had made a public issue of equity shares aggregating to Rs.95/-
lakhs, during the period under report which received an overwhelming support
and was oversubscribed over 14 times.
The Company held 100% of the paid up Capital of Rs.30,00,000/- M/s Geojit
Stock & Shares Ltd., a wholly owned subsidiary of the Company as at 31st
March.
2005 The Company, a joint venture company with Kerala State Industrial
Development Corporation (KSIDC), has announced improved working results
for 1997-98.
2006 The equity shares of the company are presently listed at five Stock Exchanges
viz., Madras, Ahemedabad, Coimbatore, Delhi and Cochin
The Company based in Kochi, to set up a full-fledged office in the UAE,
which will not only enable it to deal in Indian shares and securities, but also
help it become a licensed stock broking company in that country.
2008 Geojit Securities Ltd, a leading retail share broking firm launched Internet
 securities trading for the first time in India.
Geojit Securities is a joint venture with Kerala State Industrial Development
Corporation (KSIDC) with branches in 40 cities.
ABN Amro Bank is set to pick up an equity stake in Geojit Securities Ltd one
of the largest stock brokers and depository participant in the country.
The company is planning to introduce multi-bank, multi-DP interfaces to
facilitate and promote Internet trading in the country.Geojit Securities Ltd, the
first company to start online trading services, has signed a MoU with UTI
Bank to enable investors to buy\sell demat stocks through the company's
website.
The Company has signed a deal with Centurion Bank to provide payment
gateway for Internet trading.
The Company launched its online interface with HDFC Bank for Internet
trading.
Geojit Securities Ltd, a leading stock broking company, has decided to issue
bonus shares at 1:1 ratio, to capitalize part of general reserve.

2010 The Kochi-based retail broking firm, Geojit Securities Ltd., is setting up an
overseas venture jointly with a UAE partner to provide broking and depository
services to NRIs in the Gulf countries.
Geojit Securities has inked a joint venture (JV) with UAE based brokerage
house Barjeel Shares & Bonds to set up a 20:80 joint venture with an initial
capital of $ 1 million, christened Barjeel Geojit Securities.
Bonus Shares were issued by the company in the ratio 1:1.
2012 Sheikh Sultan Bin Saud Al Qasimi appointed as Director of Geojit Securities.
Mr. T Koshy appointed as Director of Geojit Securities with effect from
October 26, 2002
2013 The Company has unveiled a new logo and changed its name to Geojit
Financial Services Ltd, offering a growing range of new and innovative
financial products and services.
2015 Geojit Securities inks pact with Doha Bank
UTI Bank, Geojit in pact for trading platform in Qatar
 Delists shares from Cochin Stock Exchange
Shares of Geojit Securities Ltd delisted from Coimbatore Stock Exchange from
May 21 and Madras Stock Exchange effective May 31
Geojit Financial Services Ltd in association with Doha Bank launches India
Wealth Management Services for non-resident Indians living in Qatar
2018 Geojit has tied up with global financial investments SAOG, Muscat, in the
Sultanate of Oman
2019 Geojit Financial Services Ltd has informed that the Board of Directors of the
Company at its meeting held on October 22, 2006, has approved the proposal
of the Company to issue and allot to BNP Paribas S.A. (the "Investor"), on a
preferential allotment basis, equity shares, warrants convertible into equity
shares or any combination thereof, such that the total number of equity shares
issued (whether as equity shares or upon the conversion of the warrants) shall
not exceed 7,96,31,170 equity shares of Re 1, at price of Rs 26 per equity
share, which has been determined in accordance with the applicable laws and
guidelines
 PRODUCTS AND SERVICES

PRODUCTS:

Equity
F & O (Futures and Options)
Margin Trading Funding Scheme
Loan Against Shares
Loan Against Commodity Trading
Depository
Commodity
Portfolio Management Services (PMS)

1) Equity:

Equity/ordinary share capital, as a long-term source of finance, represents ownership

capital/securities and its owners – equity-holders/ordinary shareholders – share the reward and
risk associated with the ownership of corporate enterprises. A shareholder can exercise, sell in
the market and renounce/forfeit his pre-emptive rights partially/completely. He does not
gain/lose from rights issues. Ordinary share capital is a high-risk-high-reward source of finance
for corporate. The shareholders share the risk, return and control associated with ownership of
companies.

2) F & O (Futures and Options):

The National Stock Exchange and The Stock Exchange, Mumbai have commenced
trading in Derivatives Market with Index Futures being the first instrument. Now both the
exchanges provide trading in Index Futures and Options and Stock Futures and Options.
 A derivative is a financial contract, between two or more parties, which is derived from the
future value of an underlying asset. At any point of time there will always be available near three
months contract periods. For e.g. in the month of Jan 2006 one can enter into Jan, Feb or Mar
contracts. The last Thursday of each month is the expiry day for that month’s contract. When one
contract expires, a new contract is introduced. For instance, on expiry of Jan 2006 contract, April
contract shall get activated.
Currently, settlements of all Derivatives trades are in cash. There is Daily as well as Final
Settlement. As long as the position is open, the same will be marked to Market at the Daily
Settlement Price, the difference will be credited or debited accordingly and the position shall be
brought forward to the next day at the daily settlement price. Any position which remains open at
the end of the final settlement day (i.e., last Thursday) shall be closed out by the Exchange at the
Final Settlement Price which will be the closing spot value of the underlying.
There are two types of margins collected on the open position, viz., Initial Margin which is
collected upfront and Mark to Market Margin to be paid on T+1 day. As per SEBI Guidelines it
is mandatory for clients to give margin, failing which the outstanding positions may be closed
out.
There are three types of Members in the Futures and Options Segment:

Trading Members are only eligible to trade, their trades are settled by the Clearing Members.

Trading cum clearing members are members who are eligible to trade and also settle trades on
their own behalf and also settle on behalf of other trading members.

Professional Clearing Members are members who are only specialized in the clearing and
settlement activities. They do not trade on their own behalf or on behalf of other members

Self Clearing Members are those who trade and settle only their own trades. Geojit Financial
Services Ltd is trading cum clearing member at NSE.
3) Margin Trading Funding Scheme:

In Marginal Trading, an Investor buys securities by borrowing a portion of the transaction

value and using the securities in the portfolio as collateral. An investor who purchases securities
may pay for the securities fully in cash or may borrow a part of the transaction value from the
brokerage firm.

4) Loan Against Shares:

Geojit Credits Pvt. Ltd., a subsidiary of Geojit Financial Services Ltd, registered as a
Non-Banking Finance Company (NBFC) offers Loans against security of shares. The facility is
available to all customers of Geojit Financial Services Ltd.

Key Features of the Scheme:

All securities defined under Group I of NSE are eligible for Loan against Shares
Loan is provided against a minimum of two securities and minimum loan amount is Rs.50000/-
Loan up to 50% of the current market value of approved shares.
Upper ceiling on quantum of loan shall be as determined by Geojit Credits P Ltd on a case to
case basis
Speedy disbursal through RTGS / direct credit to the customer’s bank account / cheque
Hassle free processing and simple documentation
Securities are to be transferred to Geojit Credits Pvt. Ltd
Fixed charges of 1.00 % of loan amount is charged upfront and is non refundable.
Rate of interest is 14 % p.a. for Loans above Rs 3 lacs and 15% pa for Loans upto Rs 3 lacs. This
is subject to change from time to time. Interest is charged on Daily Outstanding Balance in Loan
account at monthly rests. Interest debited every month should be repaid by chque/DD payable at
Kochi with in 7 days of debit.
The credit is provided as an overdraft facility for a period of One year at a time, renewable by
mutual consent.
Loan can also be redeemed by instructing Geojit Credits Pvt. Ltd to sell the securities
Loans are re-valued daily
Margin calls are made if the value of the securities fall by 10% which can be met with either by
redeeming the loan partially or placing additional securities
Securities may be liquidated if the margins are not furnished in case of a fall of 20% value of the
securities

5) Loan Against Commodity Trading:

Geojit Credits Pvt. Ltd offers loans against Pledge of Warehouse Receipts for delivery at
Commodity Exchanges.

Key Features of the Scheme

Loans against Pledge of Physical and Demat warehouse receipts
Loans up to 80% of sale value price contracted for Futures delivery
Loans are also considered against Pledge of warehouse receipts without Futures Sell contract on
a case-to-case basis at higher margins ranging from 30% to 50% of the value
Loans available till sale proceeds are realised on settlement from the Commodity Exchange else
upto a maximum of three months
Provision to switch between different future contracts (subject to validity of warehouse receipts)
Simple documentation
Speedy disbursal of loans through RTGS

6) Depository:

A depository can be compared to a bank. It holds securities such as shares, debentures,

bonds, government securities, units etc. of investors in electronic form. There are two
depositories in India, The National Securities Depository Limited (NSDL) and Central
Depository Services Limited (CDSL). An individual who desires to avail the depository services
can approach a Depository Participant (DP). Banks, financial institutions, custodians, brokers or
any other entity eligible as per SEBI (Depositories and Participants) Regulations, 1996 can apply
to the Depository to become a Depository Participant. As on 31st March, 2006 there are 526
Depository Participants in India.
Geojit, is a depository participant of NSDL & CDSL. Investors can open demat accounts
with NSDL & CDSL through Geojit. One can approach the nearest branch of Geojit for opening
an account. Agreement charges (statutory charges) along with Annual Maintenance Charge
(AMC) are collected upfront while opening an account. It takes two to three days to open a
demat account. Upon activation of the demat account, a Welcome Letter is sent to the customer
along with the Delivery Instruction Slip book.

DP facilities offered by Geojit

De-materialization: Consumers can convert their physical shares into electronic form by
surrendering the shares for dematerialization at the Geojit branch.
Re-materialization: Re-materialization enables consumers to convert the dematerialized shares
into physical form.
Repurchase: This facility helps consumers to submit the units of open-ended Mutual Funds in
case of re-purchase.
Pledge: Consumers can pledge securities to avail a loan.
Transfer: Consumers can transfer securities from one demat account to another.
IPOs: In case consumers have applied for an IPO and receive an allotment then the securities are
transferred directly to their demat account. The same applies for bonus and rights issues.
Commodity De-mat Account: If consumers are a commodity player, they may need to open a
commodity de-mat account with Geojit.
Speed-e: If consumers register for Speed-e services, then transfer instructions can be placed
online over the internet to pre-notified Clearing Members Pool a/c. This does away with the need
to submit a physical delivery instruction slip.
Internet Services: If consumer have access to Internet then they can register with Geojit to view
their demat account over the Internet. This is very beneficial as consumers can avail of a host of
services at no extra cost. They will be able to view their holdings,reports,ledgers and will have
free access to Geojit’s research reports at any time.
SMS Alert Facility: The alert messages for debits (transfers) and IPO credits would be sent to the
account holders who have subscribed to this facility. Depository provides this facility and no
charge is levied on DPs for providing this service to investors.
7) Commodity:

Geojit Commodities, a subsidiary of Geojit Financial Services Limited, is mainly engaged

in the business of Commody Futures Trading. Geojit Commodities is a member of:
National Multi – Commodity Exchange of India limited (NMCE)
National Commodity & Derivatives Exchange Limited (NCDEX)
Multi – Commodity Exchange (MCX)
India Pepper and Spice Trade Association (IPSTA)
Singapore Commodity Exchange (SICOM)
Dubai Gold Commodity Exchange (DGCX).
Geojit provides information on commodity futures, along with technical and fundamental
analysis online at its website and also through the company's large branch network. The
company conducts Seminars, distributes free in-house literature and holds interactive sessions
that help raise awareness on the futures market. The number of participants is continuously on
the rise thus leading to increased volumes and market efficiency.

Geojit Commodity offers futures trading through multiple exchanges in varied

commodities such as:
Agri commodities: oilseeds, soya, groundnut, pulses, rice, wheat, sugar, spices, rubber, guar,
pepper, cardamom, coffee, etc
Precious metals: gold and silver,
Base metals: steel, aluminium, nickel, zinc, copper, etc
Energy products: crude oil and furnace oil
Geojits clientele in commodities range from investors, co-operative societies, state and
national institutions to dealers, traders, manufacturers, financiers, speculators, arbitragers,etc.
 Geojit does not have proprietary interest in any commodity and therefore is price neutral.
Transaction costs are highly affordable attracting a spectrum of investors. Membership in
multiple exchanges gives clients the added advantage of arbitrage. Geojit has specialized staff
that provide the required guidance, help and enable clients to enter at the appropriate price.

8) PMS (Portfolio Management Services):

Geojit, a SEBI registered Portfolio Manager (Reg. No.INP000000316) offers

discretionary portfolio management services. Geojit has a team of experts who carefully take
investment decisions based on the clients' objectives. The Portfolio Management team has a
successful track record of more than 10 years in the capital market. The team has access to
Geojit's strong Equity Research, and Fundamental & Technical Analysis.

Investment Objective: To generate medium to long-term capital growth (2-3 years) by

identifying undervalued stocks and those with growth opportunities from a select list of well
researched stocks.

Strategy: Identifying growth stocks from a select list through extensive research.

Minimum Investment: Rs.10 lakhs for resident Indians and Rs.25 lakhs for Non-Resident
Indians.

Reports: Portfolio and NAV are communicated bi-weekly via e-mail.

Risk factors: As the stocks are normally held for medium to long term, the net asset value will
be affected by market volatility.

PMS fee:

Option 1: 3% p.a. (charged @0.75% at the end of every quarter on the average of beginning and
ending NAV).
Option 2: 1% p.a. (charged @0.25% at the end of every quarter on the average of beginning and
ending NAV) and performance fee.

Performance fee: 20% on gain in NAV over and above 12% p.a. based on the high watermark
concept charged at the end of the year or on withdrawal.