0601024 equity research fundamental and technical analysis and its impact on stock prices

A
PROJECT REPORT ON
“Equity Research: Fundamental and
Technical analysis and its impact on stock
prices”
FOR
BY
CHAUDHARI KAILAS NANABHAU
MBA-II
2006-2008
UNDER THE GUIDANCE OF
PROF. MAHESH HALALE
SUBMITED TO
UNIVERSITY OF PUNE
IN PARTIAL FULFILMENT OF THE REQUIREMENT
FOR THE AWARD OF DEGREE OF MASTER OF
BUSINESS ADMINISTRATION (MBA)
THROUGH
VISHWAKARMA INSTITUTE OF MANAGEMENT
PUNE - 48
1

ACKNOWLEDGMENT
It’s a great privilege that I have done my project in such a well-organized and
diversified organization. I am great full to all those who helped and supported me in
completing the project.
First of all I would sincerely like to thank Mr. Rakesh P. Sonawane (Branch
Manager, Nasik), for his valuable guidance and kind co-operation during the project.
I am highly grateful to Mr. Nayan Bhandari (Business Associates of Reliance
money) for the help provided by them in various forms.
I am also thankful to our director Dr. Sharad Joshi and my project guide Prof.
Mahesh Halale for helping me in completing the project.
Last but not least, I am also thankful to all college staff and my friends for helping me
directly or indirectly in my project.
2

TO WHOM SO EVER IT MAY CONCERN
This is to certify that Mr. Kailas N. Chaudhari is a bonafide student of our institute.
He has successfully carried out his summer project “ Equity Research :
Fundamental and Technical analysis and its impact on stock prices” titled at
Reliance Money. This is the original study of Mr. Kailas N. Chaudhari and important
sources of data used by him have been acknowledged in his report .
The report is submitted in partial fulfillment of two years full time course of Masters
in Business Administration 2006-2008 as per rules.
___________________ ________________________
Prof. Mr.Mahesh Halale Dr. Sharad L. Joshi
(Project Guide) (Director)
Vishwakarma Institute of Management
CONTENT
3

4
Sr.No. Topic Page No.
1 Executive Summery 1-3
2 Company Profile 4-5
3 Objective of Project 6-6
4 Research Methodology 7-7
5 Data Presentation 8-26
6 Data Analysis & Interpretation 27-59
7 Finding 60-61
8 Suggestion And Conclusion 62-64
9 Limitation 65-65
10 Bibliography 66-66

DATA ANALYSIS
AND
INTERPRETATION
10

EXECUTIVE SUMMARY
EQUITY ANALYSIS is the systematic study of the performance of companies in
stock market with help of fundamental analysis and technical analysis. Equity
analysis consists of fundamental analysis & technical analysis. While decision in
investment of shares should be base on actual movement of shares price measured
more in money & percentage term & nothing else.
In equity analysis, calculations are based on FACTS & not on HOPE. The subject of
equity analysis, i.e. the to attempt to determine future share price movement with the
help of RATIO ANALYSIS, STUDY OF GRAPH. Equity analysis does not discuss
how to buy & sell shares, but does discuss the methods, which enables the investor to
arriving at buying & selling decision.
The Technical Approach to investment is essentially a reflection of the idea that
prices moves in a trend that are determined by the changing attitude of investor’s
toward a variety of economic, monetary, political and psychological forces. The art of
technical analysis, for it is an art, is to identify a trend reversal at a relatively early
stage and ride on that trend until the weight of the evidence shows or proves the trend
has reversed.
15

INTRODUCTION TO BSE AND NSE
Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich
heritage. Popularly known as “BSE”, it was established as “ The Native Share &
Stock Brokers Association ” in 1875. It is the first stock exchange in country to obtain
permanent recognition in 1956 from the Government of India under the Securities
Contracts (Regulation) Act, 1956. The Exchange’s pivotal and pre-eminent role in the
development of the Indian capital market is widely recognized and its index,
SENSEX, is tracked worldwide. Earlier an Association of Persons (AOP), the
Exchange is now a demutualised and corporative entity incorporated under the
provisions of the Companies Act, 1956, pursuant to the BSE (Corporatisation and
Demutualization) Scheme, 2005 notified by the Securities and Exchange Board of
India (SEBI).
With demutualization, the trading rights and ownership rights have been de linked
effectively addressing concerns regarding perceived and real conflicts of interest. The
Exchange is professionally managed under the overall direction of the Board of
Directors. The Board comprises eminent professionals. Representatives of Trading
Members and the Managing Director of the Exchange. The Board is inclusive and is
designed to benefit from the participation of market intermediaries.
The Exchange has a nation-wide reach with a presence in 417 cities and towns of
India. The systems and processes of the Exchange are designed to safeguard market
integrity and enhance transparency in operations. During the year 2004-2005, the
trading volumes on the Exchange showed robust growth.
The Exchange provides an efficient and transparent market for trading in equity, debt
instruments and derivatives. The BSE On Line Trading System (BOLT) is a
proprietary system of the Exchange and is BS 7799-2-2002 certified. The surveillance
and clearing and settlement functions of the Exchange are ISO 9001:2000 certified.
16

SENSEX – THE BAROMETER OF INDIAN CAPITAL MARKETS
For the premier Stock Exchange that pioneered the stock broking activity in Indian,
128 years of experience seems to be a proud milestone. A lot has changed since 1875
when 318 persons became members of what today is called “The Stock Exchange,
Mumbai” by paying a princely amount of Re1. Till the decade of eighties, there was
no scale to measure the ups and downs in the Indian stock market. The Stock
Exchange, Mumbai (BSE) in 1986 came out with a stock index that subsequently
became the barometer of the Indian stock market.
First compiled in 1986, SENSEX is a basket of 30 constituent stocks representing a
sample of large, liquid and representative companies. The base year of SENSEX is
1978-79 and the base value is 100. The index is widely reported in both domestic and
international markets through print as well as electronic media. The entry and exit of
any specific stock depends on the market capitalization of the top 30 companies in the
market and are from different sectors.
NATIONAL STOCK EXCHANGE
The National Stock Exchange (NSE) is India’s leading stock exchange covering
various cities and towns across the country. NSE was set up by leading institutions to
provide a modern, fully automated screen-based trading system with national reach.
The Exchange has brought about unparalleled transparency, speed & efficiency,
safety and market integrity. It has set up facilities and procedures.
NSE has played a catalytic role in reforming the Indian securities market in terms of
microstructure, market practices and trading volumes. The market today uses state-of-
art information technology to provide an efficient and transparent trading, clearing
and settlement mechanism, and has witnessed several innovations in products &
services viz. demutualization of stock exchange governance, screen based trading,
Professionalisation of trading members, fine-tuned risk management systems,
emergence of clearing corporations to assume counter party risks, market of debt and
derivative instruments and intensive use of information technology. IDBI & other
financial institution with paid equity capital of Rs 25 cores set up NSE. It started
operation in Wholesale debt market in June 1994 & in equity, in Nov 1994.
17

Reliance Money is a subsidiary company of Reliance Capital; one of India's leading
and fastest growing private sector financial services company, ranking among the top
3 private sector financial services and banking companies, in terms of net worth.
Reliance Capital is a part of the Reliance Anil Dhirubhai Ambani Group.
Reliance Money is a comprehensive electronic transaction platform offering a wide
range of asset classes. Its endeavor is to change the way India transacts in financial
markets and avails financial services. Reliance Money is a single window, enabling
you to access, amongst others in Equities, Equity & Commodities Derivatives,
Mutual Funds, IPO s, Life & General Insurance products, Offshore Investments,
Money Transfer, Money Changing and Credit Cards.
18
Division of Reliance
Capital
Reliance money Reliance mutual
fund
Reliance General
and life insurance
Equities,
commodities, forex
trading, services
And distribution
house for financial
products
An asset
management
company-floating
fund offers for retail
participation
Mediclaim, travel
care, lip plans, life
Insurance, car
insurance

Reliance Capital offers a comprehensive direct equities service for our private
clients, our services include:
• An equity portfolio review and recommendation service;
• Comprehensive and short form research reports on Australia's leading
Companies, together with regular economic and market reviews;
• Access to floats and new issues;
• Access to International shares and detailed research information
• Access to government bonds;
• Clients who may be looking for advice on not only stocks but also on hybrids,
warrants and options strategies
• Ongoing management of your portfolio aligned to your long term wealth
creation goals
• We can also provide access to Separately Managed Accounts (SMA's) and
Individually Managed Accounts for simple and transparent equities
administration.
To achieve long term financial success you will need a portfolio that increases in
value over time. One of the sectors best able to achieve this growth is Australian
listed shares.
Listed shares can provide you with an income stream through the payment of
dividends. Through dividend imputation, this income stream can be tax effective.
Depending on your particular requirements you may choose shares that focus on
growth opportunities, or on an income stream, or that provide a combination of both.
Reliance Capital’s approach to financial management has the flexibility to ensure that
your individual needs are met. Our step-by-step wealth management service helps
you structure a comprehensive financial strategy that meets both your immediate
financial requirements and your long-term wealth creation goals and objectives.
Reliance Capital applies academic research to the practical world of investing. Our
objective is to help clients develop globally diversified portfolios and to add value
through reduced costs and taxes.
19

OBJECTIVE
It was good opportunity to familiarize myself with the stock market i.e. the capital
market & their co-relation with economical environment through “ EQUITY
RESEARCH”. The analysis of equity gives me the opportunity to understand
thoroughly this behavioral pattern’s of different equity & overall capital market.
The main objective of the project research is as follows.
1. To Study the equity analysis and obtain the knowledge of equity market
2. To Study the present behavior & predicting the future behavior of equity in
stock market.
3. Obtain the knowledge about how to select the companies for investment.
To analyze the performance of company’s through Balance Sheet & Technical graph
of their shares.
RATIONALE
The present market scenario has shown us the Boom in Share Market. Even some of
the research firms showed that Share Market is the fastest growing in India.
From last two years share market is in boom. Now it is possible for the investors to
trade from their own place. As compare to last two years there is a growth in the
number of share brokers and market analysts. Media is playing an important role in
these regards. Now the common man is also thinking of some investment in share
market. Too many investors invest their money for the short span, the intention is
speculative.
20

RESEARCH METHODLOGY
During my project, I collected data through various sources primary & secondary.
Primary source includes :-
1) Discussion with branch manager
2) Discussion with experts
3) Questionnaires for investors
4) Live trading in the market
Secondary source includes :-
1) Various books related to stock market
2) Books related to Financial Management
3) Web sites were used as the vital information source.
Reliance Money felt need of evaluating the price patterns of leading scripts
mainly from the five main blue chip companies and also interested in determining
the trends along with price performance in near future. This equity analysis will
facilitate to investor for profitable investment.
21

EQUITY ANALYSIS
FUNDAMENTAL ANALYSIS
The investor, while buying stock, has the primary purpose of gain. If he invests for a
short period of time, it is speculative but when he holds if for a fairly long
period of time, the anticipation is that he would receive some return on his
investment. The fundamental analysis is a method of finding out the future
price of a stock, which an investor wishes to buy. The method for forecasting
the future behavior of investment and the rate of return on them is clearly
through an analysis of the broad economic forces, industry analysis, the
company analysis and ration analysis.
A. Influence of the economy on the company.
These are the following factor: -
1. Economic Growth
2. Populations
3. Monsoons and Agriculture Production
4. Natural resources and availability of raw material
5. Industrial Productions
6. Inflation
7. Interest rate
8. Foreign exchange reserve
9. Balance of payment position
10. Budget deficits
11. Public debt and foreign debt
12. Domestic saving and capital output rate
13. Employments
14. Taxation policies
15. Infrastructure facilities
16. Government policies
17. Political Stability
18. International developments
19. Capital formations
20. Saving pattern
21. Economic indicators
22. Foreign direct investments
23. Rupee-Dollar Fluctuation
24. Stock News
22

B. Industrial Analysis.
The industry analysis should take in to account the following factors as
influence the performance of the company, whose share prices are to be
analyzed.
Product Line.
It is also necessary to know the industries with a high growth potential like
computers, electronics, chemicals, diamonds, textiles etc. and whether the
industry is in the priority sector of the key industry group of capital goods or
consumers goods group.
Raw Material and Inputs.
Under these head, we have to look in to industries depending on imports of
scare raw materials, competition from other companies and industries and the
barriers to entry of new company, protection from foreign competition, import
and export restriction etc.
Capacity Installed and Utilized.
The demand for industrial product in the economy is estimated by the
planning commission and the Government, and the units are given licensed
capacity on the basis of these estimates.
Industry Characteristics.
It included whether the industry is cyclical, fluctuating of stable. It is also
important industry produce seasonal product or FMCG. It also included
demand of product freight charges, cost of production, advertisement cost,
skill of operation, profitability.
23

Demand and Market.
It includes demand of the product in the market and price of raw material and
other input cost like freight, electricity, season, monsoon, etc. if the nature of
product is such as drugs, fertilizer or other consumer goods, whose price and
distribution control by Government.
Government Policy with regard to Industry
Government Policy is announced in the industrial policy resolution and
Subsequent announcement from time to time by the Government. The Policy
strategy as laid down in the five years plans according to planning
commission and expected demand in the economy.
Management.
If the promoters and the management are the efficient and capable of steering
the company through the difficult days such management likes TATA &
BIRLA, who have reputation, buildup their companies on the strong
foundation. The management has to be assessed in the terms of their
capabilities, popularity, honesty and integrity.
24

TECHNICAL ANALYSIS
The methods used to analyze securities and make investment decisions fall into two
very broad categories: Fundamental Analysis and Technical Analysis.
Fundamental analysis involves analyzing the characteristics of a company in order to
estimate its value. Technical analysis takes a completely different approach; it doesn’t
care one bit about the “value” of a company or a commodity. Technicians (some time
called chartists) are only interested in the price movement in the market.
Despite all the fancy and exotic tools it employs, technical analysis really just studies
supply and demand in a market in an attempt to determine what direction, or trend,
will continue in the future. In other words, technical analysis attempts to understand
the emotions in the market by studying the market it self, as opposed to its
components. If you understand the benefits and limitation of technical analysis it can
give you a new set of tools or skills than will enable you to better trader or investor.
DEFINITION
Technical analysis is a method of evaluating the securities by analyzing the statistics
generated by the market activity, such as past price and volume. In technical analysis,
analysts use charts and other tools to identify patterns that can suggest future
activity.
Just as there are many investment styles on fundamental side, there is also much
different type of technical traders. Some rely on chart patterns. In any case, technical
analysts exclusive use of historical price and volume data is what separates them from
their fundamental counterparts. Unlike fundamental analysis technical analysts don’t
care whether a stock is undervalued the only thing that matter is a security’s past
trading data and what information this data can provide about where the security
might move in the future
25

Assumptions:
1. The Market Discounts Everything
A major criticism of technical analysis is that it only considers price movement,
ignoring the fundamental factors of the company. However, technical analysis
assumes that, at any given a time, a stocks price reflects everything that has or could
affect the company- including Fundamental Factors. Technical analysts believe that
the company’s fundamentals, along with broader economic factors and market
psychology, are all priced into the stock, removing the need to actually consider these
factors separately.
This only leaves the analysis of price movement, which technical theory views as a
product of supply and demand for a particular stock in the market.
2. Price Moves In Trends
In technical analysis, price movements are believed to follow trends. This means that
after a trend has been established, the future price movement is more likely to be in
the same direction as the trend that to be against it. Most technical trading strategies
are based on this assumption.
3. History Tends To Repeat Itself
Another important idea in technical analysis is that history tends to repeat itself,
mainly in terms of price movement. The repetitive nature of price movement is
attributed to market psychology; in other words, market participants tend to provide a
consistent reaction to similar market stimuli over time. Technical analysis uses chats
patterns to analyze market movements and understand trends. Although many of
these charts have been use for more than 100 years they are still believed to be
26

relevant because they illustrate patterns in price movements that often repeat
themselves.
Line charts
A style of charts that is created by connecting a series of data points together with a
line. This is the most basic type of charts used in finance and connecting a series of
past prices together with a line generally creates it.
Bar chart
A style of chart used by some technical analysts, on whom as illustrated below, the
top of the vertical line indicates the highest price a security traded at during the day,
and the bottom represents the lowest price. The closing price is displayed on the right
side of the bar, and the opening price is shown on the left side of the bar. A single bar
like the one below represents one day of trading.
27

These are the most popular type of chart used in technical analysis. The visual
representation of price activity over a given period of time is used to spot trends and
patterns.
Candlestick
A price chart that displays the high, low, open and close for a security each day over a
specified period of time.
There are many trading strategies based upon patterns in candlestick charting.
Technical analysis: the use of trend
One of the most important concepts in technical analysis is that of trend. The meaning
in finance isn’t all that different from the general definition of the term- a trend is
really nothing more than the general direction in which a security or market is
headed. Take a look at the chart below:
28

It isn’t hard to see that the trend in figure is up. However, isn’t not always this easy to
see a trend.
There are lots of ups and downs in this chart, but there isn’t a clear indication of
which direction this security is headed.
The Importance of Trend
It is important to be able to understand and identify trends so that you can trade with
them rather than trade against them. Two important sayings in technical analysis are “
29

the trend is your friend” and “ don’t buck the trend” Illustrating how important trend
analysis is for technical trade.
Types of Trend
There are three types of trend:
• Up Trends
• Downtrends
• Sideways/ Horizontal Trends
As the names imply, when each successive peak and trough is higher, it’s referred to
as an upward trend. If the peaks and troughs are getting lower. It’s a downtrend.
When there is little movement up or down in the peaks and troughs, it’s a sideways or
horizontal trend. If you want to get really technical, you might even say that a
sideways trend is actually not a trend on its own, but a lack of a well-defined trend in
either direction. In any case, the market can really only trend in these three ways: up,
down or nowhere.
Uptrend
Describes the price movement of a financial asset when the overall direction is
upward. A formal uptrend is when each successive peak and trough is higher than the
ones found earlier in the trend.
30

Notice how each successive peak and trough is located above the previous ones. For
example, the peak at trend is higher than the peak at uptrend. The uptrend will be
deemed broken if the next low on the chart falls below trend.
Downtrend
Describes the price movement of a financial asset when the overall direction is
downtrend. A formal downtrend occurs when each successive peak and trough is
lower than the ones found earlier in the trend.
31

Notice how each successive peak and trough is lower than the previous one. For
example, the low trend is lower than the low at Point. The downtrend will be deemed
broken once the price closes above the high at high direction trend.
Downtrend is the opposite of uptrend.
Trend lines
A trend line is a simple charting technique that adds a line to a chart to represent the
trend in the market or a stock. Drawing a trend line is as simple as drawing a straight
line that follows a general trend. These lines are used to clearly show the trend and
are also used in the identification of the reversals.
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As you see in above Figure, an upward trend lines is drawn at the lows of an upward
trend. This line represents the support the stock has every time it moves from a high
to a low. Notice how the price is propped up by this support. This type of trend line
helps traders to anticipate the point at which a stock’s price will begin moving
upwards again. Similarly, a downward trend line is drawn at the highs of the
downward trend. This line represents the resistance level that a stock faces every time
the price moves from a low to a high.
Trend Lengths:
Along with this trend direction, there is three-trend classification. A trend of any
direction can be classified as a long-term trend, intermediate trend or a short-term. In
terms of the stock market, a major trend is generally categorized as one lasting longer
than a year. An intermediate trend is considered to last between one and three months
and a near-term trend is anything less than a month. A long-term trend is composed of
several intermediate trends, which obtain move against the direction of the major
trend. If the major trend is upward and there is a downward correction in price
movement followed by a continuation of the up trend, the correction is considered to
be an intermediate trend. The short term trends are components both major and
intermediate trends. Take a look a Figure to get a sense of how these three trends
lengths might look.
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When analyzing trends, it is important that the chart is constructed to best reflect the
type of trend being analyzed. To help identify long-term trends, chartists to get a
better idea of the long-term trend use weekly charts or daily charts spanning a five-
year period. Daily data charts are best use when analyzing both intermediate and
short-term trends. It is also important to remember that the longer the trend, the more
important it is; for example, a month trend is not as significant as five-year trend.
Channels
A Channel, or channel lines, is the addition of two parallel trend lines that act as
strong areas of support and resistance. The upper trend line connects a series of highs,
while the lower trend line connects a series of lows. A channel can slope upward,
downward or sideways but regardless of the direction, the interpretation remains the
same. Traders will expect a given security to trade between two levels of support and
resistance until it breaks beyond one of the levels in which case traders can expect a
sharp move in Direction of the break. Along with clearly displaying the trend,
channel is mainly used to illustrate important areas of support and resistance.
34

Above graph a descending channel on stock chart; the upper trend line has been
placed on the highs and lower trend line is on the lows. The price has bounced off of
these line several times, and has remained rang-bound for several months. As long as
the price does not fall below the lower line or move beyond the upper resistance, the
range bound downtrend is expected to continue.
Double Bottom
A charting pattern used in technical analysis. It describes the drop of a stock (or
index), a rebound, another drop to the same (or similar) level as the original drop, and
finally another rebound.
35

Double Top
A term used in technical analysis to describe the rise of a stock, a drop, another rise to
the same level as the original rise, and finally another drop.
The double top looks like the letter “M”. The twice-touched high is considered a
resistance level.
Triple Bottom
A pattern used in technical analysis to predict the reversal of a prolonged downtrend.
The pattern is identified when the price of an asset creates three troughs at nearly the
same price level. The third bounce off the support is an indication that buying interest
(demand) is outweighing selling interest (Supply) and that trend is in the process of
reversing.
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Once the first bottom is created, the price reaches a peak and retraces back toward the
prior support. This is when buyer enters again and pushes the price of the asset
higher, creating bottom No.2. The price of the asset then created another peak
and heads lower for its final test of the support. The final bounce of the support
level creates bottom No.3 and traders will get ready to enter a long position once
the price breaks above the previous resistance (Illustrated by the black on the
chart). This pattern is considered to be a very reliable indication that the
downtrend has reversed and that the new trend in the upward direction. Sudden
change in the price direction of a stock, index, commodity or derivative security.
Also referred to as a “Trend Reversal”, “Rally” or “Correction”.
Triple Top
A pattern used in technical analysis to predict the reversal of prolonged up trend. This
pattern is identified when the price of an asset creates three peaks at nearly the same
price level. The bonus off the resistance near the third peak is clear indication that
buying interest is becoming exhausted. The traders to predict the reversal of the up
trend use it.
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1 2 3

The three consecutive tops make this pattern visually similar to the head and
shoulders pattern but, in this case, the middle peak is nearly equal to the other peak
rather than being higher. Many traders will enter into a short position once the price
of asset falls below the identified support level. (Shown by the line in the chart
above).
Head and Shoulders Pattern
A technical analysis term used to describe a chart formation in which a stocks price:
1 Rises to a peak and subsequently declines.
2. Then, the price rises above the former peak and again declines
3. And finally, rises again, but not to the second peak, and declines once
more.
The First and Third peaks are shoulders, and second peak forms the head.
The “Head -and –Shoulders” pattern is believed to be one of the most reliable trend
reversal patterns.
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Volume
The number of shares or contracts traded in a security or an entire market during a
given period of time. It is simply the amount of shares that trade hands from sellers to
buyers as a measure of activity. If a buyer of a stock purchases 100 shares from a
seller, then the volume for that period increases by the 100 shares based on that
transaction.
Volume is an important indicator in the technical analysis as it is used to measure the
worth of a market move. If the market have made strong price move either up or
down the perceived strength of that move depends on the volume of that period. The
higher the volume during that price move the more significant the move.
Support
The price, which, historically, a stock had difficulty falling below. It is thought of as
the level at which a lot of buyers tend to enter the stock. Often referred to as the
“Support Level”.
39

Resistance
The Price at which a stock or market can trade, but which it cannot exceed, for a
certain period of time. Often referred to as “Resistance Level”.
40

Moving Average- MA
An indicator frequently used in technical analysis showing the average value of a
security’s price over a set of period. Moving averages are generally used to measure
momentum and define areas of possible support and resistance.
41

Infosys Technologies Ltd (Infosys) was incorporated on July 2, 1981, as a private ltd
company. It became public limited company. To became public limited company on
June 1992 and subsequently the name was also changed to Infosys Technologies Ltd.
It was the first Indian company to be listed on American Stock Exchange. The
company is one of India’s leading information technologies (IT) services companies.
Enterprise Services, Product R&D services and Consulting Services. The company is
having its Headquarters in Banglore and has 17 offshore development facilities like
Aerospace & Defense, Automotive, and Banking & Capital Markets. Communication
Services, Energy, Insurance, Healthcare, Media, Transportation Services etc., Infosys
Technologies came out with an IPO in Feb. 1993 at a premium of Rs 95 for a face
value of Rs 10 per share. Since then, it has issued three bonus issues (each in the ratio
of 1:1) and split its face value of Rs 5 each. In Feb 2000, the ADRs were split in the
ratio of 2:1. In 2004-05 the company has signed up 136 new clients and had a total
client base of 438 at the end of the year. The company’s product-FINACLE, is an
integrated core banking solution that is centralized, muliti-currency and multi-
language-enabled, functionally rich, and addresses both retail and corporate banking
requirements. During 2002, GOI has raised the investment limit in an Indian
Company for FII from 49% to the maximum level approved by FDI and the
maximum limit for the software industry as approved by FDI is 100% at present, the
company is in the plan of increasing the limit of such investment to 100%. In 2006
The Company has completed the construction of an employee training facility in
Mysore, India to further enhance our employee training capabilities. The Mysore
Training complex wills accommodate 4,500 trainees at a time.
42

Price Fluctuations of Infosys Tech
43
INFOSYS TECHNOLOGIES LTD. (INFOSYS)
Type Audited Audited Audited Audited Audited
Date of begin 1-Apr-07 1-Jan-07 1-Oct-06 1-Jul-06 1-Apr-06
Date of End 1-Jun-07 31-Mar-07 31-Dec-06 30-Sep-06 30-Jun-06
Description Value {Rs.million}
Net Sales 35510 35550 34540 32730 28670
Other income 2550 1200 600 660 1290
Total income 38060 36750 35140 33390 29960
Expenditure -25410 -24070 -23050 -22190 -19930
Operating Profit 12650 12680 12090 11200 10030
Gross Profit 12650 12680 12090 11200 10030
Depreciation -1340 -1330 -1290 -1100 -970
Profit before Tax 11310 11350 10800 -10100 9060
Tax -1030 -120 -1220 -1140 -1040
Provision and
Cost. -- 10 -- -- -30
Profit after Tax 10280 11240 9580 8960 7990
Extraordinary
Items -- - -- -- 60
Net Profit 10280 11240 9580 8960 8050
Equity Capital 2860 2860 2790 2780 1380
Reserves 119040 108760 93630 82730 76900
EPS 18 19.96 17.2 16.15 29.13
Result Type Q Q Q Q Q

44
Date Open High Low Close
1-Jun-07 1933 1950 1932 1939
4-Jun-07 1950 1969 1909 1916
5-Jun-07 1920 1950 1908 1943
6-Jun-07 1974 1974 1930 1938
7-Jun-07 1847 1972 1847 1957
8-Jun-07 1950 1975 1912 1951
11-Jun-07 1974 1996 1970 1980
12-Jun-07 1962 1999 1962 1990
13-Jun-07 1715 1999 1715 1989
14-Jun-07 1995 2031 1995 2019
15-Jun-07 2030 2038 2000 2009
18-Jun-07 2025 2029 1986 1989
19-Jun-07 1990 1991 1942 1957
20-Jun-07 1966 1974 1950 1954
21-Jun-07 1954 1966 1935 1958
22-Jun-07 1965 1965 1935 1951
25-Jun-07 1951 1963 1919 1937
26-Jun-07 1930 1948 1920 1922
27-Jun-07 1931 1946 1928 1935
28-Jun-07 1940 1948 1913 1925
29-Jun-07 1950 1970 1920 1929
2-Jul-07 1944 1955 1929 1944
3-Jul-07 1950 1953 1935 1947
4-Jul-07 1961 1961 1922 1931
5-Jul-07 1931 1940 1910 1917
6-Jul-07 1847 1977 1847 1972
9-Jul-07 1989 2009 1986 1994
10-Jul-07 1995 2042 1995 2021
11-Jul-07 2000 2000 1925 1930
12-Jul-07 1950 1960 1915 1922
13-Jul-07 1932 1958 1922 1940
16-Jul-07 1945 1955 1928 1936
17-Jul-07 1940 1959 1934 1939
18-Jul-07 1941 1955 1935 1945
19-Jul-07 1948 2000 1946 1997
20-Jul-07 2000 2019 1971 1986
23-Jul-07 1974 1984 1931 1948
24-Jul-07 1948 1980 1941 1975
25-Jul-07 1976 2010 1945 1989
26-Jul-07 1998 2050 1995 2034
27-Jul-07 2001 2015 1962 2008
30-Jul-07 2008 2010 1966 1986
31-Jul-07 1990 2035 1955 1976

infosys
1700
1720
1740
1760
1780
1800
1820
1840
1860
1880
1900
1920
1940
1960
1980
2000
2020
2040
2060
2080
6/1/2007
6/6/2007
6/11/2007
6/16/2007
6/21/2007
6/26/2007
7/1/2007
7/6/2007
7/11/2007
7/16/2007
7/21/2007
7/26/2007
June & july 2007
Prices
Open
High
Low
Close
Graph No.1
Technical analysis of Infosys Technology ltd.
From the chart of Infosys Technology Ltd we can say that script is having bullish
trend as it is breaking new highs, it may further go up.
45

Fundamental: -
1. There is a fluctuation in equity dividend. There is no fixed policy regarding
payment of dividend.
2. Rupee Dollar Fluctuation- As most of software companies in India having
their clients in the abroad, mostly in USA. There fore their earning is getting
from of dollar. If the dollar price decrease its affect their revenue badly and
recently dollar price has come down to 40.53 from 42.95rs, it will affect forth-
coming results, and currently fundamentally, it is not looking strong.
3. In India, salary of software professional will be increasing, and it will
marginally affect profit of companies and because of that, EPS will be come
down.
4. Infosys technology Ltd. On July 2007 has announced that it has signed a
multi-million dollar outsourcing contract with Royal Philips Electronics. The
deal with Philips reinforces the company’s leadership position in
transformation based BPO services. The company’s BPO has significant
growth over 70% in revenues and an increase in client base of over one-third
in FY 2007.
5. Gross Profit Ratio of the Company is stable from last five years. It is a good
sign of consistency and smooth working of the company.
6. The Net Profit Ratio is constant for last four years. It means company has
good Future.
46

Reliance Industries Ltd.
The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest
private sector enterprise, with businesses in the energy and materials value chain.
Group's annual revenues are in excess of USD 22 billion. The flagship company,
Reliance Industries Limited, is a Fortune Global 500 company and is the largest
private sector company in India
Backward vertical integration has been the cornerstone of the evolution and growth of
Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of
backward vertical integration - in polyester, fiber intermediates, plastics,
petrochemicals, petroleum refining and oil and gas exploration and production - to be
fully integrated along the materials and energy value chain. The Group's activities
span exploration and production of oil and gas, petroleum refining and marketing,
petrochemicals (polyester, fiber intermediates, plastics and chemicals), textiles and
retail. Reliance enjoys global leadership in its businesses, being the largest polyester
yarn and fiber producer in the world and among the top five to ten producers in the
world in major petrochemical products.
The Group exports products in excess of USD 7 billion to more than 100 countries in
the world. There are more than 25,000 employees on the rolls of Group Companies.
Major Group Companies are Reliance Industries Limited (including main subsidiaries
Reliance Petroleum Limited and Reliance Retail Limited), Indian Petrochemicals
Corporation Limited and Reliance Industrial Infrastructure Limited.
Reliance Industries (RIL), a petrochemical major is the flagship company of Reliance
Group has business interests in textile, polyester, petrochemical, oil and gas and oil
refinery, polymer, chemical, Acrylic and fiber Intermediates. Reliance is worlds
largest producer of polyester fiber & yarn. The company is also worlds – 3rd
largest
producer of paraxylene (PX), 5th
largest producer of Mono ethylene glycol (MEG), 6th
largest producer of Purified terephthalic Acid (PTA) & 7th
largest producer of
47

Polypropylene PP). Within the country, Reliance is the largest manufacturer of
Polyester Fiber & Yarn, PX, PTA and MEG. The market shares of the company are in
a leading position for all its major business in India. RIL has grown into
petrochemical major since its modest. Beginning with the systematic fabric mill at
Naorda. The company has set up text rising/twisting facilities in 1979. Further the
company has set up facility at Patalganga, Maharashtra to produced PFY in 1982,
PSF in 1986, and liner alkyl benzene (LAB) and PTA in 1988. The company has set
up petrochemical facility to produced HDPE and PVC at Hazira at Gujarat in
technical collaboration with DuPont and BF Goodich respectively.
48

Type UnAudited UnAudited UnAudited UnAudited UnAudited
Gross Sales 294930 273990 277710 295500 261660
Excise Duty -14370 -15040 -12990 -10760 -16440
Net Sales 280560 258950 264720 284740 245220
Other income 1050 850 420 220 440
Total income 281610 259800 265140 284960 245660
Expenditure -228790 -211960 -217630 -239090 -202850
Operating Profit 52820 47840 47510 45870 42810
Interest -2880 -2770 -2930 -2780 -2660
Gross Profit 49940 45070 44580 43090 40150
Depreciation -9580 -10220 -10620 -10180 -9070
Profit before Tax 40360 34850 33960 32960 31080
Tax -7720 -6320 -5970 -5820 -5610
Profit after Tax 32640 28530 27990 27090 25470
Net Profit 32640 28530 27990 27090 25470
Equity Capital 13940 13940 13940 13940 13940
EPS 23.4 20.5 20.1 19.4 18.3
Price Fluctuations Share of Reliance Industries
1-Jun-07 1773 1780 1747 1751
50

4-Jun-07 1769 1769 1739 1742
5-Jun-07 1739 1751 1722 1745
6-Jun-07 1751 1758 1682 1691
7-Jun-07 1673 1707 1660 1669
8-Jun-07 1664 1698 1647 1657
11-Jun-07 1800 1800 1660 1666
12-Jun-07 1675 1712 1663 1699
13-Jun-07 1698 1710 1670 1675
14-Jun-07 1686 1703 1685 1696
15-Jun-07 1700 1710 1668 1682
18-Jun-07 1698 1698 1667 1672
19-Jun-07 1672 1730 1670 1727
20-Jun-07 1727 1749 1722 1733
21-Jun-07 1735 1748 1721 1734
22-Jun-07 1735 1735 1699 1705
25-Jun-07 1708 1714 1697 1709
26-Jun-07 1709 1720 1700 1703
27-Jun-07 1699 1720 1693 1699
28-Jun-07 1709 1715 1686 1692
29-Jun-07 1700 1711 1689 1701
2-Jul-07 1704 1712 1679 1684
3-Jul-07 1676 1713 1676 1707
4-Jul-07 1711 1732 1709 1718
5-Jul-07 1718 1725 1681 1710
6-Jul-07 1714 1731 1685 1710
9-Jul-07 1703 1719 1701 1711
10-Jul-07 1715 1715 1695 1703
11-Jul-07 1717 1719 1686 1703
12-Jul-07 1707 1725 1707 1719
13-Jul-07 1730 1791 1726 1773
16-Jul-07 1780 1789 1767 1777
17-Jul-07 1789 1839 1780 1828
18-Jul-07 1835 1839 1804 1823
19-Jul-07 1823 1909 1817 1893
20-Jul-07 1899 1915 1881 1892
23-Jul-07 1880 1915 1875 1909
24-Jul-07 1912 1931 1908 1913
25-Jul-07 1895 1912 1875 1903
26-Jul-07 1910 1949 1906 1942
27-Jul-07 1920 1936 1855 1868
30-Jul-07 1885 1899 1840 1849
31-Jul-07 1865 1902 1833 1894
51

Reliance
1645
1655
1665
1675
1685
1695
1705
1715
1725
1735
1745
1755
1765
1775
1785
1795
1805
1815
1825
1835
1845
1855
1865
1875
1885
1895
1905
1915
1925
1935
1945
1955
1965
01-Jun-07
07-Jun-07
13-Jun-07
19-Jun-07
25-Jun-07
29-Jun-0705-Jul-0711-Jul-0717-Jul-0723-Jul-0727-Jul-07
June & July 2007
Prices
Open
High
Low
Close
Graph No.2
Technical analysis of Reliance Industry: -
The chart of Reliance Industry is looking bullish and No Correction is seen from the
last two months and stock is in full movement and candle sticks are showing positive
sign for long term investment.
Fundamental: -
52

1. Earning per share shows increasing trend from last four Quarters, it means
profit generation capacity is increasing.
2. Company has announced good result for last quarter that’s why it is
looking bullish.
3. Reliance has entered in Retail market they have already started
“RELIANCE FRESH” out lets
4. With in a short span of six years as an E&P operator, the company has
discovered a hydrocarbons in the four offshore basin of India namely
Krishna, Godavari, Mahanadi, sourashtra and now cauvery, basin with
major commercial finds in deep water. This discovery establishes the
company as a pioneer in the challenging deep-water exploration.
53

The Company was incorporated on 24th December 1949 as Hindustan Electric
Company Limited. In 1965, the Company’s name was changed to Hindustan Brown
Boveri Limited (HBB). Pursuant to the Scheme of Amalgamation of Asea Limited
with HBB with effect from 1st January 1989, the name was further changed to Asea
Brown Boveri Limited (ABB) with effect from 13th October 1989.
Flakt India Limited was amalgamated with ABB with effect from 5th October 1995.
During 1994-95, a joint venture Company - ‘ABB Daimler-Benz Transportation AG’
(Adtranz) was established by ABB Zurich and Daimler-Benz AG, Germany, in
Germany. A subsidiary of Adtranz was incorporated in India viz. ’ABB Daimler-
Benz Transportation Limited which took over the Transportation Business of the
Company effective 1st
January 1996.
ABB’s power generation business was globally transferred into the new 50-50 JV
with Alstom in 1999. In India the power generation business has been demerged and
transferred to ABB Alstom Power India Ltd. with effect from 1st April 1999. In
consideration of the transfer of the power business, each shareholder of ABB has
been allotted one share in ABB Alstom Power India Ltd. for every share held in the
company.
Capital:
The Authorised Share Capital of the Company is Rs.500,000,000 and the paid-up
share capital of the Company as at the end of the financial year ended 31st December
1999 is Rs.414,183,560, consisting of 41,418,356 Equity Shares of the face value of
Rs.10 each.
Shareholding Pattern:
Asea Brown Boveri Limited, India, is a partly owned subsidiary of ABB Asea Brown
Boveri Limited, Zurich, Switzerland (ABBZH). ABBZH and Fläkt AB, Sweden, a
100 percent subsidiary of ABBZH, hold 50.99% of Equity Shares in the Company.
The balance stake is held by: FIs 22.14%, FIIs 3.63%, MFs 2.32, Non-resident
Individual 0.08%, Nationalised Banks 0.15%, Bodies Corporate 0.93%,Directors and
their relatives 0.01%, NSDL (Transit) 1.95% and General Public 17.8%.
ABB LTD.
54

Type Un audited Audited Un audited Un audited Un audited
Date of begin 01/1/2007 01/10/2006 1/07/2006 1/04/2006 01/1/2006
Date of End 31/3/2007 31/12/2006 30/9/2006 30/6/2006 31/3/2006
Net Sales 13124.44 14263.15 10705.6 9742.21 8029.13
Other income 151.69 174.06 230.4 152.97 179.51
Total income 13276.13 14437.22 10936 9895.17 8208.63
Expenditure -11842.61 -12316.42 -9599.84 -8722.17 -7334.61
Operating Profit 1433.52 2120.8 1336.16 1173.01 874.03
Interest -10.02 -1.09 -2.47 -1.75 -1.94
Gross Profit 1423.5 2119.71 1333.68 1171.26 872.09
Depreciation -86.17 -71.16 -66.25 -65.21 -62.06
Profit before Tax 1337.33 2048.55 1267.43 1106.05 810.03
Tax -471 -699 -443 -387 -297
Profit after Tax 866.33 1349.55 821.43 719.05 513.03
Net Profit 866.33 1349.55 821.43 719.05 513.03
Equity Capital 423.82 423.82 423.82 423.82 423.82
EPS 20.44 31.84 19.38 16.97 12.11
Price Fluctuations Shares of ABB Co. Ltd
55

1-Jun-07 4627 4758 4603 4698
4-Jun-07 4769 4769 4652 4666
5-Jun-07 4680 4702 4610 4631
6-Jun-07 4769 4769 4500 4579
7-Jun-07 4510 4598 4502 4554
8-Jun-07 4510 4615 4481 4531
11-Jun-07 4570 4595 4505 4520
12-Jun-07 4520 4579 4475 4537
13-Jun-07 4501 4535 4370 4408
14-Jun-07 4444 4500 4420 4485
15-Jun-07 4525 4584 4470 4516
18-Jun-07 4554 4665 4525 4603
19-Jun-07 4625 4648 4590 4611
20-Jun-07 4699 4699 4627 4657
21-Jun-07 4661 4750 4651 4724
22-Jun-07 4730 4779 4700 4726
25-Jun-07 4726 4800 4676 4701
26-Jun-07 4670 4819 4670 4792
27-Jun-07 4800 4841 4751 4767
28-Jun-07 960 1055 950 1036
29-Jun-07 1050 1100 958 1094
2-Jul-07 1104 1145 1094 1111
3-Jul-07 1119 1134 1116 1126
4-Jul-07 1150 1150 1105 1121
5-Jul-07 1130 1130 1091 1111
6-Jul-07 1090 1142 1090 1133
9-Jul-07 1137 1150 1109 1115
10-Jul-07 1125 1125 1103 1107
11-Jul-07 1090 1117 1083 1087
12-Jul-07 1100 1125 1090 1117
13-Jul-07 1134 1145 1120 1125
16-Jul-07 1135 1137 1098 1113
17-Jul-07 1120 1120 1081 1085
18-Jul-07 1088 1096 1055 1071
19-Jul-07 1060 1085 1060 1076
20-Jul-07 1077 1089 1067 1072
23-Jul-07 1076 1149 1065 1138
24-Jul-07 1165 1175 1125 1148
25-Jul-07 1131 1145 1117 1134
26-Jul-07 1144 1150 1120 1132
27-Jul-07 1125 1125 1051 1079
30-Jul-07 1063 1099 1046 1070
31-Jul-07 1080 1153 1072 1147
56

ABB
900
1050
1200
1350
1500
1650
1800
1950
2100
2250
2400
2550
2700
2850
3000
3150
3300
3450
3600
3750
3900
4050
4200
4350
4500
4650
4800
4950
5100
6/1/20076/6/2007
6/11/2007
6/16/2007
6/21/2007
6/26/20077/1/20077/6/2007
7/11/2007
7/16/2007
7/21/2007
7/26/2007
7/31/2007
For the Month of June & July 2007
Prices
Open
High
Low
Close
Graph No.3
Technical analysis of ABB: -
The stock of ABB is in consolidation phase that’s why its become unpredictable that
where it would be go. In 7th
July 2007 in this period the company has declared record
date for stock spilt. (i.e. for every 1share= 5shares). Because the record date was new
the stock went up for upward 4800 level (upside at 200 points) & for this level it spilt
(4800/5) = 960Rs. & then went up again follow as it 400 in case volatile in the stock.
57

STOCK SPLIT
ABB
4350
4450
4550
4650
4750
4850
4950
6/1/076/4/076/7/076/10/076/13/076/16/076/19/076/22/076/25/07
For the month of june 2007
Prices
Open
High
Low
Close
Fundamental: -
1. ABB comes under capital goods sector it’s main competitors are siemens
and crompton greaves but ABB has strong order book than those
competitor. The next 5 to 6 year it is expected to be completed
2. Bags order worth 289 cr. from Delhi metro rail corporation.
3. ABB has very good EPS as compare to its competitor so stock is good.
58

Larsen & Toubro Limited (L&T) is a technology-driven engineering and construction
organization, and one of the largest companies in India's private sector. It has
additional interests in manufacturing, services and Information Technology. A strong,
customer-focused approach and the constant quest for top-class quality have enabled
the Company to attain and sustain leadership in its major lines of business across
seven decades.
L&T has an international presence, with a global spread of offices. A thrust on
international business over the last few years has seen overseas earnings growing to
18 per cent of total revenue. With factories and offices located around the country,
further supplemented by a wide marketing and distribution network, L&T's image
and equity extends to virtually every district of India.
L&T believes that progress must necessarily be achieved in harmony with the
environment. A commitment to community welfare and environmental protection
constitute an integral part of the corporate vision.
History
The evolution of L&T into the country's largest engineering and construction
organizations is among the more remarkable success stories in Indian industry. The
company was founded in Bombay (Mumbai) in 1938 by two Danish engineers,
Henning Holck-Larsen and Soren Kristian Toubro - both of whom were strongly
committed to developing India's engineering talent and enabling it to meet the
demands of industry. Beginning with the import of machinery from Europe, L&T
rapidly took on engineering and construction assignments of increasing
sophistication. Today, the company sets engineering benchmarks in terms of scale
and complexity.
59

LARSON AND TOUBRO LTD. (L & T)
Type Unaudited Audited Unaudited Unaudited Unaudited
Date of begin 01/4/2007 01/1/2007 1/10/2006 1/07/2006 01/4/2006
Date of End 30/6/2007 31/03/2007 31/12/2006 30/9/2006 30/6/2006
Gross Sales 45738.7 63657.4 41995.1 38043 35318.3
Excise Duty -686.6 -1175 -810.9 -682.3 -549.3
Net Sales 45052.1 62482.4 41184.2 37360.7 34769
Other income 2114.7 2041.4 1279.3 1117.3 474.3
Total income 47166.8 64523.8 42463.5 38478 35243.3
Expenditure -40821.6 -54384 -36928.9 -34978.8 -32328.6
Interest -157.2 -63.3 -12.2 -106.1 -157.7
Gross Profit 6188 10076.5 5522.4 3393.1 2757
Depreciation -424.1 -698.1 -356.7 -336.4 -308.9
Profit before Tax 5763.9 9378.4 5165.7 3056.7 2448.1
Tax -1995.4 -2370.7 -1726.7 -1044.5 -876.8
Profit after Tax 3768.5 7007.7 3439 2012.2 1571.3
Net Profit 3768.5 7007.7 3439 2012.2 1571.3
Equity Capital 567.6 566.5 561.1 280 278.3
EPS 13.3 24.95 12.27 14.39 11.37
Price Fluctuations of shares of Larson & Toubro Ltd.
60

1-Jun-07 2005 2028 1985 2000
4-Jun-07 2025 2030 1966 1972
5-Jun-07 1979 1979 1937 1945
6-Jun-07 1925 1990 1915 1921
7-Jun-07 1901 1940 1879 1897
8-Jun-07 1901 1920 1865 1885
11-Jun-07 1900 1929 1881 1892
12-Jun-07 1927 1929 1881 1907
13-Jun-07 1910 1921 1860 1868
14-Jun-07 1965 1965 1880 1924
15-Jun-07 1933 1966 1930 1948
18-Jun-07 1949 1969 1919 1927
19-Jun-07 1942 2003 1924 1996
20-Jun-07 2003 2035 2003 2027
21-Jun-07 2005 2150 2005 2105
22-Jun-07 2105 2125 2087 2108
25-Jun-07 2108 2199 2056 2174
26-Jun-07 2180 2180 2142 2160
27-Jun-07 2165 2165 2135 2144
28-Jun-07 2147 2166 2127 2154
29-Jun-07 2163 2207 2160 2198
2-Jul-07 2230 2278 2207 2235
3-Jul-07 2265 2298 2241 2261
4-Jul-07 2283 2320 2245 2293
5-Jul-07 2300 2364 2300 2331
6-Jul-07 2335 2388 2330 2365
9-Jul-07 2365 2428 2365 2416
10-Jul-07 2435 2435 2380 2389
11-Jul-07 2379 2415 2363 2381
12-Jul-07 2400 2417 2367 2378
13-Jul-07 2400 2450 2393 2400
16-Jul-07 2400 2434 2388 2415
17-Jul-07 2439 2439 2376 2392
18-Jul-07 2395 2395 2296 2330
19-Jul-07 2341 2419 2338 2380
20-Jul-07 2410 2500 2395 2479
23-Jul-07 2480 2669 2447 2625
24-Jul-07 2695 2732 2617 2670
25-Jul-07 2666 2666 2540 2569
26-Jul-07 2570 2635 2506 2545
27-Jul-07 2500 2530 2400 2420
30-Jul-07 2420 2500 2370 2443
31-Jul-07 2461 2630 2461 2608
61

LNT
1800
1850
1900
1950
2000
2050
2100
2150
2200
2250
2300
2350
2400
2450
2500
2550
2600
2650
2700
2750
2800
06-01-0706-08-0706-15-0706-22-0706-29-0707-06-0707-13-0707-20-0707-27-07
For the month of June & July 2007
Prices
Open
High
Low
Close
Graph No.4
Technical Analysis: The chart of Larson & Toubro is looking I saw how support and
resistance levels can be penetrated by a change in investor expectations. This type of
a change is often abrupt and “news based”. In this section I will review “trends”. A
trend represents a consistent change in prices (i.e. a change in investor expectations)
As shown in the following chart, a rising trend is defined by successively
higher low prices. A rising trend can be thought of as a rising support level-the bulls
are in control and are pushing prices higher.
62

Fundamental: -
1. Larsen & Toubro Ltd (L&T) has announced that the Company has secured
two more Design and Build contracts from Delhi Metro Railway
Corporation (DMRC) for the construction of the underground station at
Saket (Delhi) and a tunnel as part of its Phase II Project.
2. Larsen & Toubro Ltd has announced that the Company has bagged an order
for Rs. 980 corers for the supply and installation of Blast Furnace from Tata
Steel for its project in kalinganagar orissa.
3. Larsen & Toubro Ltd (L&T) going to set up IT special economic zone with
Arun Excello at vallancheri Tamilnadu.
4. The company currently has order book worth Rs. 41600 corers.
63

The origin of the State Bank of India goes back to the first decade of the nineteenth
century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806.
Three years later the bank received its charter and was re-designed as the Bank of
Bengal (2 January 1809). A unique institution, it was the first joint-stock bank of
British India sponsored by the Government of Bengal. The Bank of Bombay (15
April 1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal.
These three banks remained at the apex of modern banking in India till their
amalgamation as the Imperial Bank of India on 27 January 1921.
Primarily Anglo-Indian creations, the three presidency banks came into existence
either as a result of the compulsions of imperial finance or by the felt needs of local
European commerce and were not imposed from outside in an arbitrary manner to
modernize India's economy. Their evolution was, however, shaped by ideas culled
from similar developments in Europe and England, and was influenced by changes
occurring in the structure of both the local trading environment and those in the
relations of the Indian economy to the economy of Europe and the global economic
framework.
First Five-Year Plan
In 1951, when the First Five Year Plan was launched, the development of rural India
was given the highest priority. The commercial banks of the country including the
Imperial Bank of India had till then confined their operations to the urban sector and
were not equipped to respond to the emergent needs of economic regeneration of the
rural areas. In order, therefore, to serve the economy in general and the rural sector in
particular, the All India Rural Credit Survey Committee recommended the creation of
a state-partnered and state-sponsored bank by taking over the Imperial Bank of India,
and integrating with it, the former state-owned or state-associate banks. An act was
accordingly passed in Parliament in May 1955 and the State Bank of India was
constituted on 1 July 1955. More than a quarter of the resources of the Indian banking
system thus passed under the direct control of the State. Later, the State Bank of India
64

(Subsidiary Banks) Act was passed in 1959, enabling the State Bank of India to take
over eight former State-associated banks as its subsidiaries (later named Associates).
The State Bank of India was thus born with a new sense of social purpose aided by
the 480 offices comprising branches, sub offices and three Local Head Offices
inherited from the Imperial Bank. The concept of banking as mere repositories of the
community's savings and lenders to creditworthy parties was soon to give way to the
concept of purposeful banking sub serving the growing and diversified financial
needs of planned economic development. The State Bank of India was destined to act
as the pacesetter in this respect and lead the Indian banking system into the exciting
Field of national development.
65

STATE BANK OF INDIA
Type UnAudited UnAuditid UnAudited UnAudited UnAudited
Operating income 113865.1 115414.6 97359.4 93774.7 88361.5
Interest on advance 79885.2 70565.6 64135.5 59017.1 54673.5
Income on Investment 28943.6 28452.6 28331.2 28744 29402.1
Interest on Balances 4970.6 16270.3 3524.8 3959.8 3441.2
Other Intersts 65.7 126.1 1367.9 2053.8 844.7
Other Income 8425.8 28943 18110.3 14337.6 17626
Total Income 122290.9 144357.6 115469.7 108112.3 105987.5
Interest Expanded -68891.2 -72213.3 -57846.1 -54788.2 -49520.6
Operating Expenses -29785.1 -32460.2 -29074 -28598.4 -28102.4
Payment for Employees -20263.7 -20238.8 -20297.1 -19547.1 -19242.9
Other Operating
Expenses -9521.4 -12221.4 -8776.9 -9051.3 -8859.5
Total Expenditure for
Banks -98676.3 -104673.5 -86920.1 -83386.6 -77623
Profit before tax 23614.6 39684.1 28549.6 24725.7 28364.5
Tax -7762.8 -10626.3 -6237.1 -6067.4 -7559.1
Tax provisions and
contingencies -1593.7 -14125.9 -11661.9 -6813.4 -12819.7
Profit after tax 14258.1 14931.9 10650.6 11844.9 7985.7
Net profit 14258.1 14931.9 10650.6 11844.9 7985.7
Equity Capital 5263 5263 5263 5263 5263
Reserves 305036.6 305036.6 271177.9 271177.9 271177.9
Percent of shares
Govt.of India 59.73 -- -- -- --
Capital Adequacy
Ratio in % 13.13 12.34 11.86 12.63 11.97
EPS 27.09 28.37 20.24 22.51 15.17
Price Fluctuations Of shares of State Bank Of India
1-Jun-07 1364 1385 1356 1379
66

4-Jun-07 1400 1418 1390 1406
5-Jun-07 1400 1445 1393 1437
6-Jun-07 1445 1454 1381 1390
7-Jun-07 1382 1402 1353 1361
8-Jun-07 1331 1387 1321 1357
11-Jun-07 1356 1379 1336 1340
12-Jun-07 1354 1354 1306 1332
13-Jun-07 1325 1333 1280 1290
14-Jun-07 1300 1326 1295 1314
15-Jun-07 1325 1349 1307 1324
18-Jun-07 1340 1345 1313 1319
19-Jun-07 1325 1378 1313 1372
20-Jun-07 1383 1430 1373 1424
21-Jun-07 1433 1465 1400 1447
22-Jun-07 1445 1478 1445 1455
25-Jun-07 1460 1460 1434 1450
26-Jun-07 1456 1466 1443 1457
27-Jun-07 1455 1468 1435 1447
28-Jun-07 1460 1475 1448 1471
29-Jun-07 1472 1532 1472 1526
2-Jul-07 1530 1551 1523 1531
3-Jul-07 1548 1590 1542 1582
4-Jul-07 1599 1620 1556 1564
5-Jul-07 1575 1578 1532 1547
6-Jul-07 1550 1799 1527 1551
9-Jul-07 1556 1580 1536 1571
10-Jul-07 1578 1580 1546 1551
11-Jul-07 1540 1557 1515 1541
12-Jul-07 1548 1569 1548 1559
13-Jul-07 1565 1584 1554 1560
16-Jul-07 1560 1618 1545 1612
17-Jul-07 1615 1625 1574 1583
18-Jul-07 1589 1589 1560 1576
19-Jul-07 1577 1608 1577 1596
20-Jul-07 1610 1620 1576 1584
23-Jul-07 1584 1591 1567 1585
24-Jul-07 1605 1608 1567 1576
25-Jul-07 1570 1584 1536 1569
26-Jul-07 1570 1575 1542 1552
27-Jul-07 1520 1528 1470 1499
30-Jul-07 1524 1615 1510 1578
31-Jul-07 1622 1636 1540 1624
67

SBI
1200
1225
1250
1275
1300
1325
1350
1375
1400
1425
1450
1475
1500
1525
1550
1575
1600
1625
1650
1675
1700
1725
1750
1775
1800
1825
1850
6/1/2007
6/6/2007
6/11/2007
6/16/2007
6/21/2007
6/26/2007
7/1/2007
7/6/2007
7/11/2007
7/16/2007
7/21/2007
7/26/2007
7/31/2007
For the Month of June & July 2007
Prices
Open
High
Low
Close
Graph No.5
Technical analysis of State Bank Of India: -
The chart of State Bank Of India is looking bullish and No Correction is seen from
the last two months and stock is in full movement and candle sticks is showing
positive sign for long term investment.
Fundamental: -
68

1. RBI has increased CRR by 0.5 %. It may affect the performance of Bank
2. Interest rate hike.
3. State Bank of India (SBI) has informed BSE that the Bank has decided to
revise interest rates on domestic term deposits rate with effect from August
09, 2007.
4. Government of India also thinking about the merger of subsidiaries of State
Bank of India with in it. It will make huge impact on SBI stock.
69

RESEARCH STUDY OF INVESTOR.
1) Where do you invest your money?
In the Reliance money, I have asked 200 people where you like invests your
money.
Investment types No. of respondents Percentage
Stock market 40 20
Bank F.D 60 30
Real estate 80 40
Mutual funds 20 10
Total 200 100
Table. 1
No. of respondents
20%
30%
40%
10%
Stock market
Bank F.D
Real estate
Mutual funds
Graph 6
Interpretation:
From the above table & pie chart, it represent that people invest only 20 % of money
in Stock market & 10% in Mutual Funds. 40% of people generally interested in Real
estate and Bank F.D 30%. Because the chances of risk and losses are minimum than
Stock Market & Mutual Funds. Even the returns are more in Stock Market & Mutual
Funds, but due safety people prefer Real estate and Band F.D.
70

How will you decide a company for investment?
Selection of company for
investment
No. of Respondents Percentage
Own Decision 30 15
Broker Advice 84 42
Speculation 46 23
Research Reports 40 20
200 100
Table 2
No. of Respondents
15%
42%
23%
20%
Own Decision
Broker Advice
Speculation
Research Reports
Graph 7
Interpretation: From the above table & pie chart it represents that 42% of people
take Advice of Broker while investment in stocks, and 23% of people invest on the
basis of speculation, and 20% on basis of Research Reports by Technical analyst and
15% invest on there own decision. But many experts feel that if people invest money
in stock market by Research Report then chances of profit is high and losses are
minimum because Research Report give good suggestion and already they have
calculated risk in stocks so it will be beneficial while investment. If investment on the
basis of speculation the chances of losses are high and profits minimum. If you do not
have, any knowledge of stock market so should ask to your Broker who will advice
you in better way because these people have good knowledge than us.
71

2) What kind of trading you do?
Types of Trading No. of Respondent Percentage
Intra day 86 43
Short term 44 22
Medium Trading 22 11
Long term Trading 48 24
200 100
Table 3
No. of Respondent
43%
22%
11%
24%
Intra day
Short term
Medium Trading
Long term Trading
Graph 8
Interpretation: From the above Graph & Pie chart it represent that 43% people
do intraday in which the profit and risk both are the high but many research
suggest that it is always better to investment of money in long term than short
term or medium term or intraday (i.e. speculations). If we invest money on long-
term basis then returns are good & the risk is minimum. Therefore, it is always
good invest money for long-term basis
72

2) What are the factors do you consider while selection of company?
Factor consider for
selection of company
No. of Respondents Percentage
Fundamental Analysis 86 43
Technical Analysis 44 22
Both 20 10
Speculation 50 25
200 100
Table 4
No. of Respondents
43%
22%
10%
25%
Fundamental Analysis
Technical Analysis
Both
speculation
Graph 9
Interpretation: From the above Graph & Pie chart it represent that 43% of
people take the help of fundamental and 22% of people take the help of technical
analysis by which the risk can be calculated and profit can be maximize.
However, even that 25% of people invest on the basis of speculation, which is
risky. 10% are people invest money by both (i.e. fundamentally and technical) by
which prediction can be good. If people invest money on the basis of analysis
then the risk can be minimize and profit can be maximize.
73

3) Where will you most prefer to invest your money?
Most prefer companies No. of Respondents Percentage
Large cap 105 52.5
Mid cap 40 20
Small cap 55 27.5
200 100
Table 5
No. of Respondents
52%
20%
28%
Large cap
Mid cap
Small cap
Graph 10
Interpretation: From the above Graph & table, we can say that 50% percent of
people like to invest money in Blue Chips companies because the volumes of trading
and good results are more. Therefore, the profit is more. Mid cap and small, give
minimum profit than blue chips or large cap.
74

4) Which Companies shares will you buy?
Like to invest in sectors No. of Respondent Percentage
I.T 110 55%
Banking 60 30%
Engineering 30 15%
200 100
Table 6
No. of Respondent
55%
30%
15%
I.T
Banking
Engineering
Graph 11
Interpretation: From the above Graph & chart, we can say that 55% of people prefer
I.T. Sector for investment because these companies are strong by fundamentally and
it have large market capitalization than others. After that, 30% of people prefer
banking sector it has large market capitalization and after that, 15% of people like to
invest in Engineering companies.
75

Finding
1. Infosys
With the reference to graph no.1, Technical analysis of script interprets that, wait &
watch because script forms interprets that after correction comes in stock it gets well
supported level.
Fundamental analysis interprets that EPS is per share Rs.19.96 in 2007
continues increasing last 5 year. Infosys fundamental analysis interprets that;
company gives equity dividend 300% this year.
It means that script is strong and investor should remain in stock for long
period. Returns are very good. The target price is Rs.2040.so there is an upside there,
the structure is positive but one needs to put a stop at around Rs 2020. Particular
stock has some news eg;-result, entering into new business, merger with other
company, & on basis of that news the price goes up or down.
2. Reliance Industries
With the reference to Graph no 2, Technical analysis of script interprets that, wait &
watch because script forms has always rising pattern over period. The fundamental
analysis interprets that; company gives equity dividend 100% this year. EPS is
Rs.20.5 per share. Reliance Industries shareholders & creditors approve Scheme of
Amalgamation. Gross Profit & Net Profit is also maintained. Reliance Industries
script is fundamentally strong. An investor should buy in current rally for long period.
Returns are very good. The starter price Rs 1945 so there is a structure is positive a
stop at around Rs. 1795.
76

3. ABB
With the reference to Graph no 3, Technical analysis of script interprets that, wait &
watch because script forms Stock Split.
ABB Ltd. Fundamentally is shows that are much fluctuation in EPS is Rs.20.44 per
share. Company has decided the dividend but not declared.
Fundamental analysis suggests that it has a split stock that s why this stock is very
good for buy for delivery .Investor can buy a stock for long period of time the target
price is Rs.1500.
4. L&T
With the reference to Graph no 4, The technical analysis of the script interprets that
buy in up trend rally because of script has always rising pattern over period. L& T in
this script I found that fundamental analysis that, company gives equity dividend
500% this year. EPS is Rs.24.95 per share. Company also offers the bonus share 1:1
per share in 2007.gross profit & net profit is consistent. Script is fundamentally
strong. Particular stock has some news e.g.;-result, entering into new business, merger
with other company, & on basis of that news the price goes up or down.
5. State Bank of India
With the reference to Graph no 5, Technical analysis of script interprets that, rising
pattern over period. State Bank of India Fundamental analysis interprets that EPS is
improving EPS is Rs.13.13 per Share. Bank also gives equity dividends 150% this
year. Particular stock has some news e.g.;-result, entering into new business, merger
with other company, & on basis of that news the price goes up or down.
77

Suggestion Chart
Script EPS Dividends Bonus Result CMP Target
Price
Stop-
Loss
Price
Infosys 19.96 300% -- Sale 1976 2040 2020
Reliance 20.5 100% -- ? HOLD 1894 1945 1795
ABB 20.44 -- -- Buy 1147 1500 1240
L & T 24.95 500% 1:1 Sale 2608 2750 2640
SBI 28.37 150% -- Buy 1624 1690 1630
SUGGESTION
Following are suggestions made based on study with reference to watch on NEAT
Screen, interaction with clients, data analysis and findings:
1. In IT sector Infosys is very good because it’s EPS is continuously increasing
and company have given 300 % dividend it means stock is strong by
fundamentally and technically it is also growing very well people should
invest in this stock
2. Reliance Industries is also looking strong by fundamentally and technically, in
future it is entering in to new business, merger with other company so this is
also good option for investment.
3. ABB is split stock, split-ratio was (4800/5) = 960 is split price that is why this
stock is very good for delivery due to split the price is down it was 4800
before split.
4. Technically L&T is in rising pattern, company offered the bonus share 1:1 per
share and gross profit and net profit is consistent. This is good stock for
investment
78

5. As the largest bank in India SBI is also very good for investment, EPS is also
increasing it will entering into new business and it will merger with other
banks (State Bank of Sourashtra) on the basis of this price goes up or down.
6. Share market is growing sectors if people invest money in stocks the returns
will be good than Bank F.D & Real Estate. People also should invest money
Mutual Funds as per return concerns.
7. If people invest money on Research reports or broker advice then chances of
risk is low and chances of return will be high.
8. It is always better to invest money on long term basis than intra day because
intraday is nothing but a speculation
9. If people consider both i.e. fundamental analysis and technical analysis then it
will be better than speculation
10. Currently IT sector is in boom so it is better to invest money in IT and also
good in Banking sector
79

CONCLUSION
With the help of project I concluded that blue chip companies are playing very
important role in the share market. Lot of investors is investing their money in the
blue chip companies. And this is the reason that the volume of blue chip companies is
high.
During this period of two months I came to know that in the process of equity
analysis of blue chip companies two weapons are playing a vital role i.e. Fundamental
Analysis and Technical Analysis.
The concept of Fundamental Analysis studies the performance of blue chip
companies. With the help of Fundamental Analysis can know the past performance of
the blue chip companies. Fundamental Analysis considers the long-term performance
of companies and this helps the investors to invest their money for long term as well
as can get the good returns.
Technical Analysis comprises short-term analysis of blue chip companies. Technical
Analysis really just studies supply and demand in the market in an attempt to
determine what direction or trend will continue in the future.
The study of technical as well as fundamental analysis can give detail information
about the well running companies in the market. Before investing in any company
one should study these two concepts.
80

LIMITATIONS OF STUDY
 To understand the overall working of share market, the period of 60 days is
not enough.
 Moreover, very few investor and agents have a detail knowledge of the study.
 A study is conducted in Nasik only, which restrict the scope of the study
 The data provided by the investor and the agents can’t be held true as 100%
correct.
 The study was conducted to understand with respect to fundamental and
technical analysis, which is a part of the equity share market.
81

 A to Z Analysis
 Dalal Streets
 www.bseindia.com
 www.nseindia.com
 www.reliancemoney.com
 www.moneycontrol.com
82

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