Equity Research Fundamental and Technical Analysis and Its Impact on Stock Prices With Reliance Money

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

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

4

INTRODUCTION

5

COMPANY PROFILE

6

OBJECTIVE AND RATIONALE

7

RESEARCH METHODOLOGY

8

DATA PRESENTATION

9

DATA ANALYSIS AND INTERPRETATION

10

FINDINGS

11

SUGGESTION AND CONCLUSION

12

LIMITATION OF STUDY

13

BIBLIOGRAPHY

14

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.

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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.

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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-ofart 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.

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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.

Division of Reliance Capital Reliance money

Equities, commodities, forex trading, services And distribution house for financial products

Reliance mutual fund

An asset management company-floating fund offers for retail participation

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Reliance General and life insurance

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.

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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.

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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.

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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: 01. 02. 03. 04. 05. 06. 07. 08. 09. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.

Economic Growth Populations Monsoons and Agriculture Production Natural resources and availability of raw material Industrial Productions Inflation Interest rate Foreign exchange reserve Balance of payment position Budget deficits Public debt and foreign debt Domestic saving and capital output rate Employments Taxation policies Infrastructure facilities Government policies Political Stability International developments Capital formations Saving pattern Economic indicators Foreign direct investments Rupee-Dollar Fluctuation Stock News

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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.

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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.

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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

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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 relevant because they illustrate patterns in price movements that often repeat themselves.

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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.

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.

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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:

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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 “ 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

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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.

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.

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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.

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 fiveyear 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.

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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.

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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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1

2

3

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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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”.

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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”.

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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.

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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 multilanguage-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.

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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

30-Sep-06

30-Jun-06

31-Mar-07 31-Dec-06

Description

Value {Rs.million} 35510 2550 38060 -25410 12650

35550 1200 36750 -24070 12680

34540 600 35140 -23050 12090

32730 660 33390 -22190 11200

28670 1290 29960 -19930 10030

Gross Profit

12650

12680

12090

11200

10030

Depreciation Profit before Tax Tax Provision and Cost. Profit after Tax Extraordinary Items Net Profit

-1340 11310 -1030

-1330 11350 -120

-1290 10800 -1220

-1100 -10100 -1140

-970 9060 -1040

-10280

10 11240

Net Sales Other income Total income Expenditure Operating Profit

-10280

Equity Capital Reserves EPS

2860 119040 18

Result Type

Q

-

--

-9580

--

8960

-30 7990

11240

9580

8960

60 8050

2860 108760 19.96

2790 93630 17.2

2780 82730 16.15

1380 76900 29.13

Q

Q

42

--

Q

Q

Price Fluctuations of Infosys Tech Date 1-Jun-07 4-Jun-07 5-Jun-07 6-Jun-07 7-Jun-07 8-Jun-07 11-Jun-07 12-Jun-07 13-Jun-07 14-Jun-07 15-Jun-07 18-Jun-07 19-Jun-07 20-Jun-07 21-Jun-07 22-Jun-07 25-Jun-07 26-Jun-07 27-Jun-07 28-Jun-07 29-Jun-07 2-Jul-07 3-Jul-07 4-Jul-07 5-Jul-07 6-Jul-07 9-Jul-07 10-Jul-07 11-Jul-07 12-Jul-07 13-Jul-07 16-Jul-07 17-Jul-07 18-Jul-07 19-Jul-07 20-Jul-07 23-Jul-07 24-Jul-07 25-Jul-07 26-Jul-07 27-Jul-07 30-Jul-07 31-Jul-07

Open 1933 1950 1920 1974 1847 1950 1974 1962 1715 1995 2030 2025 1990 1966 1954 1965 1951 1930 1931 1940 1950 1944 1950 1961 1931 1847 1989 1995 2000 1950 1932 1945 1940 1941 1948 2000 1974 1948 1976 1998 2001 2008 1990

High 1950 1969 1950 1974 1972 1975 1996 1999 1999 2031 2038 2029 1991 1974 1966 1965 1963 1948 1946 1948 1970 1955 1953 1961 1940 1977 2009 2042 2000 1960 1958 1955 1959 1955 2000 2019 1984 1980 2010 2050 2015 2010 2035

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Low 1932 1909 1908 1930 1847 1912 1970 1962 1715 1995 2000 1986 1942 1950 1935 1935 1919 1920 1928 1913 1920 1929 1935 1922 1910 1847 1986 1995 1925 1915 1922 1928 1934 1935 1946 1971 1931 1941 1945 1995 1962 1966 1955

Close 1939 1916 1943 1938 1957 1951 1980 1990 1989 2019 2009 1989 1957 1954 1958 1951 1937 1922 1935 1925 1929 1944 1947 1931 1917 1972 1994 2021 1930 1922 1940 1936 1939 1945 1997 1986 1948 1975 1989 2034 2008 1986 1976

2080 2060 2040 2020 2000 1980 1960 1940 1920 1900 1880 1860 1840 1820 1800 1780 1760 1740 1720 1700

Open High Low Close

6/ 1/ 2 6/ 007 6/ 6/ 200 11 7 / 6/ 200 16 7 / 6/ 200 21 7 / 6/ 200 26 7 /2 7/ 007 1/ 2 7/ 007 6/ 7/ 200 11 7 / 7/ 200 16 7 / 7/ 200 21 7 / 7/ 200 26 7 /2 00 7

Prices

infosys

June & july 2007

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.

44

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 forthcoming 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.

45

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

46

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.

47

Reliance Industries ltd.

Type

UnAudited

UnAudited

UnAudited

UnAudited

UnAudited

Date of begin

1-Apr-07

1-Jan-07

1-Oct-06

1-Jul-06

1-Apr-06

Date of End

30-Jun-07

31-Mar-07

31-Dec-06

30-Sep-06

30-Jun-06

Description

Value {Rs.million}

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 Result Type

23.4

20.5

20.1

19.4

18.3

Q

Q

Q

Q

Q

48

Price Fluctuations Share of Reliance Industries Date 1-Jun-07 4-Jun-07 5-Jun-07 6-Jun-07 7-Jun-07 8-Jun-07 11-Jun-07 12-Jun-07 13-Jun-07 14-Jun-07 15-Jun-07 18-Jun-07 19-Jun-07 20-Jun-07 21-Jun-07 22-Jun-07 25-Jun-07 26-Jun-07 27-Jun-07 28-Jun-07 29-Jun-07 2-Jul-07 3-Jul-07 4-Jul-07 5-Jul-07 6-Jul-07 9-Jul-07 10-Jul-07 11-Jul-07 12-Jul-07 13-Jul-07 16-Jul-07 17-Jul-07 18-Jul-07 19-Jul-07 20-Jul-07 23-Jul-07 24-Jul-07 25-Jul-07 26-Jul-07 27-Jul-07 30-Jul-07 31-Jul-07

Open 1773 1769 1739 1751 1673 1664 1800 1675 1698 1686 1700 1698 1672 1727 1735 1735 1708 1709 1699 1709 1700 1704 1676 1711 1718 1714 1703 1715 1717 1707 1730 1780 1789 1835 1823 1899 1880 1912 1895 1910 1920 1885 1865

High 1780 1769 1751 1758 1707 1698 1800 1712 1710 1703 1710 1698 1730 1749 1748 1735 1714 1720 1720 1715 1711 1712 1713 1732 1725 1731 1719 1715 1719 1725 1791 1789 1839 1839 1909 1915 1915 1931 1912 1949 1936 1899 1902 49

Low 1747 1739 1722 1682 1660 1647 1660 1663 1670 1685 1668 1667 1670 1722 1721 1699 1697 1700 1693 1686 1689 1679 1676 1709 1681 1685 1701 1695 1686 1707 1726 1767 1780 1804 1817 1881 1875 1908 1875 1906 1855 1840 1833

Close 1751 1742 1745 1691 1669 1657 1666 1699 1675 1696 1682 1672 1727 1733 1734 1705 1709 1703 1699 1692 1701 1684 1707 1718 1710 1710 1711 1703 1703 1719 1773 1777 1828 1823 1893 1892 1909 1913 1903 1942 1868 1849 1894

1965 1955 1945 1935 1925 1915 1905 1895 1885 1875 1865 1855 1845 1835 1825 1815 1805 1795 1785 1775 1765 1755 1745 1735 1725 1715 1705 1695 1685 1675 1665 1655 1645

Open High Low Close

01 -J u 07 n-0 -J 7 u 13 n-0 -J 7 u 19 n-0 -J 7 u 25 n-0 -J 7 u 29 n-0 -J 7 u 05 n-0 -J 7 u 11 l-0 -J 7 u 17 l-0 -J 7 u 23 l-0 -J 7 u 27 l-0 -J 7 ul -0 7

Prices

Reliance

June & July 2007

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.

50

Fundamental: 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.

51

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 DaimlerBenz 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%.

52

ABB LTD.

Type

Un audited

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

Description

Un audited Un audited Un audited

Value {Rs.million} 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

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

1337.33

2048.55

1267.43

1106.05

810.03

-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

Net Sales

Operating Profit

Profit before Tax Tax

EPS Result Type

20.44

31.84

19.38

16.97

12.11

Q

Q

Q

Q

Q

53

Price Fluctuations Shares of ABB Co. Ltd Date 1-Jun-07 4-Jun-07 5-Jun-07 6-Jun-07 7-Jun-07 8-Jun-07 11-Jun-07 12-Jun-07 13-Jun-07 14-Jun-07 15-Jun-07 18-Jun-07 19-Jun-07 20-Jun-07 21-Jun-07 22-Jun-07 25-Jun-07 26-Jun-07 27-Jun-07 28-Jun-07 29-Jun-07 2-Jul-07 3-Jul-07 4-Jul-07 5-Jul-07 6-Jul-07 9-Jul-07 10-Jul-07 11-Jul-07 12-Jul-07 13-Jul-07 16-Jul-07 17-Jul-07 18-Jul-07 19-Jul-07 20-Jul-07 23-Jul-07 24-Jul-07 25-Jul-07 26-Jul-07 27-Jul-07 30-Jul-07 31-Jul-07

Open 4627 4769 4680 4769 4510 4510 4570 4520 4501 4444 4525 4554 4625 4699 4661 4730 4726 4670 4800 960 1050 1104 1119 1150 1130 1090 1137 1125 1090 1100 1134 1135 1120 1088 1060 1077 1076 1165 1131 1144 1125 1063 1080

High 4758 4769 4702 4769 4598 4615 4595 4579 4535 4500 4584 4665 4648 4699 4750 4779 4800 4819 4841 1055 1100 1145 1134 1150 1130 1142 1150 1125 1117 1125 1145 1137 1120 1096 1085 1089 1149 1175 1145 1150 1125 1099 1153

54

Low 4603 4652 4610 4500 4502 4481 4505 4475 4370 4420 4470 4525 4590 4627 4651 4700 4676 4670 4751 950 958 1094 1116 1105 1091 1090 1109 1103 1083 1090 1120 1098 1081 1055 1060 1067 1065 1125 1117 1120 1051 1046 1072

Close 4698 4666 4631 4579 4554 4531 4520 4537 4408 4485 4516 4603 4611 4657 4724 4726 4701 4792 4767 1036 1094 1111 1126 1121 1111 1133 1115 1107 1087 1117 1125 1113 1085 1071 1076 1072 1138 1148 1134 1132 1079 1070 1147

5100 4950 4800 4650 4500 4350 4200 4050 3900 3750 3600 3450 3300 3150 3000 2850 2700 2550 2400 2250 2100 1950 1800 1650 1500 1350 1200 1050 900

Open High Low Close

6/ 1/ 2 6/ 00 6 7 6 / /2 0 11 0 7 6/ /20 16 07 6/ /20 21 07 6/ /20 26 07 /2 7/ 00 1/ 7 2 7/ 00 6 7 7 / /2 0 11 0 7 7/ /20 16 07 7/ /20 21 07 7/ /20 26 07 7/ /20 31 07 /2 00 7

Prices

ABB

For the Month of June & July 2007

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. 55

STOCK SPLIT

4950 4850 4750 4650 4550 4450 4350 6/ 1/ 0 6/ 7 4/ 0 6/ 7 7 6/ /07 10 6/ /07 13 6/ /07 16 6/ /07 19 6/ /07 22 6/ /07 25 /0 7

Prices

ABB

For the month of june 2007

Open High Low Close

1200 1150 1100 1050 1000 950 900 6/ 28 / 7/ 07 1/ 7/ 07 4/ 7/ 07 7 7/ /07 10 7/ /07 13 7/ /07 16 7/ /07 19 7/ /07 22 7/ /07 25 7/ /07 28 7/ /07 31 /0 7

Prices

ABB

Fot the month of July 2007

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.

56

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.

57

LARSON AND TOUBRO LTD. (L & T)

Type

Unaudited

Audited

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

Description

Unaudited Unaudited Unaudited

Value {Rs.million}

Gross Sales Excise Duty Net Sales Other income

45738.7 -686.6 45052.1 2114.7

63657.4 -1175 62482.4 2041.4

41995.1 -810.9 41184.2 1279.3

38043 -682.3 37360.7 1117.3

35318.3 -549.3 34769 474.3

Total income

47166.8

64523.8

42463.5

38478

35243.3

-40821.6 6345.2 -157.2

-54384 10139.8 -63.3

-36928.9 5534.6 -12.2

-34978.8 3499.2 -106.1

-32328.6 2914.7 -157.7

6188

10076.5

5522.4

3393.1

2757

-424.1 5763.9 -1995.4

-698.1 9378.4 -2370.7

-356.7 5165.7 -1726.7

-336.4 3056.7 -1044.5

-308.9 2448.1 -876.8

Profit after Tax

3768.5

7007.7

3439

2012.2

1571.3

Net Profit Equity Capital

3768.5 567.6

7007.7 566.5

3439 561.1

2012.2 280

1571.3 278.3

Expenditure Operating Profit Interest Gross Profit Depreciation Profit before Tax Tax

EPS Result Type

13.3

24.95

12.27

14.39

11.37

Q

Q

Q

Q

Q

58

Price Fluctuations of shares of Larson & Toubro Ltd. Date 1-Jun-07 4-Jun-07 5-Jun-07 6-Jun-07 7-Jun-07 8-Jun-07 11-Jun-07 12-Jun-07 13-Jun-07 14-Jun-07 15-Jun-07 18-Jun-07 19-Jun-07 20-Jun-07 21-Jun-07 22-Jun-07 25-Jun-07 26-Jun-07 27-Jun-07 28-Jun-07 29-Jun-07 2-Jul-07 3-Jul-07 4-Jul-07 5-Jul-07 6-Jul-07 9-Jul-07 10-Jul-07 11-Jul-07 12-Jul-07 13-Jul-07 16-Jul-07 17-Jul-07 18-Jul-07 19-Jul-07 20-Jul-07 23-Jul-07 24-Jul-07 25-Jul-07 26-Jul-07 27-Jul-07 30-Jul-07 31-Jul-07

Open 2005 2025 1979 1925 1901 1901 1900 1927 1910 1965 1933 1949 1942 2003 2005 2105 2108 2180 2165 2147 2163 2230 2265 2283 2300 2335 2365 2435 2379 2400 2400 2400 2439 2395 2341 2410 2480 2695 2666 2570 2500 2420 2461

High 2028 2030 1979 1990 1940 1920 1929 1929 1921 1965 1966 1969 2003 2035 2150 2125 2199 2180 2165 2166 2207 2278 2298 2320 2364 2388 2428 2435 2415 2417 2450 2434 2439 2395 2419 2500 2669 2732 2666 2635 2530 2500 2630

59

Low 1985 1966 1937 1915 1879 1865 1881 1881 1860 1880 1930 1919 1924 2003 2005 2087 2056 2142 2135 2127 2160 2207 2241 2245 2300 2330 2365 2380 2363 2367 2393 2388 2376 2296 2338 2395 2447 2617 2540 2506 2400 2370 2461

Close 2000 1972 1945 1921 1897 1885 1892 1907 1868 1924 1948 1927 1996 2027 2105 2108 2174 2160 2144 2154 2198 2235 2261 2293 2331 2365 2416 2389 2381 2378 2400 2415 2392 2330 2380 2479 2625 2670 2569 2545 2420 2443 2608

2800 2750 2700 2650 2600 2550 2500 2450 2400 2350 2300 2250 2200 2150 2100 2050 2000 1950 1900 1850 1800 7 -0

7 07

-2 7

-0

7 07

-2 0

-0

7 -1 3 07

07

-0 6

-0

-0

7 06

-2 9

-0

7 06

-2 2

-0

7 -1 5

-0 06

-0 8

-0 06

-0 1 06

7

Open High Low Close

7

Prices

LNT

For the month of June & July 2007

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.

60

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.

61

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 62

(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.

63

Type

Date of begin Date of End

STATE BANK OF INDIA UnAudited UnAuditid UnAudited UnAudited 1-Apr-07

UnAudited

1-Jan-07

1-Oct-06

1-Jul-06

1-Apr-06

30-Jun-07 31-Mar-07

31-Dec-06

30-Sep-06

30-Jun-06 88361.5 54673.5 29402.1

Description Operating income Interest on advance Income on Investment

113865.1 79885.2 28943.6

Value {Rs.million} 115414.6 97359.4 93774.7 70565.6 64135.5 59017.1 28452.6 28331.2 28744

Interest on Balances Other Intersts Other Income Total Income

4970.6 65.7 8425.8 122290.9

16270.3 126.1 28943 144357.6

3524.8 1367.9 18110.3 115469.7

3959.8 2053.8 14337.6 108112.3

3441.2 844.7 17626 105987.5

Interest Expanded Operating Expenses Payment for Employees Other Operating Expenses Total Expenditure for Banks Operating Profit Profit before tax

-68891.2 -29785.1 -20263.7

-72213.3 -32460.2 -20238.8

-57846.1 -29074 -20297.1

-54788.2 -28598.4 -19547.1

-49520.6 -28102.4 -19242.9

-9521.4

-12221.4

-8776.9

-9051.3

-8859.5

-98676.3 23614.6 23614.6

-104673.5 39684.1 39684.1

-86920.1 28549.6 28549.6

-83386.6 24725.7 24725.7

-77623 28364.5 28364.5

-7762.8

-10626.3

-6237.1

-6067.4

-7559.1

-1593.7 14258.1 14258.1 5263 305036.6

-14125.9 14931.9 14931.9 5263 305036.6

-11661.9 10650.6 10650.6 5263 271177.9

-6813.4 11844.9 11844.9 5263 271177.9

-12819.7 7985.7 7985.7 5263 271177.9

Tax Tax provisions and contingencies Profit after tax Net profit Equity Capital Reserves Percent of shares Govt.of India Capital Adequacy Ratio in % EPS Result Type

59.73

--

--

--

--

13.13

12.34

11.86

12.63

11.97

27.09 Q

28.37 Q

20.24 Q

22.51 Q

15.17 Q

64

Price Fluctuations Of shares of State Bank Of India Date 1-Jun-07 4-Jun-07 5-Jun-07 6-Jun-07 7-Jun-07 8-Jun-07 11-Jun-07 12-Jun-07 13-Jun-07 14-Jun-07 15-Jun-07 18-Jun-07 19-Jun-07 20-Jun-07 21-Jun-07 22-Jun-07 25-Jun-07 26-Jun-07 27-Jun-07 28-Jun-07 29-Jun-07 2-Jul-07 3-Jul-07 4-Jul-07 5-Jul-07 6-Jul-07 9-Jul-07 10-Jul-07 11-Jul-07 12-Jul-07 13-Jul-07 16-Jul-07 17-Jul-07 18-Jul-07 19-Jul-07 20-Jul-07 23-Jul-07 24-Jul-07 25-Jul-07 26-Jul-07 27-Jul-07 30-Jul-07 31-Jul-07

Open 1364 1400 1400 1445 1382 1331 1356 1354 1325 1300 1325 1340 1325 1383 1433 1445 1460 1456 1455 1460 1472 1530 1548 1599 1575 1550 1556 1578 1540 1548 1565 1560 1615 1589 1577 1610 1584 1605 1570 1570 1520 1524 1622

High 1385 1418 1445 1454 1402 1387 1379 1354 1333 1326 1349 1345 1378 1430 1465 1478 1460 1466 1468 1475 1532 1551 1590 1620 1578 1799 1580 1580 1557 1569 1584 1618 1625 1589 1608 1620 1591 1608 1584 1575 1528 1615 1636

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Low 1356 1390 1393 1381 1353 1321 1336 1306 1280 1295 1307 1313 1313 1373 1400 1445 1434 1443 1435 1448 1472 1523 1542 1556 1532 1527 1536 1546 1515 1548 1554 1545 1574 1560 1577 1576 1567 1567 1536 1542 1470 1510 1540

Close 1379 1406 1437 1390 1361 1357 1340 1332 1290 1314 1324 1319 1372 1424 1447 1455 1450 1457 1447 1471 1526 1531 1582 1564 1547 1551 1571 1551 1541 1559 1560 1612 1583 1576 1596 1584 1585 1576 1569 1552 1499 1578 1624

1850 1825 1800 1775 1750 1725 1700 1675 1650 1625 1600 1575 1550 1525 1500 1475 1450 1425 1400 1375 1350 1325 1300 1275 1250 1225 1200

Open High 7/31/2007

7/26/2007

7/21/2007

7/16/2007

7/11/2007

7/6/2007

7/1/2007

6/26/2007

6/21/2007

6/16/2007

6/11/2007

6/6/2007

Low 6/1/2007

Prices

SBI

Close

For the Month of June & July 2007 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.

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Fundamental: 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.

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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 Stock market Bank F.D Real estate Mutual funds Total

No. of respondents 40 60 80 20 200 Table. 1

Percentage 20 30 40 10 100

No. of respondents

10%

20% Stock market Bank F.D Real estate Mutual funds

40% 30%

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.

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How will you decide a company for investment? Selection of company for investment Own Decision Broker Advice Speculation Research Reports

No. of Respondents

Percentage

30 84 46 40 200

15 42 23 20 100

Table 2 No. of Respondents

15%

20%

Own Decision Broker Advice Speculation Research Reports 23% 42%

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.

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2) What kind of trading you do? Types of Trading Intra day Short term Medium Trading Long term Trading

No. of Respondent 86 44 22 48 200

Percentage 43 22 11 24 100

Table 3 No. of Respondent

24% 43%

Intra day Short term Medium Trading Long term Trading

11% 22%

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 longterm basis then returns are good & the risk is minimum. Therefore, it is always good invest money for long-term basis

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2) What are the factors do you consider while selection of company? Factor consider for selection of company Fundamental Analysis Technical Analysis Both Speculation

No. of Respondents

Percentage

86 44 20 50 200

43 22 10 25 100

Table 4 No. of Respondents

25% 43%

Fundamental Analysis Technical Analysis Both speculation

10% 22%

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.

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3) Where will you most prefer to invest your money? Most prefer companies Large cap Mid cap Small cap

No. of Respondents 105 40 55 200

Percentage 52.5 20 27.5 100

Table 5

No. of Respondents

28%

Large cap Mid cap 52%

Small cap

20%

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.

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4) Which Companies shares will you buy?

Like to invest in sectors I.T Banking Engineering

No. of Respondent 110 60 30 200 Table 6

Percentage 55% 30% 15% 100

No. of Respondent

15%

I.T Banking Engineering 55%

30%

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.

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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.

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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.

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Suggestion Chart Script

EPS

Dividends

Bonus

Result

CMP

Target Price

Infosys

19.96

300%

--

Sale

1976

2040

StopLoss Price 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

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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

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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.

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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.

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A to Z Analysis



Dalal Streets



www.bseindia.com



www.nseindia.com



www.reliancemoney.com



www.moneycontrol.com

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