1.1. Industry Profile

CHAPTER I
1.1. Industry Profile

Stock market is a market where trading of company stocks, other securities and derivatives takes
place. Stock exchanges are corporations or mutual organizations, which are specialized in trading
stocks and securities. All sorts of company stocks are enrolled in the stock exchanges. Some of
the stock markets in India are listed below:
!angalore Stock "xchange
#umbai $!ombay% Stock "xchange
&alcutta Stock "xchange
'elhi Stock "xchange
#adras Stock "xchange
(ational Stock "xchange
#umbai $!ombay% stock exchange is India)s first stock exchange. It was founded in *+,- with
total number of listed stocks being more than .,///. In India there are total 00 stock exchanges
operating across the country. 1he (ational Stock "xchange $(S"% is situated in #umbai 1he
small and medium sized companies can list their stocks in 2ver 1he &ounter "xchange of India
$21&"I%.1he Securities and "xchange !oard of India $S"!I% regulates the functioning of capital
market and protects the interests of the investors. It is situated in #umbai. Some functions of
S"!I are as follows: 3egulation of working in stock exchanges and other securities markets.
3egistration and regulation of the operation of collective investment plans, including
mutual funds.
Inhibition of fallacious and unfair business practices in the securities markets.
&ontrolling accomplishment of shares and takeover of companies.
1
Stock exchange means any body of individuals, whether incorporated or not, constituted for the
purpose of regulating or controlling the business of buying, selling or dealing in securities.
1hese securities include:
$i% Shares, scrip, stocks, bonds, debentures stock or other marketable securities of a like nature in
or of any incorporated company or other body corporate4
$ii% 5overnment securities4 and
$iii% 3ights or interest in securities.
History of stock market in India
1he working of stock exchanges in India started in *+,-. !S" is the oldest stock market in India.
1he history of Indian stock trading starts with 6*+ persons taking membership in (ative Share
and Stock !rokers Association, which we now know by the name !ombay Stock "xchange or
!S" in short. In *7.-, !S" got permanent recognition from the 5overnment of India. (ational
Stock "xchange comes second to !S" in terms of popularity. !S" and (S" represent
themselves as synonyms of Indian stock market.
1here are 06 recognised stock exchanges in India !ombay Stock "xchange ,(ational Stock
"xchange, Ahmadabad Stock "xchange, !angalore Stock "xchange,
!hubaneswar Stock "xchange, &alcutta Stock "xchange, 'elhi Stock "xchange,
5uwahati Stock "xchange, 8yderabad Stock "xchange ,9aipur Stock "xchange,
:udhiana Stock "xchange, &ochin Stock "xchange, &oimbatore Stock "xchange,
#adhya ;radesh Stock "xchange, #agadh Stock "xchange, #adras Stock "xchange,
#angalore Stock "xchange, #eerut Stock "xchange ,21& "xchange 2f India
;une Stock "xchange, Saurashtra <utch Stock "xchange, =ttar ;radesh Stock "xchange,
>adodara Stock "xchange.
Bombay Stock Excan!e "BSE#
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!ombay Stock "xchange is known to be the oldest stock exchange in the entire Asian region. If
someone wants to know about the history of the India share market, it becomes synonymous with
the history of the !ombay Stock "xchange. It started functioning in *+,- with the name ?1he
(ative Share and Stock !roker?s Association?. =nder the Securities &ontracts $3egulation% Act,
*7-., the association got its recognition as a stock exchange in *7-.. @hen it started, it was Aust
an association of persons but with the recognition it got transferred to a corporate and
demutualised entity.
!ombay Stock "xchange happens to be the number * exchange globally in terms of the number
of listed companies and ranks -th in terms of the transactions worldwide. An investor has the
option of choosing from more than B,,// listed companies C which are segmented into A, !, S, 1
and D groups for easy reference.
1he main index of !S" is known as the !S" S"(S"E or simply S"(S"E $Sensitivity Index%. It
is an index which comprises of 6/ financially sound company scrips, with an option to be
reviewed and modified from timetotime. 1he index calculation is based on the ?Freefloat
#arket &apitalization? methodology. :eading bourses like the 'ow9ones also follow this
methodology. &urrently the Sensex is hovering around the *,,/// mark, all expected to touch
0/< by 0/*/. !ut then volatility has its important role to spoil the entire game. 1he market
capitalization of the !ombay Stock "xchange was over one trillion dollars as on #ay 0//7.
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$ational Stock Excan!e "$SE#
(ational Stock "xchange $(S"% is considered to be the leader in the stock exchange scenario in
terms of the total volume traded. 1he market capitalization the (ational Stock "xchange touched
about G70*.6* billion at the end of #ay 0//7.
1he (ational Stock "xchange received the recognition of a stock exchange in 9uly *776 under
Securities &ontracts $3egulation% Act, *7-.. 1he products that are traded in the (ational Stock
"xchange are:
"Huity or Share
Futures $both index and stock%
2ptions $&all and ;ut%
@holesale 'ebt #arket
3etail 'ebt #arket
(S" has a fully automated screen based trading system which is known as the ("A1 system.
1he transactions are carried on with speed, efficiency, and are all transparent. 1he risk
management system of the (ational Stock "xchange is world class and can be considered as the
benchmark for other bourses.
1he leading index of (S" is known as (ifty -/ or Aust (ifty. It comprises of -/ diversified
benchmark Indian company scrips and is constructed on the basis of weighted average market
capitalization method.
Tradin!
"ach stock exchange has certain listed securities which are traded on it. Investors interested in
buying and selling of securities should place their orders with the members$or brokers% of the
exchange. 1here are two ways of organizing the trading activity C
open outcry system
screen based system
%&en %utcry System
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under this system, traders shout and resort to signals on the trading floor of the exchange which
consists of several notional trading posts for different securities.A member wishing to buy or sell
a certain security reaches the trading post where the security is traded. !uyers make their bids
and sellers make their offers and bargains are closed at mutually agreed upon prices.
Screen based system
It basically involves trading through the computer screen.the kind of screen based trading system
adopted in india is open electronic limit order book $":2!% market system.
Internet tradin!
(ow investors have the facility of opening an electronic trading account and buy and sell
securities through the internet. <arvy was the first company to launch online trading in *777.
1he present maAor players in the industry are 3eliance #oney, I&I&I 'irect.com, 8'F&
S"&.com, -;AIS".com, kotakstreet.com, @AI0@"A:18 and I('IA!=::S.
"lectronic trading eliminates the need for physical trading floors. !rokers can trade from their
offices, using fully automated screenbased processes. 1heir workstations are connected to a
Stock "xchange?s central computer via satellite using >ery Small Aperture 1erminus "'SATs#.
1he orders placed by brokers reach the "xchange?s central computer and are matched
electronically.
Index
Index is a comprehensive measure of market trends, intended for investors who are concerned
with general stock market price movements. An Index comprises stocks that have large liHuidity
and market capitalization. "ach stock is given a weight age in the Index eHuivalent to its market
capitalization. At the (S", the capitalization of (IF1I $fifty selected stocks% is taken as a base
capitalization, with the value set at *///. Similarly, !S" Sensitive Index or Sensex comprises 6/
selected stocks. 1he Index value compares the day?s market capitalization visJvis base
capitalization and indicates how prices in general have moved over a period of time.
Stock market popularity is gradually gaining ground since 0//B and it was peaked in late
0//,. Sensex rise is directly proportional to investor)s interest and vice versa. Stock market
5
popularity is gradually declining in Ahmedabad in the last *0 months while it is unchanged in
Surat and #umbai.
In(estment industry in India
"merging strong even during the scariest phase of global financial meltdown, India has become
one of the favorite investment destinations for the foreign investors across the globe. 1he
investment scenario in India is getting better and better with each passing day due to high
confidence level of the investors. 1oday, India is considered the Bth biggest economy in the
world. Its impressive 5'; rate, especially in the field of purchasing power, has catapulted it to
second position among all the developing nations.
According to forecasts, Indian economy will grow to become ./K in size of the economy of =S.
It will also witness macrolevel stability in economic conditions. !ehind all this, investment can
be said to be the key player.@arren !uffett has always mentioned that investment in India should
always be a longterm story as the industry has been growing from an emerging market to a
developed one. 1he next */ years in India will surely give good returns. India?s 5'; growth
would be around ..-K to ,K in 0/*/. 1he sustainable growth rate of India would however hover
around ,K. !efore becoming a mature economy, India has another 0/ to B/ years to spare.
Current In(estment Scenario in India
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5lobalization and Foreign 'irect Investment form an integral part of all the developed as
well as developing economies. In fact, the growth of the underdeveloped economies is also
dependant on these key factors. 1hese components eHuip any nation with new skills, new items
and provide smooth access to markets and technology. 1oday, every nation across the globe is
looking for foreign and overseas investors. @hether it?s India or &hina, everyone wants foreign
investments. According to recent trends, India is only second to &hina in the league of favorite
investment destinations.
In the report issued by 'epartment of Industrial ;olicy and ;romotion, the fund inflow to
India reached =SG 0,.6 billion in the period 0//+/7, considered from the month of April 0//+
to the month of #arch 0//7. :ast Huarter of 0//+/7 alone witnessed an inflow of approx. =SG
..0 billion.In the reports issued by 3eserve !ank of India for outward investment from India, a
growth of 07..K to =SG*,.B billion has been seen in the period 0//,/+. 1he figures do not
include individuals and banks. India is considered the 0nd highest foreign employer in the =nited
<ingdom after the =nited States.
)lobal In(estment Scenario
Along with India, the others who are participating in the race of investment among the
developing economies are &hina, Singapore, #alaysia, 3ussia and !razil. #ost of them are
vying for contracts from =SA and "urope.
Stock *arket &o&ularity
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1.+. Com&any Profile
8
1.+.1, Back !round and Ince&tion of te Com&any
&onsortium securities was founded in *770 with Aust 'S" trading membership.
It was promoted by a group of professionals having background in fund and nonfund
based financial services. 1he founders were:
*r P.S. -alra
1he &hairman, #r ;. S. <alra is one of the leading luminaries of the stock broking arena of the
northern region. A chartered accountant by Hualification, #r <alra has had extensive experience
in taxation, finance and company law before entering the stock broking field. 8e was the
Founder 'irector of &onsortium Finance :td., a leading nonbanking finance company in (orth
India. 8e is also a member of the institute of internal auditors.
*r Roit Arora
#r 3ohit Arora is a chartered accountant with over 0/ years of experience in nonfund based
financial services. 8e has advised Fortune */// corporations on their India entry strategy
including identifications, negotiations and selection of Aoint venture partners.
#r Arora is also the Founder 'irector of A3 &redit Information Services, "valuation,
#onitoring and ;rocess 2utsourcing &ompany. 1his company has been carrying out outsourcing
processes of leading #ultinational !anks and 1elecom &ompanies for nearly a decade.8e was
earlier the #anaging 'irector of AlA &apital India ;vt. :td $#ember &ompany of AI5
American International 5roup%. 8e was also a consultant with A F Ferguson L &o.
*r P -urana
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8e is a chartered accountant $fellow member of the Institute of &hartered Accountants of India
and Institute of &hartered Accountants, "ngland and @ales% with over 0+ years of experience.
8e was the #anaging director of "ternit "verest :td., #ember of !elgian "ternit 5roup. #r
<hurana was also the prinicipal with A.F. Ferguson L &ompany for eight years.
.ate *r /ee&ak Co0dary
8e was a chartered accountant $fellow member of the Institute of &hartered Accountants of
India% having over *. years of experience in audit, taxation, finance and company law matters.
#r &howdhary was also the ;resident of the 'elhi Stock "xchange during the year *77,7+.
1.+. +. $ature of Business carried
&onsortium securities is one of the broking houses in india which provides a wide range of
services to a substantial and diversified client base that includes retail clients, high networth
individuals, corporates and financial institutions.
&onsortium Securities provides onlineMoffline eHuity L derivative trading facilities. In addition to
the research reports, clients can access a multitude of resources like live Huotes, charts, research,
advice, and online assistance that helps clients to take informed decisions.
1hey are now members of all maAor exchanges in India namely (S", !S", #&E, (&'"E, (S"
&urrency L #&ESE. In addition to this, they are also a depository participant with (S':.
1.+.1. 'ision2 *ission and 3uality Policy
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'ision
N1o build consortium securities as a globally trusted brand in the financial services domain).
*ission
1o create value and wealth for all customers through worldclass Huality services and to be the
most trusted and preferred financial service company with due diligence and transparency.
3uality &olicy
1hey are committed to distinctive culture and core values, which always place client?s
interests first.
2ur values emphasize integrity, transparency, commitment to excellence and teamwork.
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1.+. 4. PR%/4CT PR%5I.E
1he company offers varied services like:
*. "Huity and derivatives trading
0. Futures and options services
6. 'epository and demat services
B. &urrency trading
-. #utual funds
.. &ommodities trading
E34IT6 A$/ /ERI'ATI'ES
&onsortium Securities provides onlineMoffline eHuity L derivative trading facilities for investors
who are looking for the ease and convenience and hassle free trading experience. Its state of the
art technology $fiber connections, >SA1 network powered by !harti, 2'I( trading engine, etc%
ensure its clients the fastest and smoothest trade execution.
In addition to their research reports, you can access a multitude of resources like:
:ive Huotes
&harts
3esearch
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Advice
2nline assistance
'erivative products are structured in manner so as to curtail the risk exposure of an
investor. Index futures and stock options are instruments that enable you to hedge your
portfolio or open positions in the market. 2ption contracts allow you to ride your profits
while at the same time limit the downside risk.
Ed!e,
;an India Footprint $especially strong in (orth India%
(ews flow L distribution C consortium have their ears to the ground and makes sure that
they pass this on to other local branches, associates and clients.
Integrity L "thical !usiness ;ractices
Flexibility to trade anywhereManytime $onlineMoffline%
/EP%SIT%R6
&onsortium Securities ;rivate :imited offers you depository accounts and dematerialization
services as a depository participant in (S':. (S': provides you a Huick, secure and hassle free
alternative to holding the securities in physical form.
5acilities offered,
:ive 2nline !ack 2ffice
'ematerialization Services
Inter and Intra depository transfer services
"lectronic execution of 'IS slips
&onfirmation S#S) from (S': when stock moves inMout of your 'epository account.
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C4RRE$C6 TRA/I$)
&urrency trading was introduced in India in 0//+ and is one of the fastest growing segments.
&onsortium Securities ;rivate :imited is a member of both the currency exchanges (S"
&urrency as well as #&ESE &urrency.
Ed!e,
;an India footprint
1rade "Huities and &urrencies in the same account and hedge your foreign currency
exposure
2nlineM2ffline trading on 2'I( as well as (2@ $new (S"I1 platform%
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C%**%/ITIES
As a member of #&E L (&'"E, &onsortium Securities provide onlineMoffline commodities
trading facilities for investors who are looking for the ease and convenience and hassle free
trading experience. Its state of the art technology $fiber connections, >SA1 network powered by
!harti, 2'I( trading engine, etc% ensure clients the fastest and smoothest trade execution.
Ed!e,
;an India footprint
"thical business practices
Single 1rading ;latform $2'I( powered by Financial 1echnologies% for all your
&ommodities trading
1rade Anywhere L Anytime C &onvenience of trading online from home or
callingMvisiting a local office.
;owerful research and analytics C Intraday trading tips on Iahoo #essenger L via S#S
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*4T4A. 54$/S SER'ICES
&onsortium securities #utual Fund distribution division offers you the opportunity to diversify
your investment portfolio. (ot only do they offer a choice of investment schemes from all maAor
mutual fund provides, they take this a step further by helping investors chose the best mutual
fund based on their investment needs.
Ed!e,
;an India Footprint $especially strong in (orth India%
Schemes of all maAor fund houses available
Access to latest news and Fund #anager view
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1.+. 7. Area of o&eration.
&onsortium securities provides a wide range of services nationwide to a substantial and
diversified client base that includes retail clients, high net worth individuals, corporates and
financial institutions.
It has presence in more than *// locations through its network of longstanding franchisees and
sub brokers.
Cor&orate office.
'*, Sector6,
(oida 'ist.: 5autam !udh (agar,
=ttar ;radesh 0/*6/*,
;h: $*0/% 66.*-///7.
Re!istered %ffice
6. Sant (agar,
(ear "ast of <aliash,
(ew 'elhi C **//.-,
;h: $/**%6/+B-/**M*0, $/**%0.B00B*0M*6
Fax: $/**% 0.00B*/+.
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Some of the branch offices are located in:
&handigarh
'elhi
8aryana
8imachal ;radesh.
<arnataka.
3aAasthan
=ttar ;radesh
@est !engal.
1.+.8. %0nersi& &attern.
&onsortium securities is a private limited company dealing in the stock broking. It was
promoted by a group of professionals. 1he founder members are
*r Roit Arora
*r P -urana
.ate *r /ee&ak Co0dary
*r P.S. -alra
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1.+.9.Com&etitors information
&onsortium securities is not the only firm carrying on the business of stock broking.there are
many competitors,the profile of the maAor ones are given below.
-ar(y Stock Brokin! .td,
<arvy was established as karvy and company by five chartered accountants during the year
*7,7+/, and then its work was confined to audit and taxation only. :ater on it diversified into
financial and accounting services. <arvy became a known name during the year *7+-+. when it
forayed into capital market as registrar.
Reli!are Securities,
3eligare is a global financial services group with a presence across Asia, Africa, #iddle "ast,
"urope and the Americas. In India, 3eligare)s largest market, the group offers a wide array of
products and services ranging from insurance, asset management, broking and lending solutions
to investment banking and wealth management. 1he group has also pioneered the concept of
investments in alternative asset classes such as arts and films .@ith */,/// plus employees
across multiple geographies, 3eligare serves over a million clients, including corporates and
institutions, high net worth families and individuals, and retail investors.
3eligare "nterprises :imited is part of a family of companies that fall under the broader 3eligare
brand, which includes other global businesses such as diagnostics, aviation and travel, wellness
retail, and I1 products and solutions. A diversified financial services group 3eligare "nterprises
:imited $3":% offers a comprehensive suite of customerfocused financial products and services
targeted at retail investors, high net worth individuals and corporate and institutional clients.
3":, along with its Aoint venture partners, offers a range of products and services in India,
including asset management, life insurance, wealth management, eHuity and commodity broking,
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investment banking, lending services, private eHuity and venture capital. 3eligare has also
ventured into the alternative investments sphere through its holistic arts initiative and film fund.
3eligare Securities :imited $3S:%, a *//K subsidiary of 3eligare "nterprises :imited is a
leading eHuity and securities firm in India. 1he company currently handles sizeable volumes
traded on (S" and in the realm of online trading and investments4 it currently holds a reasonable
share of the market.
-otak Securities,
<otak #ahindra is one of India?s leading financial conglomerates, offering complete financial
solutions that encompass every sphere of life. From commercial banking, to stock broking, to
mutual funds, to life insurance, to investment banking, the group caters to the financial needs of
individuals and corporates.
<otak Securities :td., a *// K subsidiary of <otak #ahindra !ank is one of the oldest and
largest broking firms in the industry. 1heir offerings include stock broking through the branch
and Internet, Investments in I;2, #utual funds and ;ortfolio management service.
Reliance Securities .td,
3eliance Securities :imited is a 3eliance &apital company and part of the 3eliance Anil
'hirubhai Ambani 5roup. O3eliance #oneyP is a brand owned by 3eliance &apital :imited.
3eliance Securities with the permission of 3eliance &apital :imited uses the O3eliance #oneyP
brand to market its various services.
3eliance Securities endeavours to change the way investors transact in eHuities markets and
avails services. It provides customers with access to "Huity, 'erivatives, ;ortfolio #anagement
Services, Investment !anking, #utual Funds and I;2s. It also offers secured online share
trading platform and investment activities in secure, cost effective and convenient manner. 1o
enable wider participation, it also provides the convenience of trading offline through variety of
means, including &all L 1rade, !ranch dealing 'esk and its network of affiliates.
3eliance #oney through its pan India presence with .,066 outlets has more than 6.- million
customers. 3eliance &apital is one of India?s leading and fastest growing private sector financial
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services companies, and ranks among the top 6 private sector financial services and banking
groups, in terms of net worth.
1he list of other competitors are given below.
India infoline
935 Securities ltd.
@ay 0 wealth securities.
#otilal oswal securities ltd.
Share khan.
8dfc securities.
I&I&I direct
India bulls financial services
1.+.:,Infrastructural 5acilities,
&onsortium securities has its 8ead 2ffice located in uttar pradesh and has *- !ranch 2ffices
spread over various cities in India. 1he main server at the 8ead 2ffice in is connected by >SA1
to (S" and !S". And all the !ranch 2ffices are connected by the branch network, >;(, >SA1
and the internet.
&onsortium is well eHuipped with latest in terms of information technology and all the branches
are interconnected with state of the art networking technology. Internet based clienttrading
services in "Huities and 'erivatives Segment is also available. 2ther infrastructure includes a
large network of trading terminals connected by >SA1s all across the country.
consortium)s backbone is based on >SA1 technology, :eased :ine as well as broadband Internet
which gives a client maximum benefit for trading and watching their online positions. 1heir
groups of professionals ensure to provide the best available services for 1rading, 'epository and
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&ommodity "xchange.
At consortium branches around in India they have computers, 1elephones and a fast broadband
internet service as their basic necessity. 1hey have a very comfortable and spacious office to
work with very good infrastructure provided to both the front desk as well as the back office
executives. For trading they use the 2'I( and (2@ software and also have their own separate
Accounting software for retrieving all the data and information about their clients. @hile for
;ortfolio #anagement Service and #utual Fund, there is different software.
All in all, the company provides their employees and the clients with a good infrastructure
facility which keeps them happy, healthy and satisfied at all the times.
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1.+.;, <%R- 5.%< *%/E..

;laces the 2rder
"xecutes the 2rder.
23

THE C.IE$T

THE /EA.ER
B46
SE..
1he client makes the payment
either directly via his 'emat AMc
or pays by cheHue to the dealer.
1he dealer takes the delivery of
the shares to be sold from the
client.
1he AMc)s !ack 2ffice transfers
the amount to the seller)s
broker.
1he dealer receives the amount of
the shares sold from the buyer)s
broker.
1he AMc)s back
office deposits
the amount in
the seller)s
'emat AMc
Simultaneously,
the dealer then
makes the delivery
of the shares to the
buyer)s broker.
1he dealer receives
the delivery in the
name of the client
from the seller)s
broker.
Transaction is settled.
54$CTI%$A. A$A.6SIS
1. 5I$A$CE /EPART*E$T
Importance of a finance department cannot be overemphasized. It is, indeed, the key to
successful business operations. @ithout proper administration of finance, no business enterprise
can reach its full potentials for growth and success. 1he finance department looks after overall
financial activities in the organization. #aintaining accounts, preparing budgets, finding new
avenues of raising capital and investing opportunities, and ensuring proper financial health of the
organization, are some of the responsibilities of this department.
%R)A$ISATI%$ CHART 5%R 5I$A$CE /EPART*E$T
1he finance department comprises of two primary teams C accounts and corporate investments.
1he accounts team is further divided into two subgroups C one maintains corporate accounts for
the broking house and the other maintains general accounts of the clients and the business
associates.
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ACC%4$TS PR%CESS 5.%<
25
+. B4SI$ESS /E'E.%P*E$T=*AR-ETI$) /EPART*E$T
1he main function of the !usiness development department, as the name suggests, is to develop
the business of the broking house and increase its client base. (o doubt, it is one of the most
important departments for the firm as it a strong business development team directly translates
into revenues for the firm. 1he function of this department does not is not Aust to acHuire new
clients but to also maintain good relationship with existing clients and encourage them to do
more business with the firm.
%R)A$ISATI%$ CHART 5%R B4SI$ESS /E'E.%P*E$T /EPART*E$T
1he business development department comprises of three divisions, namely marketing, sales and
leads management. Although they are three distinct divisions, their work isS highly interrelated
and hence their work process is cannot be separate from each other.
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1.*AR-ETI$)2 SA.ES A$/ .EA/ *A$A)E*E$T PR%CESS 5.%<
27
1.+.1>. 5uture !ro0t and &ros&ectus.
Since the inception of the company, consortium has always been growing and strengthening its
services.
1he company is planning to open nearly + new branches out of which maAor ones are in south
india. As the logo says Othoughtful and progressiveP, &onsortium securities have good number of plans to keep climbing the
ladder of success.
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CHAPTER II
+. *c-I$SE6?s 9?S 5RA*E<%R-,
Introduction,
#c<insey)s ,S Framework was developed in late *7,/s at the #c<insey and &ompany which is
a reputed #anagement &onsultancy firm in =S. 1he model is based on the theory that, for an
organization to perform well, the seven elements $,S%4 Strategy, System, Structure, Stlye, Skills,
Staff and Shared >alues4 need to be aligned and mutually reinforcing. So, the model can be used
to help identify what needs to be realigned to improve performance, or to maintain alignment
during other types of change.
@hatever the type of change restructuring, new processes, organizational merger, new systems,
change of leadership, and so on the model can be used to understand how the organizational
elements are interrelated, and so ensure that the wider impact of changes made in one area is
taken into consideration.
Te Se(en Elements
1he #c<insey ,S model involves seven interdependent factors which are categorized as either
QhardQ or QsoftQ elements:
Hard Elements Soft Elements
Strategy
Structure
Systems
Shared >alues
Skills
Style
Staff
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Q8ardQ elements are easier to define or identify and management can directly influence them:
1hese are strategy statements4 organization charts and reporting lines4 and formal processes and
I1 systems.QSoftQ elements, on the other hand, can be more difficult to describe, and are less
tangible and more influenced by culture. 8owever, these soft elements are as important as the
hard elements if the organization is going to be successful.
1he way the model is presented in Figure below depicts the interdependency of the elements and
indicates how a change in one affects all the others.

*c-insey 9s *odel
:et?s look at each of the elements specifically:
Strate!y, the plan devised to maintain and build competitive advantage over the rivals.
Systems, the daily activities and procedures that staff members engage in to get the Aob
done.
Structure, the way the organization is structured and who reports to whom.
Sared 'alues, called Qsuperordinate goalsQ when the model was first developed, these are
the core values of the company that are evidenced in the corporate culture and the general
work ethic.
Style, the style of leadership adopted.
Staff, the employees and their general capabilities.
Skills, the actual skills and competencies of the employees working for the company.
30
;lacing Shared >alues in the middle of the model emphasizes that these values are central to the
development of all the other critical elements. 1he company?s structure, strategy, systems, style,
staff and skills all stem from why the organization was originally created, and what it stands for.
1he original vision of the company was formed from the values of the creators. As the values
change, so do all the other elements.
31
*c-I$SE6?s 9S 5rame0ork 0it reference to Consortium Securities,
1# Strate!y
A strategy is a plan of action designed to achieve a particular goal. Strategy refers to the
systematic action and allocation of resources to achieve the companies aim the integrated vision
and direction of the company as well as the manner, in which it drives, articulate, communicates
and implements that vision and direction. It can also be defined as the choice of direction and
action that the company adopts to achieve its obAectives in a competitive situation.
As per the vision and mission statement of the company, the main strategy of consortium
securities is to gain competitive advantage over the rivals not by letting the others down but by
taking its own standards to a higher level through better service and customer satisfaction. 1heir
strategic goal is to excel in its service with integrity, diligence and transparency in satisfying the
customers) investment needs and to build itself as the most trusted and a worldclass financial
service provider.
+# Systems
1he daily activities and procedures that staff members engage in to get the Aob done. System
comprises of the main systems that run the organization like the finance or the human resource
systems.
At consortium securities they use a &omputerised Information System $&IS% from where all the
important data are being collected and then processed further as per various needs. And the
'ecision #aking system too is dependent on the &IS which is usually in the hands of the top
management. 1he management &ontrol system at consortium is all bound by the company)s
vision and mission statement as well as their immediate goals and targets. 1his is taken care of
by the responsibility centre at the head office. @hile the Appraisal and the 3eward Systems are
on a #erit 3ating cum "xperience basis so that they can encourage and retain the existing
employees as well as attract the most potential employees while recruiting.
So, this as a whole helps consortium to bind the different constituents of the organisation and
positions in tact to facilitate the performance of the entire organisation in a coordinated, cohesive
32
and fruitful manner.
1# Structure
!usiness needs to be organized in a specific form of shape that is generally referred to as
organizational structure. 2rganizations are structured in a variety of ways, dependent on their
obAectives and culture. 1he structure of the company often dictates the way it operates and
performs. 1raditionally, the businesses have been structured in a hierarchical way with
several divisions and departments, each responsible for a specific task such as human
resources management, production or marketing. #any layers of management controlled the
operations, with each answerable to the upper layer of management.
33
Regional
Head
Product
Head
commoditi
es trading
Product
Head
mutual
funds
Product
Head
currency
trading
Product
Head
depository
and demat
Product
Head
futures and
options
Product
Head
euity and
deri!ates
"#$ and
%&
Regional
Product
Head
&epository
and &emat
Regional
Product
Head
"urrency
'rading
Regional
Product
Head
(utures
and
$ptions
Regional
Product
Head
%utual
(unds
Regional
Product
Head
"ommoditie
s'rading
Regional
Product
Head
euity and
&eri!ates
)$*+,
H#+&
-R+*"H
Regional
%anager
&epository
and &emat
Regional
%anager
"urrency
'rading
Regional
%anager
%utual
(unds
Regional
%anager
"ommoditie
s'rading
Regional
%anager
(utures
and
$ptions
Regional
%anager
euity and
&eri!ates
@# Sared 'alues
Shared >alues are the core values of the company that are evidenced in the corporate culture and
the general work ethic.
1he values of consortium are its core foundation for its excellence in its day to day business
operations which drives it towards the success. 1hey are:
Integrity
1ransparency
&ommitment 1o "xcellence
1eam @ork.
7# Style
Style of leadership or relationship refers to the manner in which an individual uses his or her
talent, values, knowledge, Audgment, and attitudes to lead and relate to others. Style
expresses the person)s character. Style is the leadership approaches of top management and
the organization)s overall operating approach4 also the way in which the organization)s
employees present themselves to the outside world, to suppliers and customers.
1he company follows a 1opdown style of management wherein the top level managers would
give instructions and the same is followed by the lower levels. 8owever, at consortium they have
a very pleasant and cooperative organisation culture where everyone)s ideas are respected and
considered. All are participative when it comes to working at the office so as to reach the targets
and meet the organisational goals Aointly in the least possible time.
34
8# Staff
2rganizations are made up of people and it)s the people who make the real difference to the
success of the organization in the increasingly knowledgebased society. 1he importance of
human resources has thus got the central position in the strategy of the organization, away from
the traditional model of capital and land.1he people working in consortium securities have
technical skills that are reHuired for the day to day operations in the company.
1here are nearly *-/ workers working in consortium securities. 1he upper level members like
zonal managers, regional managers, branch managers and senior executives are recruited by
publishing recruitment advertisement in leading national level newspaper.
1he Hualified applicant are then called for interview and selected.1he regional manager has
authority to select lower level employee like peon, marketing executives, accountant etc. by
approval of zonal manager.
35
9# Skills
Skills deal with the strongest skills, actual skills and competencies of the employees working for
the company and how they are monitored. A skill is the ability, knowledge, undertaking, L
Audgment to accomplish a task. Skills may be defined as what the company does best4 the
distinctive capabilities L competencies that reside in the organization.
A typical Aob of an eHuities analyst reHuires both analytic and interpersonal skills. 1he skills
involved include:
-ey Skill Area ReAuirement
Peo&le skills, 8igh
Sales skills, #edium
Communication skills, 8igh
Analytical skills, 8igh
Ability to syntesiBe, 8igh
Creati(e ability, 8igh
Initiati(e, #edium
<ork ours, -/*0/Mweek
"xpertise with analysis tools and techniHues becomes even more necessary in today)s fastpaced
environment. It is further complicated by the use of dispersed or outsourced teams, complex
business processes, timedriven business initiatives, new agile software development approaches,
and poorly integrated legacy applications.
CHAPTER III
S<%T A$A.6SIS
36
1. S<%T A$A.6SIS,
A S@21 analysis is a tool, used in
management and strategy formulation. It can
help to identify the Strengths, @eaknesses,
2pportunities and 1hreats of a particular
company.
Strengths and weaknesses are internal factors that create value or destroy value. 1hey can
include assets, skills, or resources that a company has at its disposal, compared to its
competitors. 1hey can be measured using internal assessments or external benchmarking.
2pportunities and threats are external factors that create value or destroy value. A company
cannot control them. !ut they emerge from either the competitive dynamics of the
industryMmarket or from demographic, economic, political, technical, social, legal or cultural
factors.
S<%T *ATRIC,

S<%T *atrix
I$TER$A.
ECTER$A.
(S)
Internal
Strengths
(W)
Internal
@eakness
$2%
"xternal
2pportunities
$1%
"xternal
1hreats
S% Strate!ies
4se DS? to take
ad(anta!e of D%
<% Strate!ies
Take ad(anta!e of
D%? by o(ercomin!
D<?
ST Strate!ies
4se DS? to a(oid DT?
<T Strate!ies
*inimiBe D<? and
a(oid DT?
S<%T A$A.6SIS %5 C%$S%RTI4* SEC4RITIES
37
STRE$)THS
Branc $et0ork
&onsortium has a wide network of branches and franchisees spread all over India to fulfill all
investment needs of the customers.1hey have an extremely strong footprint in (orth India
$'elhi, ;unAab, 8aryana L 8imachal%
State of te art tecnolo!y
1echnology is one of the biggest strengths and the entire business process is driven by the latest
technology for easy, swift and secure transactions. All the offices at various locations are
integrated with private >SA1 (etwork and internet connectivity, which enables access to its
back office and depository data on real time basis. 1he clients can also access their back office
and depository reports from the website.
Single ;latform with shared limits for all the trading needs
1rade AnywhereMAnytime C trade on the internet or callMvisit a local office.
("A1 terminals in regional offices for faster execution of trades
;rivate >SA1 network powered by !harti with Internet !ackups for worst case
scenarios.
&1&: network trading engine powered by Financial 1echnologies $2'I( C market
leader%
3ealtime access to back office and depository data.
2ne of the first few adopter of new (S"I1 platform $(2@%
Peo&le
38
!esides the core promoters, the group is having its full fledged teams headed by young and
dynamic professionals like chartered accountants, company secretaries, #!As, I1 professionals
etc. to handle the various divisions of the company.
<EA-$ESSES,
Few branch networks and less physical presence $which is currently predominant only in
the (orthern part of India%.
;oor advertisement activities.
(o global reach.
@eak brand name.
%PP%RT4$ITIES,
Scope for taking its business overseas and going global.
Scope for increasing its branch network especially in the important financial centres as
well as extending its physical presence in other parts of the country.
=pgradation of the latest technology to give better and faster service to its clients.
THREATS,
1he ever increasing and challenging necktoneck competition specially with those
established and existing reputed stock broking companies.
=ncertainty of the market and volatility and fluctuations in the stock prices.
&hange in customer needs, preferences and taste.
1hreat from new entrants into the field of stock broking.
CHAPTER I'
@. A$A.6SIS %5 5I$A$CIA. STATE*E$T
Ratio analysis
'.e net profit ratio is a measure of sales efficiency/ '.e sales efficiency .as decreased o!er
39
t.e years/ 0ales efficiency is t.e profit generating capacity 1.ic. indirectly depends upon t.e
cost of sales/ + lo1 sales efficiency resulting into lo1er net profit margin can 2e due to increase
in t.e cost of sales/
'.e debt to equity ratio is .ig. in 2006 and .as significantly dropped in 2009/ t.is may 2e due
to t1o reasons34a5 t.e firm may .a!e reduced some part of its de2t to reduce financial ris6
associated 1it. .uge de2t/425t.e firm may .a!e increased t.e contri2ution of s.are.olders 2y
issuing s.ares in .uge num2ers/
'.e current ratio indicates t.e firm7s a2ility to manage its current lia2ilities/ + .ig.er ratio
indicates e8cess idle funds/ '.e ratio .as increased o!er t.e years indicating increased
in!estment in current assets or e8cess of idle funds or else corresponding decrease in current
lia2ilities/
'.e financial charges coverage ratio indicates .o1 comforta2ly t.e firm can pay off its de2t
interest c.arges/ '.e ratios are !ery .ig. in 2006 meaning t.is firm can ser!ice its de2t !ery
1ell/ Ho1e!er t.e ratio .as s.arply dropped in 2009 1.ic. may 2e due to drop in t.e le!el of
#-9'/
'.e fixed assets turnover ratio measures t.e efficiency of t.e assets use/ Hig.er t.e ratio:
.ig.er is t.e utili;ation of fi8ed assets for production/ '.e company al1ays tries to ac.ie!e
optimum utili;ation of all resources for production purposes/ '.e ratio 1as !ery lo1 initially and
did not s.o1 any significant increase in 2009/
'.e dividend payout ratio indicates t.e percentage of total earnings gi!en a1ay as di!idend/
'.e ratio is nil in 2005 and 2009 as 1ell 2ut .ig. in 2007 and 2008/ &i!idend payout ratio
depends upon t.e di!idend policy of t.e company
Analysis of balance sheet
'.e euity s.are capital .as remained more or less t.e same/ '.ere is 52/3 percentage
increases in Reser!es and surplus in 2009 o!er t.e pre!ious year/ 9n!estments increased 2y
270 percentage/
CHAPTER '
7. .earnin! Ex&erience.
40
@ith the help of the proAect letter given in the college I approached lot of companies and I
got an opportunity to do the proAect in consortium securities.getting permission to do the proAect
in a company is the most difficult task,as many companies do not allow students to do the
proAect.
@hatever I had learnt in the books I got an opportunity to experience it practically.there is a lot
of difference between the theoretical knowledge and its practical application.during the course of
collecting the data I came across new things and learnt how those concepts are applied in the real
world situation.
1he people at consortium securities are very friendly and with their cooperation I could
complete the proAect successfully.I could study and understand the stock market and how trading
is done,how brokers receive the orders from the clients and execute the orders etc..
&onsortium securities is a stock broking company so I was taught how trading is done online
using various softwares,how the records of the clients are maintained,what are the back office
operations performed,what are the various functional departmentsRetc..

CHAPTER 'I
)E$ERA. I$TR%/4CTI%$
SE$SEC
41
Sensex Csensitivity index has long been known as the barometer of Indian economy.In *7,+,7
stock market contained only private sector companies and they were mostly geared to
commodity production.hence,a sample of 6/ was drawn from them.with the passage of time
more and more companies private as well as public came into the market.
"ven though the number of scrips in the sensex basket remained the same 6/,representations
were given to new industrial sectors such as services,telecom,consumer goods,etc..the continuity
and integrity of the index are kept intact,so that a comparison of the current market condition
with those of a decade ago is made easy and any distortion in the market analysis is avoided.
Sensex Calculation *etodolo!y
Free float methodology is adopted for the calculation if the sensex form *
st
of September
0//6.initially the index was calculated using full market capitalization.
Free float methodogy means that proportion of total shares issued by the company that are
readily available for trading in the market.the free float factor for each company is calculated
,and the market capitalization is multiplied by the free float factor to determine the free float
market.a free float factor of say /../ means ./K of the market capitalization of the company is
considered for the calculation of sensex.
:ist of &ompanies taken for the analysis and their Industry.
42
Com&any Industry
A&&
8ousing 3elated
!harti Airtel
&apital 5oods
!8":
1elecom
':F
8ousing 3elated
5rasim
'iversified
8'F&
Finance
8'F& !ank
Finance
8ero 8onda
1ransport "Huipments
8indalco
#etal,#etal ;roducts L #ining
8=:
F#&5.
I&I&I !ank
Finance.
Infosys
Information 1echnology
I1&
F#&5
9; Associates
8ousing 3elated
:L1
&apital 5oods
#ahidra and #ahindra
#aruti Suzuki
(1;&
;ower
2(5&
2il L 5as
3eliance infrastructure ;ower
3eliance communications 1elecommunications
3(3: 2il and gas
S!I
Finance
Sterlite Industries
#etal,#etal ;roducts L #ining
Sun ;harma
8ealthcare
1ata #otors 1ransport eHuipment
1ata ;ower ;ower
1ata Steel #etal pproducts and mining
1&S Information 1echnology
@ipro Information 1echnology
8.1. Statement of te Problem.
1he problem area on which study is conducted is Oanalysis of risk and return of stocks in sensex
using &A;#P.
Sensex is considered as the barometer of Indian economy.1here are 6/ stocks which are listed in
sensex each of this is of different industry.investor always look for the scrips which give good
43
returns with some amount of risk.so this study is conducted to suggest investors which are the
scrips which gives good returns and in which they can invest in.
8.+. %bEecti(es of te Study.
1o study the stock market.
1o analyze trends and growth rate of various scrips.
1o analyze whether securities are priced correctly or not.
1o know whether expected return of a security is in line with its fair return.
1o analyze variations in returns among securities.
1o suggest the investors which are the scrips suitable for investment.
8.1, Sco&e of te study
1he study is conducted using 6/ stocks listed in the sensex.
8istorical prices for last one year$*00//7 to *00/*/% is taken for the study.
&A;#$capital asset pricing model% is used for the study.
8.@. *etodolo!y of te Study
8.@. 1.Researc *etod
1he type of research is exploratory research using the &A;# model.
44
8.@. +.Sam&lin! frame
!ombay stock exchange,sensex.
8.@. 1.Sam&le siBe All the 6/ Stocks in Sensex.
8.@. @.'ata Collection TecniAue.
Secondary /ataF
8istorical share prices for the last one year$*00//7 to *00/*/% is taken for the study
from the following sources:
@ebsites
(ews papers
.
8.7.7.Analysis tecniAue,
&A;# #odel is used for the analysis.
E"R# GRfHI "RmFRf#
@here :
"$3%S"xpected 3eturn of the Security.
3fS3isk Free 3ate of Interest.
TS!eta of the Security.
3mS#arket 3eturn.
45
CHAPTER SCHE*E
PART A
Ca&ter I, 1his chapter includes the Industry ;rofile and &ompany ;rofile. Industry ;rofile has
the details about the growth, future scope, challenges, role in the economic development of the
nation, competitive position, recent development in the industry, maAor players in the Industry
etc. &ompany ;rofile includes the details background and inception of the company, nature of
business carried, ownership pattern, products and services of the company etc.
Ca&ter II, 1his chapter includes #ckensy)s ,S frame work with special reference to
organization. It includes the Structure, Skill, Style, Strategy, System, Staff, Shared >alues.
Ca&ter III, 1his chapter deals with the Strengths, @eaknesses, 2pportunities and 1hreats of
the company.
Ca&ter I', 1his chapter deals with the Analysis of the Financial Statements of the company.
Ca&ter ', 1his chapter deals with the :earning "xperience i.e. 1he kind of experience gained
during studying about the industry and company in detail.
PART B
Ca&ter 'I, 1his chapter has the general introduction about topic, Statement of the problem, the
main obAectives of study, methodology used for research and limitations of the study.
Ca&ter 'II, 1his chapter deals with the analysis and interpretation of the data. 1he analysis
techniHue used, how the data is interpreted and the inference.
46
9. .imitations of te Study
'ata used for the analysis is 8istorical data.
#arket index is used as proxy for #arket ;ortfolio.
;rices of the shares for the last one year$*00//7 to *00/*/% are considered for the
analysis.
47
CHAPTER 'II
A$A.6SIS2 %BSER'ATI%$S A$/ I$5ERE$CES
%PERATI%$A. /E5I$ITI%$ %5 C%$CEPTS
Ca&ital Asset Pricin! *odel "CAP*#.
1he !asic structure of the &A;# model was provided by #arkowitz,@illiam Sharpe,9ohn
:intner and 9an #ossin.It is a model of linear general eHuilibrium return. In &A;# theory the
reHuired rate of return of an asset is having linear relationship with asset)s beta value i.e.
undivesifiable or systematic risk.
Assum&tions.
*. An individual seller or buyer cannot affect the price of a stock.
0. Investors make decisions only on the basis of expected returns,standard deviations and
covariances of all pairs of securities.
6. Investors assumed to have homogenous expectations during the decision making period.
B. Investor can borrow and lend any amount of funds at risk free rate of interest.
-. Assets are infinitely divisible.
.. 1here is no transaction cost.
,. 1here is no personal income tax.
+. =nlimited Huantum of short sales is allowed.
Elements of te model.
1he &A;# consisits of two elements:
48
&apital #arket :ine$&#:%.
Security #arket :ine$S#:%.
Ca&ital market line.
It depicts the risk return relationship for efficient portfolios.it shows that the appropriate
measure of risk for an efficient is the standard deviation of the return of the portfolio.
Security market line.
5raphic depiction of the &A;# Cthe expected return beta relationship is known as
security market line.
!"1A.
!eta describes the relationship between the stock)s return and the index returns.
*. beta is eHual to U*./ means 2ne percent change in market index return causes
exactly one percent change in the stock return.
It indicates that the stock moves in tandem with the
market.
0. !eta is eHual to U/.- means 2ne percent change in market index return causes
/.- percent change in the stock return.1he the stock
49
is :ess volatile compared to the market.
6. beta is eHual to U0./ means 2ne percent change in market index return causes 0
;ercent change in the stock return.1he stock return
is more volatile.
B. !eta is negative means Stock 3eturn moves in the opposite direction to the
#arket return.
.ist of formulas used for te analysis.
E"R# GRfHI "RmFRf#
@here :
"$3%S"xpected 3eturn of the Security.
3fS3isk Free 3ate of Interest.
TS!eta of the Security.
3mS#arket 3eturn.
IG nJxyF"Jx#"Jy#= nJx+F"Jx#+
50
where:
bS beta of the security
xSmarket return
ySscrip return
nSnumber of days.
Estimated returnGJy=n
@here:
ISscrip return
(Snumber of days.

Al&aS $VyMn%W$VxMn%
9.1. ACC
ACC $A&& :imited% is India?s foremost manufacturer of cement and concrete. A&&?s operations
are spread throughout the country with *. modern cement factories, more than B/ 3eady mix
concrete plants, 0/ sales offices, and several zonal offices. It has a workforce of about */,///
persons and a countrywide distribution network of over 7,/// dealers.Since inception in *76., the
company has been a trendsetter and important benchmark for the cement industry in many areas
of cement and concrete technology. A&& has a uniHue track record of innovative research,
product development and specialized consultancy services. 1he company?s various manufacturing
units are backed by a central technology support services centre the only one of its kind in the
Indian cement industry.
5raph showing returns for last one year.
51
Risk and Return for ACC.
"xpected return of the security:0,.-B
"stimated return of the security:0/.06
!eta:/.,6
Alpha:/./+.
1he security is under priced. It is a low risk security.1he stock is less volatile.
9.+. Barti Airtel
It is one of Asia)s leading providers of telecommunication services with presence in all the 00
licensed Aurisdictions $also known as 1elecom &ircles% in India, and in Srilanka.1hey served an
aggregate of **6,B67,.,/ customers as of September 6/, 0//74 of whom **/,-**,B*. subscribe
to 5S# services and 0,70+,0-B use our 1elemedia Services either for voice andMor broadband
access delivered through 'S:.It is the largest wireless service provider in the country, based on
the number of customers as of September 6/, 0//7. It offers an integrated suite of telecom
52
solutions to its enterprise customers, in addition to providing long distance connectivity both
nationally and internationally. 1hey also offer '18 and I;1> Services.
Risk and return for Barti Airtel
"xpected return of the security:$0/./7%
"stimated return of the security:*B.+*
!eta:/.B,
Alpha: $/.600%
1he security is under priced.It is a low risk security.
9.1. BHE.
!8": is the largest engineering and manufacturing enterprise in India in the energy
relatedMinfrastructure sector, today. !8":was established more than B/ years ago
53
!8": manufactures over *+/ products under 6/ maAor product groups and caters to core sectors
of the Indian "conomy viz., ;ower 5eneration L 1ransmission, Industry, 1ransportation,
1elecommunication, 3enewable "nergy, etc. 1he wide network of !8":?s *B manufacturing
divisions, four ;ower Sector regional centres, over *// proAect sites, eight service centres and *+
regional offices, enables the &ompany to promptly serve its customers and provide them with
suitable products, systems and services efficiently and at competitive prices.
Risk and Return for BHE.
"xpected return of the security:0-.-7
"stimated return of the security:0/./0
!eta:/.,0
Alpha:/./.7
54
9.@. /.5
':F :imited $':F% is a real estate development company in India. 1he &ompany is primarily
engaged in the business of colonization and real estate development. ':F has approximately B0-
million sHuare feet of development across its businesses, including developed, ongoing and
planned proAects. 1he 8omes business unit involves a range of products, including
condominiums, duplexes, row hoses and apartments of varying sizes. For the nine months ended
6* 'ecember 0//7, ':F :imited?s revenues decreased 6+K to 3S-,./+!. (et income decreased
,*K to 3S*6./B!. 3evenues reflect a decrease in income from operations.
Risk and return for /.5
"xpected return of the security:*7.B7
"stimated return of the security:6,.60
!eta:*.--
Alpha:/.6,
55
1he security is over priced.It is a high risk security.
9.7. )rasim.
5rasim Industries :imited, a flagship company of the Aditya !irla 5roup, ranks among India?s
largest private sector companies, with consolidated net turnover of 3s.*+B billion and a
consolidated net profit of 3s.00 billion $FI0//7%.
Starting as a textiles manufacturer in *7B+, today 5rasim?s businesses comprise >iscose Staple
Fibre $>SF%, cement, chemicals and textiles. Its core businesses are >SF and cement, which
contribute to over 7/ per cent of its revenues and operating profits.1he Aditya !irla 5roup is the
world)s largest producer of >SF, commanding a 06 per cent global market share. 5rasim, with
an aggregate capacity of 666,7,- tpa has a global market share of *0 per cent.
Risk and return for )RASI*
"xpected return of the security:66.B7
"stimated return of the security:*7.+*
56
!eta:/.,*
Alpha:/.*-*
9.8. H/5C.
8ousing 'evelopment Finance &orporation :imited $8'F&% provides housing finance. 8'F&?s
distribution network spans 0., outlets, which include -. offices of the wholly owned distribution
company, 8'F& Sales ;rivate :imited $8S;:%. In addition, 8'F& covers over 0,B// locations
through outreach programmes.
For the fiscal year ended 6* #arch 0//7, 8ousing 'evelopment Finance &orporation?s revenues
increased 66K to 3S**,./.!. (et income decreased *-K to 3S06./-!. 3evenues reflect an
increase in income from 8ousing business and higher contribution from Asset management
segment
Risk and return for H/5C
57
"xpected return of the security:0+.7/
"stimated return of the security:6/.0B
!eta:*.0*
Alpha:$/./06%
1he security is under priced.it is a low risk security.
9.9. H/5C Bank.
8ousing 'evelopment Finance &orporation :imited, more popularly known as 8'F& !ank :td,
was established in the year *77B, as a part of the liberalization of the Indian !anking Industry by
3eserve !ank of India $3!I%. 1he following year, it started its operations as a Scheduled
&ommercial !ank. 1oday, the bank boasts of as many as *B*0 branches and over 60,- A1#s
across India.
1he 8ousing 'evelopment Finance &orporation :imited $8'F&% was amongst the first to
receive an ?in principle? approval from the 3eserve !ank of India $3!I% to set up a bank in the
private sector, as part of the 3!I?s liberalisation of the Indian !anking Industry in *77B. 5raph
showing returns for last one year.
58
Risk and return for H/5C BA$-
"xpected return of the security:0B.60
"stimated return of the security:*,.-0
!eta:/..
Alpha:/./++
9.:. HER% H%$/A.
1he &ompany?s principal activity is to manufacture and market two wheelers and spare parts. It
has two manufacturing facilities at 'haruhera and 5urgaon in 8aryana and its third plant is at
8aridwar. 'uring the fiscal year ended 6*#ar0//7, it launched eight models: ;assion ;ro $*//
cubic capacityB Stroke%, &!D"xtreme $*-/ cubic capacity B Stroke%, ;leasure (ew
Aesthetics, Splendor (E5 $Self Start%, &' 'eluxe $Self Start%, 5lamour FI, 5lamour $&arb.%
59
and 8=(< Special "dition. 1he models offered by the &ompany include &' 'awn, &' 'eluxe,
;leasure, Splendor ;lus, Splendor (E5, ;assion ;32, ;assion ;lus, Super Splendor, 5lamour,
5lamour ;5#FI, Achiever, &!D E13"#", <arizma and 8unk.
Risk and return for HER% H%$/A
"xpected return of the security:6B.B/
"stimated return of the security:*/.+B
!eta:/.0+
Alpha:/.0,*
9.;. HI$/A.C%.
60
8indalco Industries :imited is an Indiabased company. 1he &ompany has three operating
segments: Aluminum, &opper and 2thers. Aluminum comprises of Alumina, Aluminum #etal
and Aluminum #etal products. &opper comprises of continuous &ast &opper 3ods, &opper
&athodes, Sulphuric Acid, 'A; L &omplexes, 5old and Silver. 2ther segment comprises of
&austic, &ellular Services and 2thers. For the fiscal year ended 6* #arch 0//7, 8indalco
Industries :imited?s revenues increased 7K to 3S.-..0-!. (et income decreased ,+K to
3SB.+-!. 3evenues reflect higher revenue from Aluminium segments.
Risk and return for HI$/A.C%
"xpected return of the security:-*.*.
"stimated return of the security:0+.7+
!eta:*.*-
Alpha:/.0*6
61
1he security is under priced.It is a high risk security.
9.1>. H4..
8industan =nilever :imited $8=:% is India?s largest fast moving consumer goods company, with
leadership in 8ome L ;ersonal &are ;roducts and Foods L !everages. 8=:?s brands, spread
across 0/ distinct consumer categories, touch the lives of two out of three Indians. 1hey endow
the company with a scale of combined volumes of about B million tonnes and sales of 3s.*/,///
crores.. It is a mission 8=: shares with its parent company, =nilever, which holds -*.--K of the
eHuity..
Risk and return for H4.
"xpected return of the security:B...
"stimated return of the security:**.0..
62
!eta:/.6
Alpha:$/./6%
1he security is over priced.It is a low risk security.
9.11. ICICI BA$-.
I&I&I !ank is India?s secondlargest bank with total assets of 3s. 6,-.0.0+ billion $=SG ,,
billion% at 'ecember 6*, 0//7 and profit after tax 3s. 6/.*7 billion $=SG .B+.+ million% for the
nine months ended 'ecember 6*, 0//7. 1he !ank has a network of *,../ branches and about
B,++6 A1#s in India and presence in *+ countries.. 1he !ank currently has subsidiaries in the
=nited <ingdom, 3ussia and &anada, branches in =nited States, Singapore, !ahrain, 8ong
<ong, Sri :anka, Xatar and 'ubai International Finance &entre and representative offices in
=nited Arab "mirates, &hina, South Africa, !angladesh, 1hailand, #alaysia and Indonesia.
.
Risk and return for ICICI BA$-
63
"xpected return of the security:66.+7
"stimated return of the security:6,.,B
!eta:*.-,
Alpha$/./.%
9.1+. I$5%S6S
Infosys 1echnologies :imited $Infosys% is a global technology services firm that defines, designs
and delivers information technology $I1%enabled business solutions to its clients. 1he &ompany
provides endtoend business solutions that leverage technology for its clients, including
technical consulting, design, development, product engineering, maintenance, systems
integration, packageenabled consulting, and implementation and infrastructure management
services. Infosys also provides software products to the banking industry. Infosys !;2 is a
maAority owned subsidiary. For the nine months ended 6* 'ecember 0//7, Infosys 1echnologies
:imited?s revenues increased -K to 3S*.,.7+!. (et income increased .K to 3SB..B7!.
64
Risk and return for I$5%S6S
"xpected return of the security:6+./+
"stimated return of the security:*7.67
!eta:/..7
Alpha:/.0/
9.11. ITC.
Although everyone knows that cigarette smoking is inAurious to health, they still smoke, thereby
increasing the profit margin of the Indian Tobacco Com&any . 1he Tobacco Com&any in
India has tasted tremendous success over the last few decades. In the Indian Tobacco
Com&any scenario I1& is the market leader. India is the third largest producer and eighth largest
exporter of tobacco and tobacco products in the world which goes to show the tremendous
success that the Indian Tobacco Com&any has achieved. @hile India?s share in the world?s area
65
under tobacco crop has risen from 7K to **K in the last 6 decades, its share in production has
inched up from +K to 7K in the tobacco industry.
Risk and return for ITC
"xpected return of the security:*,.B7
"stimated return of the security:*6.7,,
!eta:/.B6
Alpha:/./.6
9.1@. KP Associates.
9aiprakash Associates :imited is a diversified infrastructural industrial conglomerate in India.
1he &ompany is engaged in the business of heavy civil engineering construction, expressways,
66
cement, and real estate and hospitality As of #arch 6*, 0//7, the &ompany had seventeen
subsidiaries, which include 9aiprakash 8ydro ;ower :imited, 9aiprakash ;ower >entures
:imited, 9aypee Infratech :imited, 9aypee ;owergrid :imited and 8imalayan "xpressway
:imited. 2n #ay *-, 0//+, the &ompany acHuired !ina ;ower Supply &ompany.for the fiscal
year ended 6* #arch 0//+, 9aiprakash Associates :td.?s revenues increased *6K to 3SB7..,!.
(et income decreased 6+K to 3SB.0!. 3evenues reflect an increase in cement sales and higher
hotel revenue.
Risk and return for K.P.associates
"xpected return of the security:6..0*
"stimated return of the security:66.77
!eta:*.67
Alpha:/.//0-7
67
1he security is under priced.it is a high risk security.
9.17. . and T
:arsen L 1oubro :imited $:L1% is India?s largest engineering and construction conglomerate
with additional interests in electricals, electronics and I1. A strong customerfocus approach and
constant Huest for topclass Huality have enabled :L1 to attain and sustain leadership over .
decades.";& proAect business constitutes a critical part of the :L1?s engineering core. :L1 has
integrated its strengths in basic and detailed engineering, process technology, proAect
management, procurement, fabrication and erection, construction and commissioning, to offer
single point responsibility under stringent delivery schedules. Strategic alliances with world
leaders enable :L1 to access technical knowhow and execute process intensive, large scale
turnkey proAects to maintain its leadership position.
Risk and return for . and T
"xpected return of the security:6-.*+
"stimated return of the security:6*.0+
!eta:*.0.
68
Alpha:/./0.
1he security is under priced.It is a high risk security.
9.18. *AR4TI S4L4-I.
#aruti Suzuki India :td. 1he 5roup?s principal activity is to manufacture, purchase and sale of
#otor >ehicles and Spare parts. 1he 5roup is a subsidiary of Suzuki #otor &orporation. 1he
other activities of the 5roup comprises of facilitation of ;re2wned &ar Sales, Fleet
#anagement and &ar Financing. 1he product range includes ten basic models with more than -/
variants. 1he 5roups operations are in *0// towns and cities with 0.0+ workshops and also
exports cars to other countries.
Risk and return for *AR4TI S4L4-I
"xpected return of the security:B,.-+
"stimated return of the security:*-.B6
69
!eta:/.-
Alpha:/.6B
9.19. *M*
1he &ompany was Incorporated and converted into ;ublic :imited in*7-- at #umbai. 1he
&ompany #anufacture 9eep type vehicles, petrol industrial engines, industrial process control
instruments and flow meters. 1rading in steel and manufacture of professional grade "lectronic
components. 9eeps are manufactured under a license andanagreement with @illys #otors Inc.,
1oledo, 2hio, =.S.A., for whom the &ompany also acts as exclusive distributors for the whole of
India for their entire range of vehicles including utility vans,cargoMpersonnel carriers and pickup
trucks.
Risk and return for *M*
"xpected return of the security:.*.6/
70
"stimated return of the security:0B.*7
!eta:/.70
Alpha:/.6,-
9.1:. $TPC
(1;& :imited is the largest thermal power generating company of India. And it?s a public sector
company, it was incorporated in the year *7,- to accelerate power development in the country as
a wholly owned company of the 5overnment of India. At present, 5overnment of India holds
+7.-K of the total eHuity shares of the company and the balance */.-K is held by FIIs, 'omestic
!anks, ;ublic and others. !ased on *77+ data, carried out by 'atamonitor =<, (1;& is the .th
largest in terms of thermal power generation and the second most efficient in terms of capacity
utilisation amongst the thermal utilities in the world.
71
Risk and return for $TPC
"xpected return of the security:*0.BB
"stimated return of the security:*..B,
!eta:/.--
Alpha:$/./*,%
1he security is over priced.It is a low risk security.
9.1;. %$)C
1oday, 2(5& is the flagship company of India4 and making this possible is a dedicated team of
nearly 66,/// professionals who toil round the clock. It is this toil which amply reflects in the
aspirations and performance figures of 2(5&. 1he company has adopted progressive policies in
scientific planning, acHuisition, utilization, training and motivation of the team. At 2(5&,
everybody matters, every soul counts.
72
(eedless to emphasize, this was made possible by the men L women behind the machine. 2ver
*+,/// technicallycompetent experienced scientists and engineers, mostly from distinguished
=niversities M Institutions of India and abroad form the core of our executive profile.
Risk and return for %$)C
"xpected return of the security:0..0*B
"stimated return of the security:*7.*+7
!eta:/..+
Alpha:/./+.
9.+>. Reliance Communications
73
1he :ate 'hirubhai Ambani dreamt of a digital India Y an India where the common man would
have access to affordable means of information and communication. 'hirubhai, who single
handedly built India)s largest private sector company virtually from scratch, had stated as early
as *777: O#ake the tools of information and communication available to people at an affordable
cost. 1hey the :ate 'hirubhai Ambani dreamt of a digital India Y an India where the common
man would have access to affordable means of information and communication.
Risk and return for R.C%*.
"xpected return of the security: ..BB0
"stimated return of the security:6-.+,
!eta:*.B+
Alpha:$/.BB%
74
1he security is over priced.it is a high risk security.
9.+1. R$R.
Com&any Profile, 3eliance (atural 3esources :td
Reliance $atural Resources .td. 1he 5rpoup?s principal activities are to source, supply and the
transportation of gas, coal and liHuid fuels. It also involved in the exploration, production and
distribution of gas and the mining of coal. It operates in a single segment of Fuel handling and
related activities.
Risk and return for R$R.
"xpected return of the security:*B./++
"stimated return of the security:,.6/-
!eta:/.**
75
Alpha:/.**0
9.++. Reliance Infrastructure
3eliance Infrastructure :td is not only India)s largest private sector enterprise in power utility
but also the largest private sector player in many other infrastructure sectors of India. In the
infrastructure space the company is focused on roads, =rban infrastructure which includes
#31S, Sealink and Airports, Specialty 3eal "state which includes business districts, trade
towers, convention centre and S"D which includes I1 L I1"S S"D and non I1 S"D as well as
freetradezones.3eliance Infrastructure distributes more than 0+ billion units of electricity to
cover 0- million consumers across different parts of the country including #umbai and 'elhi in
an area that spans over *, 0B,6// sH. kms.
Risk and return for Reliance infrastructure
"xpected return of the security:66.7/
76
"stimated return of the security:6..7*
!eta:*.-6
Alpha:/./-.
9.+1. SBI
State !ank of India is an Indiabased commercial bank. In addition to banking, through its
various subsidiaries, it also provides a whole range of financial services, which include life
insurance, merchant banking, mutual funds, security trading, pension fund management and
primary dealership in the money market. It operates in four business segments: 1reasury,
&orporateM @holesale !anking, 3etail !anking and 2ther !anking !usiness. For the nine
months ended 6* 'ecember 0//7, State !ank of India?s interest income rose **K to 3S,B../,!.
(et interest income after loan loss provision rose *BK to 3S0/,.0!. (et income rose 0/K to
3S7*.*B!. (et interest income reflects an increase in interest income on advances and lower
provision for contingencies.
77
Risk and return for SBI
"xpected return of the security: 0,.*,
"stimated return of the security:07.B
!eta:*.*,
Alpha:$/./6/%
1he security is over priced.it is a high risk security.
9.+@. STER.ITE I$/4STRIES
Sterlite Industries India :imited $SII:% is the principal subsidiary of >edanta 3esources plc, a
diversified and integrated F1S" *// metals and mining company, with principal operations
located in India and Australia.
Sterlite)s principal operating companies comprise 8industan Dinc :imited $8D:% for its fully
integrated zinc and lead operations4 Sterlite Industries India :imited $Sterlite% and &opper #ines
of 1asmania ;ty :imited $&#1% for its copper operations in IndiaMAustralia4 and !harat
Aluminium &ompany $!A:&2%, for its aluminium and alumina operations and Sterlite "nergy
for its commercial power generation business.
78
Risk and return for STER.ITE
"xpected return of the security:--..-
"stimated return of the security:6*.7/
!eta:*.07
Alpha:/.000
9.+7. S4$ PHAR*A
@e make speciality pharmaceuticals and active pharmaceutical ingredients. 2ur brands are
prescribed in chronic therapy areas like cardiology, psychiatry, neurology, gastroenterology,
diabetology and respiratory.
@e have the same drive for growth that marked our early days. Sun ;harma came into existence
79
as a startup with Aust - products in *7+6. In the time since, we have crossed several milestones to
emerge as a leading pharma company in India, a rank that we have now been at for more than -
years. $I#S235 3etail Store Audit, #arch 0//.%
Risk and return for S4$ PHAR*A
"xpected return of the security:*,.+*
"stimated return of the security:7.67
!eta:/.0*
Alpha:/.*06
9.+8. TATA P%<ER
3ecognised as India)s largest private sector power utility, with a reputation for trustworthiness,
built up over nearly nine decades, 1ata ;ower surges ahead into yet another year with plans of
sustained growth, greater value to consumer and reliable power supply.:ed by a powerful vision,
It has now successfully served the #umbai consumers for over ninety years and has spread its
footprints across the nation. 1ata ;ower has an installed power generation capacity of about 6///
80
#ega @atts, with the #umbai power business, which has a uniHue mix of 1hermal and 8ydro
;ower, generated at the 1hermal ;ower Station, 1rombay, and the 8ydro "lectric ;ower Stations
at !hira, !hivpuri and <hopoli, accounting for *,7, #@.
Risk and return for TATA P%<ER
"xpected return of the security:0,.B.
"stimated return of the security:0/..B
!eta:/.,-
Alpha:/./+/
9.+9. TATA STEE.
81
1he 1ata Steel 5roup has always believed that mutual benefit of countries, corporations and
communities is the most effective route to growth. 1ata Steel has not limited its operations and
businesses within India but has built an imposing presence around the globe as well. @ith the
acHuisition of &orus in 0//, leading to commencement of 1ata Steel?s "uropean operations, the
&ompany today, is among the top ten steel producers in the world with an existing annual crude
steel production capacity of around 6/ million tonnes per annum and employee strength of above
+/,/// across five continents. 1he 5roup recorded a turnover of 3s.*B,,607 &rores $=SG 0+,7.0
million% in 0//+ 0//7. 1he 5roup)s South "ast Asian operations comprise 1ata Steel 1hailand,
in which it has .,.*K eHuity and (at Steel 8oldings, which is one of the largest steel producers
in the Asia ;acific with presence across seven countries.
Risk and return for TATA STEE.
"xpected return of the security:-/.-/
"stimated return of the security:6B.0/
!eta:*.B
Alpha:/.*B
82
9.+:. TCS
1ata &onsultancy Services started in *7.+. #r.F.& <ohli who is presently the 'eputy &hairman
was entrusted with the Aob of steering 1&S. 1he early days marked 1&S resonsibility in
managing the punch card operations of 1isco. 1he company, which was into management
consultancy from day one, soon felt the need to provide solutions to its clients as well.1&S was
the first Indian company to make forays into the =S market with clients ranging
from I!#,American "xpress, Sega etc. 1&S is presently the top software services firm in Asia.
'uring the I0< buildup, 1&S had setup a I0<factory in &hennai as a shortterm strategy. (ow,
with "business being the buzzword, the factory is developing solutions for the dotcom
industries. 1oday, about 7/ percent of 1&S? revenue comes from consulting, while the rest
from products. 1&S has great training facilities.
Risk and return for TCS
"xpected return of the security:0+..6
"stimated return of the security:*,.,6
83
!eta:/..*
Alpha:/.*0+
9.+;. <IPR%
@ipro 1echnologies is the (o.* provider of integrated business, technology and process
solutions on a global delivery platform.
@ipro 1echnologies is a global services provider delivering technologydriven business
solutions that meet the strategic obAectives of our clients. @ipro has B/U N&enters of "xcellence)
that create solutions around specific needs of industries.. @ipro is the @orld?s first &##i :evel
- certified software services company and the first outside =SA to receive the I""" Software
;rocessAward.@ipro takes charge of the I1 needs of the entire enterprise..
Risk and return for <IPR%
"xpected return of the security:B-.B*
"stimated return of the security:**./-+
84
!eta:/.07
Alpha:/.6,
9.1>. TATA *%T%RS
1ata #otors is India?s most reliable, dynamic and futuristic automobile manufacturer.@ith more
than *6/ models spanning a wide range of &ommercial >ehicles, ;assenger &ars and #ulti
=tility >ehicles, 1ata #otors provides the wheels for India?s growth
1rue to the tradition of the 1ata 5roup, 1ata #otors is committed in letter and spirit to &orporate
Social 3esponsibility. It is a signatory to the =nited (ations 5lobal &ompact, and is engaged in
community and social initiatives on labour and environment standards in compliance with the
principles of the 5lobal &ompact. In accordance with this, it plays an active role in community
development, serving rural communities around its manufacturing locations.
85
Risk and return for TATA *%T%RS
"xpected return of the security:,*...
"stimated return of the security:0,.60
!eta:*./,
Alpha:/.B67
CHAPTERF'III
5indin!s.
*. 2ut of 6/ stocks in sensex #ahindra and #ahindra and 1ata #otors scrip)s risk is same
as the market risk.i.e.beta is eHual to *.
0. 1he growth of the 1elecommunications industry is very low since last year due to the
competition.since the introduction of the per second billing by 1ata 'ocomo the share
prices of the other companies has decreased.
6. 1he 3isk is high for the following scrips$beta is more than * for these
securities%:':F,8indalco,I&I&I !ank,9.; Associates, :arsen A(' 1oubro,3eliance
Infrastructure,3eliance communications,S!I,Sterlite industries,and 1ata steel.
86
B. 1he low 3isk scrips are as follows$beta is less than * for these securities%
:!8":,wipro,1&S,3eliance (atural 3esources :imited,2(5&,(1;&,#A3=1I
S=D=<I,Infosys,8=:,8'F&,8'F& !A(<,5rasim,1ata power,A&&,!harti Airtel,sun
pharma,I1&,8ero 8onda.
-. 1he over priced scrips$estimated return is more than the expected return% are
follows:airtel,':F,8=:,I&I&I !A(<,3eliance infrastructure,(1;&,3eliance
&ommunications,S!I.
.. 18" =('"3 priced scrips $estimated return is less than the expected return% are as
follows:A&&,#L#,#aruti Suzuki,!8":,5rasim,8ero8onda,hindalco,Infosys,I1&,9;
Associates,lLt,2(5&,8'F&,8'F& !ank,reliance natural resources limited,Sterlite
Industries,Sun ;harma,1ata #otors,1ata Steel,1ata ;ower,1&S,@ipro.
,. 1he scrips which moves with market$beta is eHual to *% are as
follows:A&&,!8":,':F,5rasim industries,8'F& !ank,8I('A:&2,reliance
communications,2(5&,#A8I('3A A(' #A8I('3A,Infosys,S!I,sterlite
industries,tata motors,tata power, and tata steel.
+. 1he scrips such as airtel,hero 8onda,8=:,I1&,# aruti Suzuki, (1;&, reliance natural
resources, sun pharma,1&S ,and wipro are less volatile$beta is eHual to /.-% compared to
the market.
87
7. 1he stocks such as I&I&I !A(<,9ai ;rakash Associates,:L1,reliance infrastructure are
more volatile$beta is eHual to 0 for these stocks% compared to the market.
*/. 1he investors who had invested in the following stocks would yield profitable
return$alpha values for these stocks is positive% :A&&,!8":,5rasim,8'F& !A(<,hero
8onda,hindalco,Infosys,I1&,9ai ;rakash Associates,:L1,#ahindra and #ahindra,#aruti
Suzuki,@ipro,1cs,1ata Steel, 1ata ;ower, 1ata #otors, Sun ;harma,Sterlite
industries,3eliance (atural 3esources :imited, and 2(5&.
**. If we take sensex as a portfolio it is a well diversified portfolio,because the average value
of alpha of all the stocks turns out to be almost zero.
*0. 1he stocks which yield negative return$alpha values for these stocks is negative% are as
Follows:airtel,hdfc,':F,8=:,I&I&I,(1;&,3elianceinfrastructure,reliance
communications,and S!I.
S4))ESTI%$S
*. 1he investors who are risk averse are suggested to invest in the following stocks
:!8":,wipro,1&S,reliance natural resources limited,2(5&,(1;&,#A3=1I
88
S=D=<I,Infosys,8=:,8'F&,8'F& !A(<,5rasim,tata power,A&&,bharti airtel,sun
pharma,I1&,hero 8onda.
0. 1he investors who are ready to take risk are suggested to invest in the following scrips:
':F,hindalco,I&I&I !ank,9.; associates,lLt,3eliance infrastructure, 3eliance
communications,S!I,Sterlite industries,and tata steel.
6. If an investor wants to invest in all the scrips in the sensex considering it as a portfolio
then they can invest without any hesitation because according to the portfolio theory if
the average value of alpha of all the stocks is eHual to zero then it is considered as the
efficient portfolio.
B. 1he rate of return is more for the following stocks:8'F& , 8indalco, infosys, #ahindra
and #ahindra, #aruti Suzuki, Sterlite Industries, 1ata #otors, 1ata Steel, And @ipro.
-. Scrips in telecommunications industry are not doing well such as airtel and reliance
communications.but the fundamentals of both the companies is good so investors can
invest in this scrips.
.. 1he growth in the infrastructure industry is remarkable in spite of the
recession,infrastructure is one of the sectors in india where there is lot of potential so an
investor can invest in these scrips also.
,. Investors who are ready to take moderate risk are suggested to invest in the following
scrips: airtel,hero 8onda,8=:,I1&,#aruti Suzuki, (1;&, 3eliance (atural 3esources,
89
Sun ;harma,1ata &onsultancy Services,and wipro are less volatile compared to the
market.
+. Another potential sector is the power generation sector scrips like (1;& and reliance
infrastructure are doing well if we watch these stocks there are no much fluctuations.if
we see the expected return and the estimated return for these stocks there are not much
fluctuations.
7. Investors are suggested to buy the following stocks which are underprised :
A&&,mLm,maruti Suzuki,bhel,5rasim,hero 8onda,hindalco,Infosys,I1&, 9;
Associates,:arsen and 1oubro,2(5&,8'F&,8'F& !ank,reliance natural resources
limited,sterlite industries,sun pharma,tata motors,tata steel,tataa power,tcs,wipro.
*/. Investors are suggested to avoid in the following stocks which are overpriced :
,':F,8=:,I&I&I!A(<,3elianceinfrastructure,(1;&,3eliance &ommunications,S!I.
**. If the fundamentals of the company is good and if it is a well reputed company investors
can invest in the overpriced securities also.
90
REC%**E$/ATI%$S.
If the stocks in sensex are considered as a portfolio then it is advisable for the investors to invest
in all stocks because it is a efficient portfolio.
Investors are recommended to avoid the stocks which are over priced and invest in the under
priced scrips.
1hus investors are recommended to invest in the scrips which have low risk or high risk
depending on the level of the risk the investor is ready to undertake.
In 0//7 the stock markets have recovered a lot and it is the time to invest in the stock
markets.1he economy is in recovery stage and we can reap the benefits later if we invest now in
the stock market.
@e should not worry about the small fluctuations in the market now the sensex and other indices
are bullish in nature.
3ecently the budget has been announced for the financial year 0/*/** and lot of potential
sectors like infrastructure,telecom,agricultural sectors,has been identified for the ideal investment
opportunities.
91
C%$C.4SI%$
All the 6/ stocks in the sensex were taken for the analysis. 1he expected return,estimated
return,beta and alpha values were found for all the 6/ stocks.!ased on these values the scrips
were classified as underpriced scrips.overpriced scrips,scrips of low risk,scrips of high risk etc.
1hus the investors are suggested to invest in the scrips based on the level of risk they are ready to
undertake.
92
93
Com&any Jx Jy Jx+ Jy+ Jxy
A&& .0./.7 ...* *0/7.,7 *+0-.-0 ++,.7B
AI31": .0./.7 B+.0*+ *0/7.,7 B6B,.+0* --0.6B
!8": .0./.7 .*.B0* *0/7.,7 *.*7.,6 +,B.B.
':F .0./.7 B..,7 *0/7.,7 -,7B..6 *+-..+6
53ASI# .0./.7 +/.67 *0/7.,7 *+**.BB+ +,/.0,
8'F& .0./.7 .7.6. *0/7.,7 6/++.6. *B,*.++
8'F& !A(< .0./.7 -+.6, *0/7.,7 *B*6.,, ,60.+,
8"32 82('A .0./.7 +0.-. *0/7.,7 */,,.76 6.B.*.
8I('A:&2 I('S .0./.7 *00.,7 *0/7.,7 6-/7.,7 *B*/.00
8=: .0./.7 **.*7B *0/7.,7 ++7.,, 6.,.7.
I&I&I !A(< .0./.7 +*.6B *0/7.,7 67.../+ *7//.7*
I(F2SIS .0./.7 7*.67 *0/7.,7 *-B,.6- +-*.B,
I1& .0./.7 B*.7, *0/7.,7 */7..-* -0*.0B
9; ASS2&IA1"S .0./.7 +..7 *0/7.,7 .B77.+6 *.70.BB
:L1 .0./.7 +B.B- *0/7.,7 0,7*..7 *-6*.07
#L# .0./.7 *B,.*6 *0/7.,7 6//+./77 **6,./6
#A3=1I S=D=<I .0./.7 **B.*7 *0/7.,7 *,,6.BB .0+.0-0
(1;& .0./.7 07.+, *0/7.,7 */6+...- ..6.+
2(5& .0./.7 .0.7* *0/7.,7 *.6-.706 +0B..-+
3.I(F3A .0./.7 +*.6+ *0/7.,7 B6.+.B *+BB.,+
3&2# .0./.7 *-.B. *0/7.,7 B-B/.++ *,.*.B+
3(3: .0./.7 66.+* *0/7.,7 B--/..B *6,6.07
S!I .0./.7 .-.0* *0/7.,7 0B*+.//7 *B06.6*
S1"3:I1" I('S .0./.7 *66.-. *0/7.,7 67--.6, *-,-..7
S=( ;8A3#A .0./.7 B0.,. *0/7.,7 *0+0.+6 0.6..6
1A1A #2123S .0./.7 *,0 *0/7.,7 B607.B*. *660..B.
1A1A ;2@"3 .0./.7 .-.70 *0/7.,7 *-,*.6* 7*6.0.
1A1A S1"": .0./.7 *0*.0*6 *0/7.,7 BB76.07* *,/B.776
1&S .0./.7 .+.,*0 *0/7.,7 B0/+..6 ,-0.,+
@I;32 .0./.7 */7.//* *0/7.,7 *..B.0B 6+/.--
RATI%S
#ar ? /7 #ar ? /+ #ar ? /, #ar ? /. #ar ? /-
AdAusted " ; S $3s.% 0./7 6./+ *.+6 /.+7 *.,.
AdAusted &ash ";S $3s.% 0./B 6./7 *.+. /.+7 *.,.
3eported ";S $3s.% 0./7 6./+ *.+6 /.+7 *.,.
3eported &ash ";S $3s.% 0./- 6./7 *.+. /.+7 *.,.
'ividend ;er Share /.// 0.-/ *.// /.// /.//
2perating ;rofit ;er Share $3s.% /.B. 6.-7 0.0- /.7/ /.,/
!ook >alue $"xcl 3ev 3es% ;er Share $3s.% *.67 0.*- *.7, *.6/ /.//
!ook >alue $Incl 3ev 3es% ;er Share $3s.% *.67 0.*- *.7, *.6/ /.//
94
(et 2perating Income ;er Share $3s.% *..B B.*7 0.67 /.7* *.**
Free 3eserves ;er Share $3s.% +/.+B -6.0B 6B.,. /.// /.//
PR%5ITABI.IT6 RATI%S
2perating #argin $K% 0+./7 +-.+6 7B./B 7+.B6 .6.+0
5ross ;rofit #argin $K% 6/.-+ +-..7 7B./6 7+.B6 .6.+0
(et ;rofit #argin $K% -+.*- ,6.B7 ,..,* 7,.6+ *-7.-,
AdAusted &ash #argin $K% -..+B ,6..0 ,,.76 7,.6+ *-7.-,
AdAusted 3eturn 2n (et
@orth $K%
0.07 B.+, B./7 +.66 0B.**
3eported 3eturn 2n (et
@orth $K%
0.6/ B.+, B./7 +.66 0B.**
3eturn 2n long 1erm Funds
$K%
*.-6 -.., B.7- ..06 7..B
.E'ERA)E RATI%S
:ong 1erm 'ebt M "Huity /./6 /.// /.// /.6- /.//
1otal 'ebtM"Huity /./6 /.*- /./* /.6- /.//
2wners fund as K of total
Source
7..-0 +..B- 7+.+/ ,B.// *//.//
Fixed Assets 1urnover 3atio ,.B0 -..76 *,+./.7, ..+* /.//
95
.I34I/IT6 RATI%S
&urrent 3atio 7,.B. 0./6 *.6- /.,6 /.6,
&urrent 3atio $Inc. S1
:oans%
7,.B. /.0- /.+6 /.,6 /.6,
Xuick 3atio 7,.6+ 0./* *.6- /.,6 /.6,
Inventory 1urnover 3atio *--.-B ++0..+ /.// /.// /.//
PA6%4T RATI%S
'ividend payout 3atio $(et
;rofit%
/.// +/..7 .-.*/ /.// /.//
'ividend payout 3atio $&ash
;rofit%
/./B +/.-6 .B./7 /.// /.//
"arning 3etention 3atio /.// *7.07 6B.7* *//.// /.//
&ash "arnings 3etention 3atio 77.+/ *7.B- 6-.70 *//.// /.//
C%'ERA)E RATI%S
AdAusted &ash Flow 1ime 1otal
'ebt
-/,.77 6.0* /.07 B.00 /.//
Financial &harges &overage 3atio /.-B ..,+ +.77 7B.*- /.0+
Fin. &harges &ov.3atio $;ost 1ax% /.0- ..+0 +.B- 7B.*- /.0+
C%*P%$E$T RATI%S
96
#aterial &ost &omponent$K earnings% /.// /.// /.// /.// /.//
Selling &ost &omponent ,.*6 6.B0 /.BB /.// /.//
"xports as percent of 1otal Sales /.// /.*0 /.// /.// /.//
Import &omp. in 3aw #at. &onsumed /.// /.// /.// /.// /.//
:ong term assets M 1otal Assets /.+/ /.7. /.7, /.77 /.,/
!onus &omponent In "Huity &apital $K% /.// /.// /.// /.// /.//
BA.A$CE SHEET
97
*ar N >; *ar N >: *ar N >9 *ar N >8 *ar N >7
S%4RCES %5 54$/S
%0nerNs 5und
"Huity Share &apital ,..07 ,../+ .B.B/ -/.// /.B6
Share Application #oney *,+//.*. /.// /.// /.// /.//
;reference Share &apital 0-.// /.// /.// /.// /.//
3eserves L Surplus .*,.*7 B/-.0B 006.+7 6..- /.**
.oan 5unds
Secured :oans /.// /.// /.// /.// /.//
=nsecured :oans /.// ,-.B/ 6.-/ *+.+- /.//
1otal 0,-*+..B --..,0 07*.,7 ,0.-/ /.60
4SES %5 54$/S>
5ixed Assets
5ross !lock 6.,6 /.-. /./* /.// /.//
:ess : 3evaluation 3eserve /.// /.// /.// /.// /.//
:ess : Accumulated 'epreciation /.6. /./- /.// /.// /.//
(et !lock 6.6, /.-* /./* /.// /.//
&apital @orkinprogress /./* /./, /.// /.// /.//
Investments 0,/06.-- -B-.0+ 0+7.+* ,0.-0 *.//
98
$et Current Assets
&urrent Assets, :oans L Advances B7..+* 0*.B0 ,.-6 /./B /.B0
:ess : &urrent :iabilities L ;rovisions -.*/ */.-, -.-. /./. *.**
1otal (et &urrent Assets B7*.,* */.+. *.7, /./0 /..7
#iscellaneous expenses not written /.// /.// /.// /.// /.//
1otal 0,-*+..B --..,0 07*.,7 ,0.-/ /.6*
!ook >alue of =nHuoted Investments *,/0-.,B B76.77 0.0.+/ /.// /.//
#arket >alue of Xuoted Investments **.0+ 6B.+, 07.,+ /.// /.//
&ontingent liabilities -+-./* 70./6 6/.// /.// /.//
(umber of "Huity shares outstanding $in
:acs%
,.0.7/ ,./.+B .B6.7, -//.// B.0-
I$C%*E STATE*E$T
*ar N >; *ar N >: *ar N >9 *ar N >8 *ar N >7
Income ,
2perating Income *0.-- 6*.+- *-.6+ B.-7 /./-
Ex&enses
#aterial &onsumed /.// /.// /.// /.// /.//
99
#anufacturing "xpenses /.// /.// /.// /.// /.//
;ersonnel "xpenses 7.++ *.,, /.6* /./* /.//
Selling "xpenses /.7/ *./7 /./, /.// /.//
Adminstrative "xpenses *0.BB B.*6 *.0, /./. /./0
"xpenses &apitalised ,.*B 0.B+ /.,6 /.// /.//
&ost 2f Sales *../+ B.-* /.70 /./,
/./0
2perating ;rofit 6.-6 0,.6B *B.B, B.-0 /./6
2ther 3ecurring Income *B.+7 /./- /.// /.// /.//
AdAusted ;!'I1 **.6, 0,.67 *B.B, B.-0 /./6
Financial "xpenses 0*./B B./B *..* /./- /.**
'epreciation /.6* /./- /.// /.// /.//
2ther @rite offs /.// /.// /.*7 /.// /.//
AdAusted ;!1 7.77 06.6* *0.., B.B, /./+
1ax &harges -.76 /.*6 /.+, /.// /.//e
AdAusted ;A1 *-.7* 06.BB **.+/ B.B, /./+
(on 3ecurring Items /.// /.// /.// /.// /.//
2ther (on &ash adAustments /./- /./* /../ /.,* /./.
3eported (et ;rofit *-.7. 06.B- **.+/ B.B, /./+
100
"arnigs !efore Appropriation ..-/ 6/.,0 *-.-- 6.-, /.*7
"Huity 'ividend /./* *,.67 ..,B /.// /.//
;reference 'ividend /.// /.// /.// /.// /.//
'ividend 1ax /.// *.-6 /.7- /.// /.//
3etained "arnings ..-* **.+/ ,.+. 6.-, /.*7
#ar ? /7 #ar ? /+ #ar ? /, #ar ? /. #ar ? /-

Sales *0.-- 6*.+. *-.6+ B.-7 /./-
2ther Income *B.7/ /./- /.// /.// /.//
Stock AdAustment /.// /.// /.// /.// /.//
3aw #aterial /.// /.// /.// /.// /.//
;ower And Fuel /.// /.// /.// /.// /.//
"mployee "xpenses */.,6 0.*+ /.B* /./* /.//
"xcise /.// /.// /.// /.// /.//
Admin And Selling "xpenses /.// /.// /.// /.// /.//
3esearch And 'evlopment "xpenses /.// /.// /.// /.// /.//
"xpenses &apitalised /.// /.// /.// /.// /.//
2ther "xpeses ..00 0.6B /..7 /./. /./0
;rovisions #ade /.// /.// /.// /.// /.//
101
2perating ;rofit B.B/ 0,.6B *B.0+ B.-0 /./6
Interest 0/.*, B./6 *..* /./- /.**
5ross ;rofit 7.., 06.6- *0.., B.B, /./+
'epreciation /.6* /./- /.// /.// /.//
1axation -.7+ /.*B /.+, /.// /.//
(et ;rofit M :oss *-.7. 06.B- **.+/ B.B, /./+
"xtra 2rdinary Item /.// /.// /.// /.// /.//
;rior Iear AdAustments /.// /.// /.// /.// /.//

"Huity &apital ,..07 ,../+ .B.B/ -/.// /.B6
"Huity 'ividend 3ate /.// /.// /.// /.// /.//
Agg.2f (on;rom. Shares $in :acs% 6-*./* 6B+.7. /.// /.// /.//
Agg.2f (on ;romoto8olding$K% B../* B-.+, /.// /.// /.//
2;#$K% 6-./- +-.+* 70.+6 7+.B6 .6.+0
5;#$K% 6-.0B ,6.*7 +0.6+ 7,.6+ *-7.-,
(;#$K% -+.*- ,6.B7 ,..,* 7,.6+ *-7.-,
";S $in 3s.% 0./7 6./+ *.+6 /.+7 *.,.
102
BIB.I%)RAPH6.
Reference Books.
*. ;rassana &handra. Financial magementF Seventh edition,1ata #c 5raw 8ill
;ublications.
0. #.I.<han and ;.<.9ainFinancial managementfifth edition 1ata #c 5raw 8ill
publications.
6. ;unithavathy ;andian security analysis and portfolio management.
<EBSITES.
*. @@@.IA822FI(A(&".&2#
0. @@@.#2("I&2(132:.&2#
3/ @@@.I&8A31S.I(.
103
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