Final Project

A STUDY ON THE FACTORS AFFECTING THE MARKET PRICE AD RETURNS
OF SHARES OF SELECTED COMPANIES FROM NIFTY
PROJECT REPORT
SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE

AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
IN ANNA UNIVERSITY- TRICHY
SUBMITTED
BY
M. GANESH
(REG NO. 81907501015)
Department Of Management Studies
Saranathan College of Engineering
(Affiliated To Anna University- TRICHY)
Trichy
June (2009)
BONAFIDE CERTIFICATE
This is certified that the project report titled “A STUDY ON THE FACTORS
AFFECTING THE MARKET PRICE AND RETURNS OF SHARES OF SELECTED
COMPANIES FROM NIFTY “is a bonafide work of Mr.M.GANESH (81907501015)
who carried out the research under my supervision. Certified further, that to the best of
my knowledge the work reported here in does not form part of any other project or
dissertation on the basis of which a degree of award conferred on earlier occasion on
this or any other candidate.
Prof.P.KOTHANDARAMAN S.VENKATRAMAN
Head of the Department Guide
Valued on _____________
Internal Examiner External Examiner

DECLARATION
I hereby declare that the project titled “A STUDY ON THE FACTORS

AFFECTING THE MARKET PRICE AND RETURNS OF SHARES OF SELECTED
COMPANIES FROM NIFTY “ submitted for MBA Degree is my original work
and the report has not formed the basis for the award of any degree or
fellowship or any other similar titles.
Station: M. GANESH
Date: Reg No:81907501015
ACKNOWLEDGEMENT
“We bow our heads Thee, and we laud, And magnify thy name Almighty God! But
man is thy most awful instrument, In working out a pure intent.”
I express my thanks to almighty, the guiding light of our life. For granting me potency
and courage to complete the project successfully.
I express my deep sense of gratitude to our beloved Principal Dr. S.Malayappan,

Saranathan College of Engineering, Trichy for providing me an opportunity to persuade
with this work.
I express my deep sense of gratitude to Dr.Y.Venkatramani Director Academics of

Saranathan College Of Engineering, Trichy for providing me an opportunity to persuade
with this work.
I take this opportunity to acknowledge my sincere thanks to Mr. P.Kothandaraman,

Professor and Head , Department of Management Studies, Saranathan College of
Engineering, Trichy, who gave me full support to undergo this full time Project.
I express my sincere thanks and gratitude to Mr. B.S.Chandra Mouli, Professor,

Department of Management Studies, Saranathan College of Engineering, Trichy. For his
tireless inspiration and valuable guidance.
I express my sincere thanks and gratitude to all the faculty members of the
Department of Management Studies for giving their helping hands for the successful
completion of this Project.
CHAPTERISATION
CHAPTER CONTENTS PAGE NO
I INTRODUCTION
II REVIEW OF LITERATURE
III RESEARCH METHODOLOGY
IV ANALYSIS AND INTERPRETATION OF DATA
V FINDINGS, SUGGESTIONS AND CONCLUSION
APPENDIX
BIBILIOGRAPHY
ABSTRACT
The researcher is interested in carrying out the study in this area in order to find out
the various fundamental, non-fundamental & the technical factors that affect the share price
movements cum their returns.
The researcher is interested in finding out the critical variables that influence the share
price movements of the selected 5 stocks from NSE based on the Market Capitalisation.
The researcher carried out the study using the ex-post facto type of research design in
his study. The researcher used the secondary data collection method in his study.
The researcher used the convenient type of sampling method in his study. The sample
size is taken as 5 companies listed in the NSE based on the Market Capitalisation. The
companies are as follows. (i) Reliance Industries Limited (ii) Oil and Natural Gas
Corporation Limited (iii) Infosys Technologies Limited (iv) Bharat Heavy Electricals Limited
(v) Indian Oil Corporation Limited
The researcher used the following financial tools namely
(a) P/E ratio (b) Price/Book value ratio (c) Dividend yield
(d) Beta (e) Return on equity (f) Debt-Equity
(g) Cash EPS (h) Interest coverage ratio (i) Return on net worth
(j) EPS (k) Return on Capital Employed(l) Total Return
The researcher used the following statistical tools namely
(1) T-test (2) One Way Annova
(3) Trend (4) Factor Analysis.
Based on the analysis and interpretation the researcher arrived at the major findings in
his study and the suggestions are given by the researcher in such a way so that the market
price cum returns will not have a very high degree of volatility and thus the wealth
maximisation of the share holders has been safeguarded.
INTRODUCTION
Stock market indices are the barometers of the stock market. They mirror the stock
market behaviour and the broad trends in the market. There are large number of companies
listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) and it is
not possible to look at the prices of every stock to find out whether the market movement is
upward or downward.
The indices like BSE sensex (Sensitivity Index) and S&P CNX Nifty (NSE 50 Index)
give a broad outline of the market movement and represent the market. The main criteria for
selection of the scrips to be included in the indices are: Market capitalization, Liquidity,
and proper representation of all industries in the economy.
There are several fundamental, non-fundamental, and technical factors, which

influence the market price of the scrips constituting the index and thereby have a bearing on
the behaviour of the entire market. There are different variables, which assume greater
significance in different years depending on the prevailing economic and stock market
conditions.
The main problem is to identify the major variables in the form of factors, which have
significant bearing on the movement of the sensex, which is the most comprehensive
representative of the Indian Stock Market.
There has been extensive research on the various fundamental, non-fundamental, and
technical factors affecting the share price movements and stock returns over a period of time.
The various research studies have clearly exhibited many contradictory results, with some
studies pointing out some critical variables greatly influencing the share prices while others
have found these same set of variables as minor elements having little impact on the share
prices. The studies pertaining to Indian stock markets vis-a-vis the other international stock
markets have also shown vast differences existing among these markets.
There can be many reasons for these behavioural differences which can be attributed
to factors, such as market efficiency, liquidity and transparency, volatility in the markets, the
participation and confidence of retail investors in the stock markets, in the regulatory
practices, standardization of accounting and auditing procedures, risk containment
mechanisms, and technological advancements. These and other factors greatly influence the
way these stock markets behave over a period of time.
The major fundamental variables such as Price – Earning ratio, Return on Capital
Employed, Return on net worth, Debt to Equity, Price to Book Value Ratio, Dividend Yield,
Cash EPS, Return on Equity, Total Return, Interest Coverage Ratio, Earnings per share &
Beta.
1.1.1 PRICE-EARNING RATIO:
P-E ratio expresses the relationship between the market price of a company’s share and its
earning per share. It indicates the extent to which earnings of each share are covered by price.
The ratio helps an investor to make an appropriate calculation of time required to recover this
investment in a company’s share. The Price-Earning ratio has a positive relationship with
market price (Dixit, 1986 and Gupta 2000). It is calculated as follows:
P/E = Market Price Per share / Earnings Per share
1.1.2 RETURN ON CAPITAL EMPLOYED:
The return on capital employed indicates the efficiency with which a company utilizes the
funds invested in it. This ratio reveals how well the resources of a firm are being used. The
higher the ratio, the better are the results. It is a measure of general management performance
in relation to capital invested in business. The interfirm comparison of this ratio determines
whether the investments are attractive or not as the investor would like to invest only where
the return is higher. It is also known as return on net assets. It generally has positive
relationship with the market price of share. (Sharma and Singh, 2006; and Malhotra and
Prakash, 2001). It is calculated as follows:
ROCE = Profit before interest and Tax / Total Capital Employed
1.1.3 RETURN ON NETWORTH:
The return on networth indicates the profitability of equity funds invested in the firm. It is
regarded as a very important measure because it reflects the productivity of equity capital
invested in the firm. It is calculated as follows:
RONW = Profit after Tax / Paid Up Equity Capital + Reserves and Surplus.
1.1.4 DEBT TO EQUITY RATIO (D/E)

It indicates the amount of leverage. The higher the debt component in the capital structure,
the higher is the leverage and greater is the risk. It generally has no relation or insignificant
relation with share price (Dixit, 1983; and Tulsi et al., 2001). It is calculated as follows
Debt to Equity Ratio = (Long-term Debt + Short term debt) / Share holders Equity
1.1.5 PRICE TO BOOK VALUE RATIO:
It reflects that the price investors are willing to pay for every rupee of book value per share. It
is calculated as follows:
P/B = Market Price per share / Book Value per share
1.1.6 DIVIDEND YIELD:
It represents the current cash return to the shareholder. It has positive relationship with share
price (Zahir and Yakesh, 1982). It can be calculated as follows:
Dividend Yield = (Dividend per share / Market price per share) * 100
1.1.7 TOTAL RETURN
Total Return/Total No. Of time periods. It has been found that in Indian stock market, there is
seasonality in the monthly return (Pandey, 2002) and distribution of monthly return follows
normal distribution (Obaidullah, 1991). The total return on an investment for a given period
is calculated as follows:
Total Return = (Cash Payment Received during the period + Price Change Over the Period) /
Price of the Investment at the Beginning.
1.1.8 BETA
It reflects the risk of a stock and measures how sensitive are the return on the stock to
variation in the market return. It can be calculated by CAPM model:
Required Return = Risk-free Return + Beta (Market Risk Premium)
1.1.9 CASH EPS

A measure of financial performance that looks at the cash flow generated by a company on a
per share basis. This differs from basic Earnings per share (EPS), which looks at the net
income of the company on a per share basis. The higher a company’s cash EPS, the better it
is considered to have performed over a period. The point of cash EPS is that it’s a stricter
number than EPS because operating cash flow cannot be manipulated as easily as net income,
and represents the real cash earned. It can be calculated as follows:
Cash EPS = (Net Income + Depreciation) / No. Of shares Outstanding.
1.1.10 EARNINGS PER SHARE :
The equity shareholders are the sole claimants to the net earnings of the corporation after
making payment of dividend to the preference shareholders. The significance of this ratio
flows from the fact that higher earnings per share, the more is the scope for a higher rate of
dividend and also retained earnings, to build up the inner strength of the company. Therefore,
a higher EPS would increase the market price and vice versa. Several event based studies
established a direct relation between share price changes with earnings and dividend changes
(Ball and Brown, 1968; and Baskin, 1989). It is calculated as follows:
EPS = (Profit after Tax – Preference Dividend) / Total No. Of Equity Shares
1.1.11 INTEREST COVERAGE RATIO
This shows how many times the operating income covers the interest payment. The Interest
Coverage Ratio is calculated as follows:
Interest Coverage Ratio = EBIT / INTEREST
1.1.12 RETURN ON EQUITY
The Return on assets and the return on equity will be identical, the company carries out all of
its operations with owners fund. The difference between the two ratios is caused by financial
leverage. When both the ratios are compared the Return on Equity is greater than Return on
Assets. It indicates that the company employed borrowed funds efficiently to lever the rate of
the return to the advantage of shareholders. The formula to compute the Rate of Return on
Equity is given by Return on Equity = Net Profit / Net Worth.
1.2 COMPANY PROFILE

1.2.1 Reliance Industries
The Reliance Group, founded by Dhirubhai H. Ambani (1932 - 2002), is India’s

largest private sector enterprise, with business in the energy and materials value chain.
Group’s annual revenues are in excess of US$ 34 billion. The flagship company, Reliance
Industries Limited, is a Fortune Global 500 company and is the largest private sector
company in India.
Backward vertical integration has been the cornerstone of the evolution and growth of
Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward
vertical integration – in polyester, fibre intermediates, plastics, petrochemicals, petroleum
refining and oil and gas exploration and production – to be fully integrated along the
materials and energy value chain.
The Group’s activities span exploration and production of oil and gas, petroleum
refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and
chemicals), textiles, retail and special economic zones.
The Group exports products in excess of US$ 20 billion to 108 countries in the world.
Major Group companies are Reliance Industries Limited (Including main subsidiaries
Reliance Petroleum Limited and Reliance Retail Limited) and Reliance Industrial
Infrastructure Limited.
1.2.2 Oil and Natural Gas Corporation Limited
The liberalized economic policy, adopted by the Government of India in July 1991,
sought to deregulate and de-license the core sectors (including petroleum sector) with partial
disinvestment of government equity in Public Sector Undertakings and other measures. As a
consequent thereof, ONGC was re-organized as a limited Company under the Company’s
Act, 1956 in February 1994.
After the conversion of business of the erstwhile Oil and Natural Gas Commission to
that of Oil & Natural Gas Corporation Limited in 1993, the Government disinvested 2 per
cent of its shares through competitive bidding. Subsequently, ONGC expanded its equity by
another 2 per cent by offering shares to its employees.
During March 1999, ONGC, Indian Oil Corporation (IOC) – a downstream giant and
Authority of India Limited (GAIL) – the only gas marketing company, agreed to have cross
holding in each other’s stock. This paved the way for long-term strategic alliances both for
the domestic and overseas business opportunities in the energy value chain, amongst
themselves. Consequent to this the Government sold off 10 per cent of its share holding in
ONGC to IOC and 2.5 per cent to GAIL. With this, the Government holding in ONGC came
down to 84.11 per cent.
After Independence, the national Government realized the importance oil and gas for
rapid industrial development and its strategic role in defense. Consequently, while framing
the Industrial Policy Statement of 1948, the development of petroleum industry in the country
was considered to be of utmost necessity.
1.2.3 Infosys Technologies Limited
Infosys Technologies Ltd. (NASDAQ: INFY) was started in 1981 by seven people
with US$ 250. Today, we are a global leader in the “next generation” of IT and consulting
with revenues of over US$ 4 billion.
Infosys defines, designs and delivers technology-enabled business solutions that help
Global 2000 companies win a Flat World. Infosys also provides a complete range of services
by leveraging our domain and business expertise and strategic alliances with leading
technology providers.
Infosys offerings span business and technology consulting, application services,

systems integration, product engineering, custom software development, maintenance, re-
engineering, independent testing and validation services, IT infrastructure services and
business process outsourcing.
Infosys pioneered the Global Delivery Model (GDM), which emerged as a disruptive
force in the industry leading to the rise of offshore outsourcing The GDM is based on the
principle of taking work to the location where the best talent is available, where it makes the
best economic sense, with the least amount of acceptable risk.
Infosys takes a pride in building strategic long-term client relationships. Over 97% of
our revenues come from existing countries.
1.2.4 Bharat Heavy Electricals Limited

BHEL is the largest engineering and manufacturing enterprise in India in the energy
related / Infrastructure sector, today. BHEL was established more than 40 years ago, ushering
in the indigenous Heavy Electrical Equipment Industry in India – a dream that has been more
than realized with a well-recognized track record of performance. The company has been
earning profits continuously since 1971-72 and paying dividends since 1976-77.
BHEL manufactures over 180 products under 30 major product groups and caters to
core sectors of the Indian Economy viz., Power Generation & Transmission, Industry,
Transportation, Telecommunication, Renewable Energy, etc. The wide network of BHEL’s
14 manufacturing divisions, four Power Sector regional centers, over 100 project sites, eight
service centers and 18 regional offices, enables the Company to promptly serve its customers
and provide them with suitable products, systems and services efficiently and at competitive
prices. The high level of quality and reliability of its products is due to the emphasis on
design, engineering and manufacturing to international standards by acquiring and adapting
some of the best technologies from leading companies in the world, together with
technologies developed in its own R & D centers.
BHEL has acquired certifications to Quality Management System (ISO 9001),

Environmental Management Systems (ISO 14001) and Occupational Health & Safety
Management Systems (OHsas 18001) and is also well on its journey towards Total Quality
Management.
1.2.5 Indian Oil Corporation Limited
Indian Oil Corporation Limited is currently India’s largest company by sales with a
turnover of Rs. 247,479 crore (US $59.22 billion), and profit of Rs,6963 corers (US $
1.67billion) for fiscal 2007.
Indian Oil is also the highest ranked Indian company in the prestigious Fortune
‘Global 500’ listing, having moved up 19 places to the 116th position in 2008. It is also the
18th largest petroleum company in the world. Indian Oil’s Vision is driven by a group of
dynamic leaders who have made it a name to reckon with.
Indian Oil is currently metamorphosing from a pure sectoral company with

dominance in downstream in India to a vertically integrated, transnational energy behemoth.
The Corporation is already on the way to becoming a major player in petrochemicals by
integrating its core refining business with petrochemical activities, besides making large
investments in E&P and import/marketing ventures for Oil & gas in India and abroad.
Besides two refining subsidiaries of Chennai Petroleum Corporation Limited are

operational in Sri Lanka, Mauritius and UAE.
With a vision to evolve in to a major technology provider through excellence in

management of knowledge and innovation, Indian Oil has launched Indian Oil Technology
Limited to market the intellectual properties developed by Indian Oil’s R & D centre.
REVIEW OF LITERATURE
(2.1) Gupta (2000) has tracked the returns of Sensex from 1980 to 1999 and found
P/E ratios, rate of EPS, and the duration of holding periods of investment to be important
determinants of future equity returns.
(2.2) Controy et al. (2000) studied the pricing effects of dividend and earnings
announcements in Japan and found that share price reactions were significantly affected by
earning surprises. Dechow et al. (2000) have found that firms with low ratios of
fundamentals, such as earnings and book value to market value, were known to have
systematically lower future returns. The observation was consistent with short sellers using
information in these ratios to take position in these stocks with lower expected future returns.
Irfan and Nishat (2000) identified the joint effect of multiple factors in Karachi Stock
Exchange during 1981 - 2000. Out of the six fundamental factors, only four has impact on
share prices-payout ratio, size, yield, and leverage.
(2.3) Tuli Nishi and Mittal (2001) made an attempt to determine price-earning ratio
of 105 companies in India for the period 1989-93 and found variability in market price,
dividend payout ratio, and earning per share to be significant variables whereas size, debt
equity ratio, and growth were insignificant.
(2.4) Pandey (2002) analyzed the monthly return data of BSE from 1991 to 2002
and found the existence of seasonality in the monthly stock return in India. The analysis of
descriptive statistics showed the maximum average return (positive) occurred in February and
the lowest (negative) in March. The positive average returns arose for six months and
negative for the next six months. Malakar and Gupta (2002) tested data on determinants of
share price of eight major cement companies from 1968 to 1988 and found earnings per share
and investment expenditure to be significant determinants of share price.
(2.5) Sehgal (2003) observed that the Fama-French asset pricing model, which
considers the market size and book-to-market equity factors as major determinants in stock
returns, is very much applicable to the Indian Stock Market.
(2.6) Ahmad et al., (2005) found that after analysing the daily closing data of
Nasdaq in the US, the Nikkei in Japan and the BSE Sensex in India from 1999 to 2004 found
that there is no long - term relationship of the Indian equity market with the US and Japanese
equity market.
(2.7) Person and Harvey (1997) provided a global pricing perspective on the debate
over the relationship between predetermined attributes of common stocks, (viz., ratios of
price-to-book-value, cash-flow, and earnings) and other variables to the future returns.
(2.8) Vaidyanathan and Chava (1998) tested the role of high and low price to book
ratios on stock returns and found that low price to book ratios yielded higher returns than
higher to book ratios from 1990 to 1996. Chaturvedi (2000) used event study methodology to
analyze the ability of P/E ratio to discriminate under performing and over performing stocks.
(2.9) Lee (1998) identified various components of stock prices and examined the
response of stock prices to different type of stocks: permanent and temporary changes in
earnings and dividends, changes in discount factors, and non-fundamental factors. The
analysis was conducted on nonlinear structural VAR framework and concluded that half of
the yearly variations in prices are not related to either earnings or dividend changes.
(2.10) Jia and Lilian (1994) investigated whether size and book-to-Market values of
equity (BM) are proxying for macroeconomic risks found in Chen, Roll and Ross’s (CRR)
multifactor model or are measures of stock risk exposure to relative distress and found that
size and BM are related to relative distress and that relative distress can explain the size
effect, but only partially the effect of BM, on average stock returns.
RESEARCH METHODOLOGY
(3.1) Statement of the problem:
The researcher is interested in finding out how the factors like market
efficiency, liquidity has an impact towards determining the market price
mechanism of the selected 5 shares from the NSE.
(3.2) Research design:
The researcher used Ex-posto- facto type of research design in his study.
(3.3) Objectives of the study:
(I) Primary objective:
(1) To study and to analyse the crucial variables that determine the market
price mechanism of the selected 5 scrips from the NSE.
(II) Secondary objectives:
(1) To study and to analyse the influence of P/E ratio on the market price
mechanism of the NSE.
(2) To study and to analyse the stock market returns and its reflection on the
share prices.
(3) To study and to analyse to what extent the stock market provides safety to
the investors.
(4) To study and to analyse the impact of critical factors towards determining
the market price mechanism of the selected 5 scrips from NSE .
(5) To study and to analyse the impact of cash EPS on the market price
mechanism of the selected 5 scrips from NSE .
(3.4) Data sources:
The researcher used the secondary data collection method in his study and for
this purpose the researcher collected ample data from the web site of
www.nseindia.com of 5 companies being listed in the NSE . The data is
checked out for its reliability and validity before carrying out the study
(Balance Sheet, P & L, of 5 companies)
(3.5) Sampling Technique:

The researcher used convenient type of sampling method in his study. The
sample size is taken as 5 companies being listed in NSE. The Companies are
as follows (i) Reliance Industries Limited (ii) Oil and Natural Gas Corporation
Limited (iii) Infosys Technologies Limited (iv) Bharat Heavy Electricals
Limited (v) Indian Oil Corporation Limited.
(3.6) Scope of the study:
The study is confined only to the selected 5 companies being listed in the
NSE.
(3.7) Analysis and Interpretation:

The researcher used the following financial tools namely:
(a) P/E ratio (b) Price/Book value ratio (c) Dividend yield
(d) Beta (e) Return on equity (f) Debt-Equity
(g) Cash EPS (h) Interest coverage ratio (i) Return on net worth
(j) EPS (k) Return on Capital Employed(l) Total Return
The formulae are as follows:
(a) P/E = Market Price Per share / Earnings Per share
(b) P/B = Market Price per share / Book Value per share
(c) Dividend Yield = (Dividend per share / Market price per share) * 100
(d) Required Return = Risk-free Return + Beta (Market Risk Premium)
(e) Return on Equity = Net Profit / Net Worth.
(f) Debt-Equity = (Long-term Debt + Short term debt) / Share holders Equity
(g) Cash EPS = (Net Income + Depreciation) / No. Of shares Outstanding.
(h) Interest Coverage Ratio = EBIT / INTEREST
(i) RONW = Profit after Tax / Paid Up Equity Capital + Reserves and Surplus.
(j) ROCE = Profit before interest and Tax / Total Capital Employed
(k) Total Return = (Cash Payment Received during the period + Price Change
Over the Period) / Price of the Investment at the Beginning.
The researcher used the following statistical tools namely
(1) T-test (2) One Way Annova
(3) Trend (4) Factor Analysis.
(3.8) Limitations of the Study:
(i) The study is confined only to the selected 5 companies from NSE
(ii) The sample size is restricted to 5 due to the time constraint .
RELIANCE INDUSTRIES LIMITED
Table 4.1.1: Table showing the Price Earning Ratio for a period of Five years with special
reference to Reliance Industries Limited.
Year Market price of the Earnings per Price Earning ratio

share share
2003-04 441.66 36.95 11.95
2004-05 506.90 54.34 9.33
2005-06 719.42 65.08 11.05
2006-07 1365.74 85.71 15.93
2007-08 2241.59 133.86 16.75
Inference: From the above table it is inferred that the Price Earning Ratio records the
maximum during the financial year 2007 - 08 & it records the minimum during the financial
year 2004 - 05 with special reference to Reliance Industries Limited.
Table 4.1.2: Table showing the Return on Capital Employed for a period of Five years with
special reference to Reliance Industries Limited.
Year Profit before interest Total capital Return on capital

and tax employed employed
2003-04 10998.53 31718.92 0.347
2004-05 14283.96 37673.44 0.379
2005-06 15005.70 45154.07 0.332
2006-07 20642.80 61255.02 0.337
2007-08 29028.18 78894.94 0.368

Inference: From the above table it is inferred that the Return On Capital Employed records
the maximum during the financial year 2004 - 05 & it records the minimum during the
financial year 2005 – 06 with special reference to Reliance Industries Limited.
Table 4.1.3: Table showing the Return On Net worth for a period of Five years with special
Year Profit after Tax Total net worth Return on Net worth
2003-04 5160.14 34452.45 0.1497
2004-05 7571.68 40403.32 0.1874
2005-06 9069.34 49804.26 0.1821
2006-07 11943.40 63967.13 0.1867
2007-08 19458.29 81448.60 0.2389
Inference: From the above table it is inferred that the Return On Net Worth records the
Table 4.1. 4: Table showing the Debt to Equity for a period of Five years with special
Year Debt Equity Debt to Equity
2003-04 28217.77 31718.92 0.889
2004-05 29737.88 37673.44 0.789
2005-06 29211.9 45154.07 0.646
2006-07 35427.18 61255.02 0.578
2007-08 38821.33 78894.94 0.492
Inference: From the above table it is inferred that the Debt to Equity records the maximum
during the financial year 2003 - 04 & it records the minimum during the financial year
2007 - 08 with special reference to Reliance Industries Limited.
Table 4.1 5: Table showing the Price to Book Value Ratio for a period of Five years with
Year Market price of Book Value of the Price to Book

the share share Value Ratio
2003-04 441.66 227.15 1.94
2004-05 506.90 270.35 1.88
2005-06 719.42 324.03 2.22
2006-07 1365.74 439.57 3.11
2007-08 2241.59 542.74 4.13
Inference: From the above table it is inferred that the Price to Book Value Ratio records the
Table 4.1.6: Table showing the Dividend Yield for a period of Five years with special
Year Dividend Per Market price per Dividend Yield

Share share (%)
2003–04 5.25 441.66 1.18
2004-05 7.50 506.90 1.47
2005-06 10.00 719.42 1.39
2006-07 10.33 1365.74 0.75
2007-08 11.22 2241.59 0.50
Inference: From the above table it is inferred that the Dividend Yield records the maximum
during the financial year 2004 – 05 & it records the minimum during the financial year
2007 – 08 with special reference to Reliance Industries Limited.
Table 4.1.7: Table showing the Cash EPS for a period of Five years with special reference to
Reliance Industries Limited.
Year Net Income + No. Of shares Cash EPS

Depreciation outstanding
2003-04 8491.53 139.59 60.83
2004-05 11356.25 139.31 81.51
2005-06 12470.25 139.32 89.51
2006-07 16758.55 139.31 120.29
2007-08 24305.43 145.34 167.23
Inference: From the above table it is inferred that the Cash EPS records the maximum during
the financial year 2007 – 08 & it records the minimum during the financial year 2003 – 04
with special reference to Reliance Industries Limited.
Table 4.1.8: Table showing the Return On Equity for a period of Five years with special
Year Net Profit Net worth Return On Equity

(%)
2003-04 5160.14 34452.45 14.97
2004-05 7571.68 40403.32 18.74
2005-06 9069.34 49804.26 18.20
2006-07 11943.40 63967.13 18.67
2007-08 19458.29 81448.60 23.89
Inference: From the above table it is inferred that the Return of Equity records the maximum
Table 4.1.9: Table showing the Total Return for a period of Five years with special reference
to Reliance Industries Limited.
Year Cash payment received Price of the Total

during the period + Price investment in the Return
change over during the beginning (%)
period
2003-04 260.48 227.15 1.15
2004-05 8.75 270.35 0.032
2005-06 250.3 324.03 0.772
2006-07 1224.33 439.57 2.78
2007-08 248.27 542.74 0.457
Inference: From the above table it is inferred that the Total Return records the maximum
Table 4.1.10: Table showing the Interest Coverage Ratio for a period of Five years with
Year EBIT Interest Interest Coverage Ratio

(Times)
2003-04 6695.18 1443.40 5.37
2004-05 9204.8 1486.54 7.11
2005-06 10158.39 893.61 12.98
2006-07 13444.32 1298.90 12.18
2007-08 20898.42 1162.90 20.79
Inference: From the above table it is inferred that the Interest Coverage Ratio records the
maximum during the financial year 2007 – 08 & it records the minimum during the financial
year 2003 – 04 with special reference to Reliance Industries Limited.
Table 4.1.11: Table showing the Earnings Per Share for a period of Five years with special
Year Earnings Per Share

2003 – 04 36.95
2004 – 05 54.34
2005 – 06 65.08
2006 – 07 85.71
2007 – 08 133.86
Inference: From the above table it is inferred that the Earnings Per Share records the
year 2003 – 04 with special reference to Reliance Industries Limited.
Table 4.1.12: Table showing the Beta status for the period of Five years with special
Year Beta Status

2003 – 04 0.07871
2004 – 05 0.28303
2005 – 06 0.29225
2006 – 07 0.46459
2007 – 08 -0.87854
Inference : From the above table it is inferred that the Beta records the maximum during the
financial year 2006 – 07 & minimum during the financial year 2007 – 08 with special
OIL & NATURAL GAS CORPORATION LIMITED
reference to Oil & natural gas corporation Limited.

share share
2003-04 609.19 60.76 10.02
2004-05 771.37 91.05 8.47
2005-06 1046.72 101.20 10.34
2006-07 945.13 73.14 12.92
2007-08 1009.34 78.09 12.93
year 2004 - 05 with special reference to Oil & natural gas corporation Limited.
special reference to Oil & natural gas corporation Limited.

2003-04 18079.30 40543.1 0.445
2004-05 24981.75 46845.4 0.533
2005-06 29495.25 53959.7 0.547
2006-07 31393.14 61923.9 0.506
2007-08 33983.06 70617.4 0.481
financial year 2003 – 04 with special reference to Oil & natural gas corporation Limited.
2003-04 8664.45 40543.10 0.214
2004-05 12983.05 46645.42 0.278
2005-06 14430.78 53959.67 0.267
2006-07 15642.92 61923.93 0.253
2007-08 16701.95 70617.40 0.237
Table 4.2.4: Table showing the Debt to Equity for a period of Five years with special
2003-04 14517.73 40543.1 0.358
2004-05 37821.16 46845.4 0.807
2005-06 47638.17 53959.7 0.883
2006-07 59601.19 61923.9 0.962
2007-08 44311.11 70617.4 0.627
2003 - 04 with special reference to Oil & natural gas corporation Limited.
Table 4.2.5: Table showing the Price to Book Value Ratio for a period of Five years with

2003-04 609.19 284.33 2.14
2004-05 771.37 328.52 2.35
2005-06 1046.72 378.42 2.76
2006-07 945.13 195.41 3.26
2007-08 1009.34 235.84 3.05
Year Dividend Per Market price per Dividend

Share share Yield(%)
2003–04 24 609.19 0.039
2004-05 40 771.37 0.051
2005-06 45 1046.72 0.042
2006-07 31 945.13 0.032
2007-08 32 1009.34 0.032
during the financial year 2004 – 05 & it records the minimum during the financial years
2006 – 07 & 2007 – 08 with special reference to Oil & natural gas corporation Limited.
Oil & natural gas corporation Limited.

2003-04 10432.47 142.59 73.16
2004-05 14807.27 142.59 103.84
2005-06 18283.54 142.59 128.22
2006-07 18935.72 213.89 88.53
2007-08 20617.72 213.89 96.39
with special reference to Oil & natural gas corporation Limited.
Table 4.2.8: Table showing the Return on Equity for a period of Five years with special
Year Net Profit Net worth Return On

Equity(%)
2003-04 8664.45 40543.10 14.97
2004-05 12983.05 46645.42 27.8
2005-06 14430.78 53959.67 26.7
2006-07 15642.92 61923.93 25.3
2007-08 16701.95 70617.40 23.7
2003 – 04 with special reference to Oil & natural gas corporation Limited.
to Oil & natural gas corporation Limited.

during the period + Price investment in the Return(%)
change over during the beginning
period
2003-04 487.6 284.33 1.71
2004-05 48.6 328.52 0.148
2005-06 430.55 378.42 1.13
2006-07 433.6 195.41 1.49
2007-08 102.95 235.84 0.311
2004 – 05 with special reference to Oil & natural gas corporation Limited.
Year EBIT Interest Interest Coverage

Ratio(Times)
2003-04 16376.25 2753.03 5.94
2004-05 23217.39 3548.39 6.54
2005-06 25470.05 3718.44 6.84
2006-07 27408.75 3724.81 7.35
2007-08 30660.58 5016.88 6.11
year 2003 – 04 with special reference to Oil & natural gas corporation Limited.

2003 – 04 60.76
2004 – 05 91.05
2005 – 06 101.20
2006 – 07 73.14
2007 – 08 78.09
year 2003 – 04 with special reference to Oil & natural gas corporation Limited.
Table 4.2.12: Table showing the Beta status for the period of Five years with special
Year Beta Status

2003 – 04 0.19346
2004 – 05 0.38623
2005 – 06 0.33779
2006 – 07 0.68004
2007 – 08 -0.64255
financial year 2006 - 07 & minimum during the financial year 2007 - 08 with special
INFOSYS TECHNOLOGIES LIMITED
reference to Infosys Technologies Limited.

share share
2003-04 4296.47 186.59 23.03
2004-05 2784.08 70.38 39.59
2005-06 2543.34 87.86 28.95
2006-07 2278.19 66.23 34.39
2007-08 1776.96 78.15 22.74
year 2007 - 08 with special reference to Infosys Technologies Limited.
special reference to Infosys Technologies Limited.

2003-04 1702.12 3253.43 0.523
2004-05 2498.99 5241.73 0.477
2005-06 3134.00 6897 0.462
2006-07 4605.00 11162 0.412
2007-08 5647.00 13490 0.419
financial year 2006 – 07 with special reference to Infosys Technologies Limited.
2003-04 1243.37 3253.43 0.382
2004-05 1904.38 5241.73 0.363
2005-06 2421.00 6897 0.351
2006-07 3783.00 11162 0.339
2007-08 4470.00 13490 0.331
2003-04 1883.52 3253.43 0.57
2004-05 1346.04 5241.73 0.26
2005-06 221700 6897 0.33
2006-07 1824 11162 0.16
2007-08 3731 13490 0.28
2006 - 07 with special reference to Infosys Technologies Limited.

2003-04 4296.47 488.20 8.80
2004-05 2784.08 193.73 14.37
2005-06 2543.34 250.29 10.16
2006-07 2278.19 195.41 11.65
2007-08 1776.96 235.83 7.53

2003–04 25.9 4296.47 0.60
2004-05 22.89 2784.08 0.82
2005-06 89.71 2543.34 3.52
2006-07 22.69 2278.19 1
2007-08 66.50 1776.96 3.74
2003 – 04 with special reference to Infosys Technologies Limited.
Infosys Technologies Limited.

2003-04 4574.86 6.664 221.24
2004-05 5688.95 27.054 80.30
2005-06 5821.91 27.556 102.69
2006-07 8598.15 57.121 74.44
2007-08 9317.14 57.197 87.69
the financial year 2003 – 04 & it records the minimum during the financial year
Table 4.3.8: Table showing the Return of Equity for a period of Five years with special

Equity(%)
2003-04 1243.37 3253.43 38.2
2004-05 1904.38 5241.73 36.3
2005-06 2421.00 6897 35.1
2006-07 3783.00 11162 33.9
2007-08 4470.00 13490 33.1
to Infosys Technologies Limited.

change over during the beginning
period (%)
2003-04 1911.17 488.20 1.86
2004-05 2683.29 193.73 13.85
2005-06 733.17 250.29 2.92
2006-07 965.01 195.41 4.93
2007-08 585.4 235.83 2.48

Ratio(Times)
2003-04 6695.18 1443.40 1962.28
2004-05 9204.8 1486.54 2046.5
2005-06 10158.39 893.61 2725
2006-07 13444.32 1298.90 4136
2007-08 20898.42 1162.90 5101
year 2003 – 04 with special reference to Infosys Technologies Limited.

2003 – 04 186.59
2004 – 05 70.38
2005 – 06 87.23
2006 – 07 66.23
2007 – 08 78.15
year 2006 – 07 with special reference to Infosys Technologies Limited.
Table 4.3.12: Table showing the Beta status for a period of Five years with special reference
to Infosys Technologies Limited.
Year Beta Status

2003 – 04 0.03106
2004 – 05 0.33133
2005 – 06 0.1518
2006 – 07 0.11312
2007 – 08 -0.2229
BHARAT HEAVY ELECTRICALS LIMITED
reference to Bharat Heavy Electricals Limited.

share share
2003-04 409.23 26.89 15.22
2004-05 631.78 38.95 16.22
2005-06 1312.78 68.60 19.14
2006-07 2258.95 98.66 22.89
2007-08 2113.63 58.41 36.19
year 2003 - 04 with special reference to Bharat Heavy Electricals Limited.
special reference to Bharat Heavy Electricals Limited.

2003-04 868.59 5295.54 0.164
2004-05 1563.35 6026.89 0.259
2005-06 2565.60 7301.38 0.351
2006-07 4027.52 8788.26 0.458
2007-08 4731.40 10774.21 0.439
financial year 2003 – 04 with special reference to Bharat Heavy Electricals Limited.
2003-04 658.15 5295.54 0.124
2004-05 953.40 6026.89 0.158
2005-06 1679.17 7301.38 0.229
2006-07 2414.70 8788.26 0.275
2007-08 2859.34 10774.21 0.266
2003-04 6979.60 5295.54 1.32
2004-05 9074.44 6026.89 1.50
2005-06 13054.46 7301.38 1.78
2006-07 17665.57 8788.26 2.01
2007-08 24241.65 10774.21 2.25
2003 - 04 with special reference to Bharat Heavy Electricals Limited.

2003-04 409.23 216.37 1.89
2004-05 631.78 246.24 2.57
2005-06 1312.78 298.31 4.40
2006-07 2258.95 359.06 6.29
2007-08 2113.63 220.10 9.60

2003–04 6.00 409.23 1.46
2004-05 8.00 631.78 1.26
2005-06 14.49 1312.78 1.10
2006-07 24.49 2258.95 1.08
2007-08 15.25 2113.63 0.72
2007 – 08 with special reference to Bharat Heavy Electricals Limited.
Bharat Heavy Electricals Limited.

2003-04 856.15 24.48 34.97
2004-05 1172.27 24.48 47.89
2005-06 1925.1 24.48 78.65
2006-07 2659.31 24.48 108.65
2007-08 3118.23 48.95 63.69
with special reference to Bharat Heavy Electricals Limited.

Equity(%)
2003-04 658.15 5295.54 12.43
2004-05 953.40 6026.89 15.82
2005-06 1679.17 7301.38 22.99
2006-07 2414.70 8788.26 27.48
2007-08 2859.34 10774.21 26.54
to Bharat Heavy Electricals Limited.

change over during the beginning (%)
period
2003-04 381.8 216.37 1.05
2004-05 162.85 246.24 0.66
2005-06 148.95 298.31 7.17
2006-07 21.84 359.06 0.13
2007-08 201.53 220.10 1.39

Ratio(Times)
2003-04 1067.16 60.08 17.76
2004-05 1651.11 81.41 20.28
2005-06 2619.52 58.75 44.58
2006-07 3769.12 43.33 86.98
2007-08 4459.82 35.42 125.91
year 2003 – 04 with special reference to Bharat Heavy Electricals Limited.
2003 – 04 26.89
2004 – 05 38.95
2005 – 06 68.60
2006 – 07 98.66
2007 – 08 58.41
year 2003 – 04 with special reference to Bharat Heavy Electricals Limited.
to Bharat Heavy Electricals Limited
Year Beta Status

2003 – 04 0.20091
2004 – 05 0.38458
2005 – 06 0.48661
2006 – 07 0.46282
2007 – 08 -0.5206
.
financial year 2005 – 06 & minimum during the financial year 2007 - 08 with special
INDIAN OIL CORPORATION LIMITED

reference to Indian Oil Corporation Limited.

share share
2003-04 397.79 59.97 6.63
2004-05 435.87 41.88 10.41
2005-06 437.35 42.08 10.39
2006-07 461.29 64.21 7.18
2007-08 492.91 58.39 8.44
year 2003 - 04 with special reference to Indian Oil Corporation Limited.
special reference to Indian Oil Corporation Limited.

2003-04 11883.73 23047.41 0.5156
2004-05 8634.66 25984.36 0.3323
2005-06 9430.31 29302.67 0.3218
2006-07 14624.78 34857.29 0.4199
2007-08 14454.98 41086.25 0.3518
financial year 2005 – 06 with special reference to Indian Oil Corporation Limited.
2003-04 7004.82 23047.41 0.3039
2004-05 4891.38 25984.36 0.1882
2005-06 4915.12 29302.67 0.1677
2006-07 7499.47 34857.29 0.2151
2007-08 6962.58 41086.25 0.1695
reference to Indian Oil Corporation Limited
2003-04 31984.2 23047.41 1.38
2004-05 11065.67 25984.36 1.32
2005-06 43760.27 29302.67 1.49
2006-07 45610.35 34857.29 1.31
2007-08 46914.84 41086.25 1.14
2007 - 08 with special reference to Indian Oil Corporation Limited.

2003-04 397.79 197.32 2.02
2004-05 435.87 222.47 1.96
2005-06 437.35 250.88 1.74
2006-07 461.29 298.22 1.55
2007-08 492.91 344.58 1.43

2003–04 21.00 397.79 0.052
2004-05 14.50 435.87 0.033
2005-06 12.50 437.35 0.029
2006-07 19.27 461.29 0.041
2007-08 6.14 492.91 0.012
2007 – 08 with special reference to Indian Oil Corporation Limited.
Indian Oil Corporation Limited.

2003-04 8878.61 116.80 76.02
2004-05 6964.18 116.80 59.62
2005-06 7116.58 116.80 61.24
2006-07 10089.78 116.80 86.39
2007-08 9672.28 119.23 81.12
with special reference to Indian Oil Corporation Limited.

Equity(%)
2003-04 7004.82 23047.41 30.39
2004-05 4891.38 25984.36 18.82
2005-06 4915.12 29302.67 16.77
2006-07 7499.47 34857.29 21.51
2007-08 6962.58 41086.25 16.95
to Indian Oil Corporation Limited.

during the period + Price investment in the
change over during the beginning Return(%)
period
2003-04 264.7 197.32 1.3415
2004-05 59.55 222.47 0.2676
2005-06 147.65 250.88 0.5885
2006-07 86.68 298.22 0.6259
2007-08 46.51 344.58 0.1349

Ratio(Times)
2003-04 10122.08 470.86 21.49
2004-05 6559.35 604.17 10.86
2005-06 7700.94 995.44 7.74
2006-07 11945.18 1496.25 7.98
2007-08 11656.85 1589.73 7.33
year 2007 – 08 with special reference to Indian Oil Corporation Limited.
2003 – 04 59.97
2004 – 05 41.88
2005 – 06 42.08
2006 – 07 64.21
2007 – 08 58.39
year 2004 – 05 with special reference to Indian Oil Corporation Limited.
to Indian Oil Corporation Limited.
Year Beta Status

2003 – 04 0.23788
2004 – 05 0.2928
2005 – 06 0.37613
2006 – 07 0.49303
2007 – 08 -0.76505
TREND ANALYSIS FOR PRICE EARNING RATIO FOR A PERIOD OF FIVE
YEARS 2003-08 WITH SPECIAL REFERENCE TO RELIANCE INDUSTRIES
LIMITED.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Price Earning Ratio 11.95 9.33 11.05 15.93 16.75
X X - X = dx dx2 Y Y – Y = dy dxdy
1 -2 4 11.95 -1.01 2.02
2 -1 1 9.33 -3.63 3.63
3 0 0 11.05 -1.91 0
4 1 1 15.73 2.77 2.77
5 2 4 16.75 3.79 7.58
10 16
Y = a + bx
a = 12.96 b = 1.6
y = 12.96 + 1.6 (6) y = 12.96 + 1.6 (7) y = 12.96 + 1.6 (8)
y = 12.96 + 9.6 y = 12.96 + 11.2 y = 12.96 + 12.8
y = 22.56 y = 24.16 y = 25.76
Inference : The Projected Price Earning Ratio is 22.56 for the year 2008 - 09.
The Projected Price Earning Ratio is 24.16 for the year 2009 - 10.
TREND ANALYSIS FOR DIVIDEND YIELD FOR A PERIOD OF FIVE YEARS
2003-08 WITH SPECIAL REFERENCE TO RELIANCE INDUSTRIES LIMITED.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Dividend Yield 1.18 1.47 1.59 0.75 0.50
10 -1.08
1 -2 4 1.18 0.09 -0.18
2 -1 1 1.47 0.38 -0.38
3 0 0 1.59 0.5 0
4 1 1 0.75 -0.34 -0.34
5 2 4 0.50 -0.59 -1.18
Y = a + bx
a = 1.09 b = -0.108
y = 1.09 + -0.108 (6) y = 1.09 + -0.108 (7) y = 1.09 + -0.108 (8)
y = 1.09 + -0.648 y = 1.09 + -0.314 y = 1.09 + -0.864
y = 0.44 y = 0.78 y = 0.23
Inference : The Projected Dividend Yield is 0.44 for the year 2008 - 09.
The Projected Dividend Yield is 0.78 for the year 2009 - 10.
T-TEST FOR PRICE EARNING RATIO FOR A PERIOD OF FIVE YEARS 2003 – 08
WITH SPECIAL REFERENCE TO RELIANCE INDUSTRIES LIMITED.
H0: The Price Earning Ratio is independent to that of time period.
H1: The Price Earning Ratio is dependent on the time period.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
= 13 (X− )2 = 41.02 σ =3.20
T = X−µ = 13 − 11.05 = 1.95 = 1.349

σ / √n 3.20 / 2.236 1.43
At 5% significant level the degrees of freedom is given by (n−1) (5−1) = 4
Tabulated Value (4, 5%) = 2.776
Calculated Value = 1.349
Inference : As the Calculated value is less than the table value H0 is accepted and hence it is
concluded that the time period has no influence in the Price Earning Ratio.
T-TEST FOR CASH EPS FOR A PERIOD OF FIVE YEARS 2003-08 WITH
SPECIAL REFERENCE TO RELIANCE INDUSTRIES LIMITED.
H0: The Cash EPS is independent to that of time period.
H1: The Cash EPS is dependent on the time period.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Cash EPS 60.83 81.52 89.51 120.31 167.23
= 103.88 (X−X)2 = 6842.8 σ = 41. 36
T = X−µ = 103.88 – 89.51 = 14.37 = 0.777
σ / √n 41.36/√5 41.36/2.236
concluded that the time period has no influence in the Cash EPS.
T-TEST FOR DIVIDEND YIELD FOR A PERIOD OF FIVE YEARS 2003-08 WITH
SPECIAL REFERENCE TO RELIANCE INDUSTRIES LIMITED.
H0: The Dividend Yield is independent to that of time period.
H1: The Dividend Yield is dependent on the time period.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Dividend Yield 1.18 1.47 1.59 0.75 0.50
= 1.05 (X−X)2 0.7009 σ = 0. 4185
T = X−µ = 1.05 – 1.39 = -0.34 = -1.888

σ / √n 0.4185 /√5 0.4185/2.236
Calculated Value = -1.888
concluded that the time period has no influence in the Dividend Yield.
ONE WAY ANNOVA
H0: There lies no significant variation between the Price Earning Ratio and Cash EPS with
H1: There lies a significant variation between the Price Earning Ratio and Cash EPS with
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Cash EPS 60.83 81.52 89.51 120.31 167.23
Step 1: Mean of each sample means

X1 = 36.38 X2 = 45.41 X3= 50.26 X4 = 68.09 X5 = 91.18
Step 2: Computation of X
X = 58.42
Step 3: Mean difference between the samples
n1 (X1 − X)2 + n2 (X2 − X)2 + n3 (X3 − X)2 + n4 (X4 − X)2 + n5 (X5 −X)2 = 5080.76
Step 4 : Mean difference within the samples
=∑(X1 – X1)2 +∑ (X2 – X2)2 +∑(X3 – X3)2 +∑(X4 – X4)2 +∑(X5 – X5)2 = 23634.24
SOURCE OF SS DEGREES OF MS F.RATIO 5%

VARIATION FREEDOM
BETWEEN THE 5080.76 (5-1) = 4 1270.19 0.268 (4, 5%)

SAMPLES
WITHIN IN THE 23634.24 (10-5) = 5 4726.8 5.19

SAMPLES
= 1270.19 / 4726.8 = 0.268 Tabulated Value = 5.19

Inference : As the calculated value is less than tabulated H0 is accepted and hence it is
concluded that the time period has no significant influence on the parameters Price Earning
Ratio and Cash EPS.
RETURNS OF THE RELIANCE INDUSTRIES LIMITED FOR THE PERIOD OF

FIVE YEARS 2003 – 2008
Table 4.1.13 : Table showing the Quarterly Average Return for the period of five years with
a special reference to Reliance Industries Limited.
Quarters Returns for Returns for Returns for Returns for Returns for
03-04 04-05 05-06 06-07 07-08
1st -0.0475 0.0240 -0.0899 0.0263 -0.0755
2nd -0.2198 0.1812 0.3296 0.0776 -0.0184
3rd 0.1105 0.2205 0.1137 0.1069 -0.0221
4th 0.1191 0.1312 0.0819 0.0822 -0.1277
Inference : From the above table it is inferred that the Quarterly Average Return records the
maximum during the 4th Quarter & it records the minimum during the 2nd quarter for the
Financial year 2003 – 04 with special reference to Reliance Industries Limited.
maximum during the 3rd Quarter & it records the minimum during the 1st quarter for the
maximum during the 2nd Quarter & it records the minimum during the 1st quarter for the
Inference : From the above table it is inferred that the Quarterly Average Return records a
negative trend on all the Quarter for the financial year 2007 – 08 with special reference to
Reliance Industries Limited.
YEARS 2004-08 WITH SPECIAL REFERENCE TO OIL & NATURAL GAS
CORPORATION LIMITED.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
1 -2 4 10.02 -0.92 1.84
2 -1 1 8.47 -2.47 2.47
3 0 0 10.34 -0.6 0
4 1 1 12.92 1.98 1.98
5 2 4 12.93 1.99 3.98
10 10.27
Y = a + bx
a = 10.94 b = 1.03
y = 10.94 + 1.03 (6) y = 10.94 + 1.03 (7) y = 10.94 + 1.03 (8)
y = 10.94 + 6.18 y = 10.94 + 7.21 y = 10.94 + 8.24
y = 17.12 y = 18.15 y = 19.18
The Projected Price Earning Ratio is 18.15for the year 2009 - 10.
TREND ANALYSIS FOR DIVIDEND YIELD FOR A PERIOD OF FIVE

YEARS 2004-08 WITH SPECIAL REFERENCE TO OIL & NATURAL GAS
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Dividend Yield 0.039 0.051 0.042 0.032 0.031
1 -2 4 0.039 0 0
2 -1 1 0.051 0.012 -0.012
3 0 0 0.042 0.003 0
4 1 1 0.032 0.007 0.007
5 2 4 0.031 0.008 0.016
10 0.011
Y = a + bx
a = 0.039 b = 0.0011
y = 0.039 + 0.011 (6) y = 0.039 + 0.011 (7) y = 0.039 + 0.011 (8)
y = 0.039 + 0.066 y = 0.039 + 0.077 y = 0.039 + 0.088
y = 0.105 y = 0.116 y = 0.127
T-TEST FOR PRICE EARNING RATIO FOR A PERIOD OF FIVE YEARS
2003 – 08 WITH SPECIAL REFERENCE TO OIL & NATURAL GAS

H1: The Price Earning Ratio is dependent on the time period.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
X = 10.94 (X−X)2 = 15.187 σ = 1.948
T = X−µ = 10.94 − 10.34 = 0.59 = 0.678

σ / √n 1.948 / 2.236 0.87
concluded that the time period has no influence on the Price Earning Ratio.
SPECIAL REFERENCE TO OIL & NATURAL GAS CORPORATION
LIMITED.

Year 2003-04 2004-05 2005-06 2006-07 2007-08
Cash EPS 73.16 103.84 128.22 88.53 96.39
= 98.03 (X−X)2 1656.04 σ = 414.01
T = X−µ = 98.03 – 128.22 = -30.19 = -0.1631

σ / √n 414.01 /√5 414.01 / 2.236
concluded that the time period has no influence on the Cash EPS.
T-TEST FOR DIVIDEND YIELD FOR A PERIOD OF FIVE YEARS 2003-08
WITH SPECIAL REFERENCE TO OIL & NATURAL GAS CORPORATION
LIMITED.
H1: The Dividend Yield is dependent to that of time period.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Dividend Yield 0.039 0.051 0.042 0.032 0.031
= 0.039 (X−X)2 0.000262 σ = 0.0081
T = X−µ = 0.038 – 0.042 = -0.004 = -1.105

σ / √n 0.0081 /√5 0.0081 / 2.236
concluded that the time period has no influence on the Dividend Yield.
ONE WAY ANNOVA
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Cash EPS 73.16 103.84 128.22 88.53 96.39
Step 1: Mean of each sample means

X1 = 46.6 X2 = 93.16 X3 = 69.28 X4 = 50.73 X5 = 54.66
X = 62.87
=∑(X1 – X1)2 + ∑ (X2 – X2)2 +∑(X3 – X3)3+∑(X4 – X4)2 + ∑(X5 – X5)2 = 22619.02

VARIATION FREEDOM
BETWEEN THE 2876.11 (5-1) = 4 719.03 0.1589 (4, 5%)

SAMPLES
WITHIN IN THE 22619.02 (10-5) = 5 4523.80 5.19

SAMPLES
2876.11 / 22619.02 = 0.1589 Tabulated value = 5.19

Calculated value = 0.1589
Inference : As the calculated value is less than table value H0 is accepted and hence it is
Ratio and Cash EPS.
RETURNS OF THE OIL & NATURAL GAS CORPORATION LIMITED FOR THE
PERIOD OF FIVE YEARS 2003 – 2008
Table 4.2.13 : Table showing the Quarterly Average Return for the period of five years with
a special reference to Oil & natural gas corporation Limited.
03-04 04-05 05-06 06-07 07-08
1st 0.0676 0.0782 0.1261 0.0095 -0.0694
2nd -0.2510 0.1673 -0.1565 0.0095 -0.0556
3rd 0.1853 0.0402 0.0574 0.0215 0.0867
4th 0.0920 0.1244 -0.2352 0.0990 -0.1182
maximum during the 3rd Quarter & it records the minimum during the 2nd quarter for the
maximum during the 2nd Quarter & it records the minimum during the 3rd quarter for the
maximum during the 1st Quarter & it records the minimum during the 4th quarter for the
maximum during the 4th Quarter & it records the minimum during the 1st quarter for the
maximum during the 3rd Quarter & it records the minimum during the 4th quarter for the

YEARS 2003-08 WITH SPECIAL REFERENCE TO INFOSYS TECHNOLOGIES
LIMITED.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
1 -2 4 23.03 -6.71 13.42
2 -1 1 39.59 9.85 -9.85
3 0 0 28.95 -0.79 0
4 1 1 34.39 4.65 4.65
5 2 4 22.74 -7 -14
10 -5.78
Y = a + bx
a = 29.74 b = -0.578
y = 29.74 + (-0.578) (6) y = 29.74 + (-0.578) (7) y = 29.74 +(-0. 578)(8)
y = 29.74 + (-3.468) y = 29.74 + (-4.046) y = 29.74 + (-4.624)
y = 26.27 y = 25.69 y = 25.12


2003-08 WITH SPECIAL REFERENCE TO INFOSYS TECHNOLOGIES LIMITED.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Dividend Yield 0.60 0.82 3.52 1 3.74
1 -2 4 0.60 -1.34 2.68
2 -1 1 0.82 -1.12 1.12
3 0 0 3.52 1.58 0
4 1 1 1 -0.94 -0.94
5 2 4 3.74 1.8 3.6
10 7.4
Y = a + bx
a = 1.94 b = 0.74
y = 1.94 + 0.74 (6) y = 1.94 + 0.74 (7) y = 1.94 + 0.74 (8)
y = 1.94 + 4.44 y = 1.94 + 5.18 y = 1.94 + 5.92
y = 6.38 y = 7.12 y = 7.86
T-TEST FOR PRICE EARNING RATIO FOR A PERIOD OF FIVE YEARS 2003 – 08
WITH SPECIAL REFERENCE TO INFOSYS TECHNOLOGIES LIMITED.
H1: The Price Earning Ratio is dependent to that of time period.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
= 29.74 (X−X)2 = 213.28 σ = 7.302
T = X−µ = 29.74 − 28.95 = 0.79 = 0.242
σ / √n 7.302/2.236 3.27
concluded that the time period has no influence in the Price Earning Ratio.
SPECIAL REFERENCE TO INFOSYS TECHNOLOGIES LIMITED.
H1: The Cash EPS is dependent to that of time period.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Cash EPS 221.24 80.30 102.69 74.44 87.69
= 113.27 (X−X)2 15018.59 σ = 3754.65
T = X−µ = 113.27 – 102.69 = 10.58 = 0.0063
σ / √n 3754.65/√5 1679.18

concluded that the time period has no influence in the Cash EPS.
T-TEST FOR DIVIDEND YIELD FOR A PERIOD OF FIVE YEARS 2003-08 WITH
SPECIAL REFERENCE TO INFOSYS TECHNOLOGIES LIMITED.
H1: The Dividend Yield is dependent to that of time period.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Dividend Yield 0.60 0.82 3.52 1 3.74
= 1.94 (X−X)2 9.65 σ = 2.43
T = X−µ = 1.94 – 3.52 = -1.58 = -1.463
σ / √n 2.43 /√5 1.08
concluded that the time period has no influence in the Dividend Yield.
RETURNS OF THE INFOSYS TECHNOLOGIES LIMITED FOR THE PERIOD OF
FIVE YEARS 2003 – 2008
Table 4.3.13 : Table showing the Quarterly Average Return for a period of five years with a
special reference to Infosys technologies Limited.
03-04 04-05 05-06 06-07 07-08
1st -0.1166 0.0795 -0.0028 0.1398 -0.0634
2nd 0.1149 0.0765 0.0396 0.2752 0.0739
3rd -0.6285 0.0683 -0.3472 0.0355 -0.0615
4th 0.2249 0.1835 0.2016 -0.3347 -0.0714
maximum during the 4th Quarter & it records the minimum during the 3rd quarter for the
financial year 2003 – 04 with special reference to Infosys technologies Limited.
maximum during the 2nd Quarter & it records the minimum during the 4th quarter for the
maximum during the 2nd Quarter & it records the minimum during the 4th quarter for the

YEARS 2003-08 WITH SPECIAL REFERENCE TO BHARAT HEAVY
ELECTRICALS LIMITED.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
1 -2 4 15.22 -6.71 13.42
2 -1 1 16.22 -5.71 5.71
3 0 0 19.14 -2.79 0
4 1 1 22.89 0.96 0.96
5 2 4 36.19 14.26 28.52
10 48.61
Y = a + bx
a = 21.93 b = 4.86
y = 21.93 + 4.86 (6) y = 21.93 + 4.86 (7) y = 21.93 + 4.86 (8)
y = 21.93 + 29.16 y = 21.93 + 34.02 y = 21.93 + 38.88
y = 51.09 y = 55.95 y = 60.81
The Projected Price Earning Ratio is 55.95for the year 2009 - 10.

2003-08 WITH SPECIAL REFERENCE TO BHARAT HEAVY ELECTRICALS
LIMITED.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Dividend Yield 1.46 1.26 1.10 1.08 0.72
1 -2 4 1.46 0.34 -0.68
2 -1 1 1.26 0.14 -0.14
3 0 0 1.10 -0.02 0
4 1 1 1.08 -0.04 -0.04
5 2 4 0.72 -0.4 -0.8
10 -1.66
Y = a + bx
a = 1.12 b = -0.166
y = 1.12 + (-0.166) (6) y = 1.12 + (-0.166) (7) y = 1.12 + (-0.166) (8)
y = 1.12 + (-0.996) y = 1.12 + (-1.162) y = 1.12 + (-1.328)
y = 0.124 y = -0.042 y = -0.208
Inference : The Projected Dividend Yield Ratio is 0.124 for the year 2008 - 09.
The Projected Dividend Yield Ratio is -0.042 for the year 2009 - 10.
The Projected Dividend Yield Ratio is -0.208 for the year 2010 - 11.
T-TEST FOR DIVIDEND YIELD RATIO FOR A PERIOD OF FIVE YEARS 2003 –
08 WITH SPECIAL REFERENCE TO BHARAT HEAVY ELECTRICALS
LIMITED.
H0: The Dividend Yield Ratio is independent to that of time period.
H1: The Dividend Yield Ratio is dependent on the time period.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Dividend Yield 1.46 1.26 1.10 1.08 0.72
= 1.12 (X−X)2 0.2972 σ =0.273
T = X−µ = 1.12 – 1.10 = 0.02 = 0.164
σ / √n 0.273 / 2.236 0.122
concluded that the time period has no influence on the Dividend Yield Ratio.
SPECIAL REFERENCE TO BHARAT HEAVY ELECTRICALS LIMITED.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Cash EPS 34.97 47.89 78.65 108.65 63.69
= 66.77 (X−X)2 3272.23 σ = 28.60
T = X−µ = 66.77 – 78.65 = -11.88 = -0.928
σ / √n 28.60 / √5 414.01 / 2.236
T-TEST FOR PRICE EARNING RATIO FOR A PERIOD OF FIVE YEARS 2003-08
WITH SPECIAL REFERENCE TO BHARAT HEAVY ELECTRICALS LIMITED.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
= 21.93 (X−X)2 289.66 σ = 8.509
T = X−µ = 21.93 – 19.14 = 2.79 = 0.444
σ / √n 8.509 / √5 8.509 / 2.236
RETURNS OF THE BHARAT HEAVY ELECTRICALS LIMITED FOR THE
PERIOD OF FIVE YEARS 2003 - 3008
Table 4.4.13: Table showing the Quarterly Average Return for the period of five years with a
03-04 04-05 05-06 06-07 07-08
1st 0.18832 0.01481 0.52402 -0.0005 -0.06436
2nd -0.13325 0.13107 -0.11681 -0.07943 -0.12449
3rd 0.13801 0.36705 0.21558 0.09838 0.05547
4th 0.31748 0.15797 -0.0381 0.09141 -0.04449
maximum during the 4th Quarter & it records the minimum during the 2nd quarter for the
maximum during the 1st Quarter & it records the minimum during the 2nd quarter for the

YEARS 2003-08 WITH SPECIAL REFERENCE TO INDIAN OIL CORPORATION
LIMITED.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
1 -2 4 6.63 -1.98 3.96
2 -1 1 10.41 1.8 -1.8
3 0 0 10.39 1.78 0
4 1 1 7.18 -1.43 -1.43
5 2 4 8.44 -0.17 -0.34
10 0.39
Y = a + bx
a = 8.61 b = 0.039
y = 8.61 + 0.039 (6) y = 8.61 + 0.039 (7) y = 8.61 + 0.039 (8)
y = 8.61 + 0.234 y = 8.61 + 0.273 y = 8.61 + 0.312
y = 8.84 y = 8.88 y = 8.92

2003-08 WITH SPECIAL REFERENCE TO INDIAN OIL CORPORATION
LIMITED.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Dividend Yield 0.052 0.033 0.029 0.041 0.012
1 -2 4 0.052 0.019 0.038
2 -1 1 0.033 0 0
3 0 0 0.029 -0.004 0
4 1 1 0.041 0.008 0.008
5 2 4 0.012 -0.021 -0.042
10 0.076
Y = a + bx
a = 0.1244 b = 0.0076
y = 0.1244 + (0.0076) (6) y = 0.1244 + (0.0076) (7) y = 0.1244 + (0.0076) (8)
y = 0.1244 + (0.0456) y = 0.1244 + (0.0532) y = 0.1244 + (0.0608)
y = 0.0056 y = 0.1776 y = 0.1852
Inference : The Projected Dividend Yield Ratio is 0.0056 for the year 2008 - 09.
The Projected Dividend Yield Ratio is 0.1776 for the year 2009 - 10.
The Projected Dividend Yield Ratio is 0.1852 for the year 2010 - 11.
T-TEST FOR DIVIDEND YIELD RATIO FOR A PERIOD OF FIVE YEARS 2003 –
08 WITH SPECIAL REFERENCE TO INDIAN OIL CORPORATION LIMITED.
H0: The Dividend Yield Ratio is independent to that of time period.
H1: The Dividend Yield Ratio is dependent on the time period.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Dividend Yield 0.052 0.033 0.029 0.041 0.012
= 0.033 (X−X)2 = 0.00088 σ = 0.01483
T = X−µ = 0.033 – 0.029 = 0.004 = 0.6060
σ / √n 0.01483 / 2.236 0.0066
concluded that the time period has no influence on the Dividend Yield Ratio.
SPECIAL REFERENCE TO INDIAN OIL CORPORATION LIMITED.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Cash EPS 76.02 59.62 61.24 86.39 81.12
= 72.88 (X−X)2 = 571.58 σ = 11.95
T = X−µ = 72.88 – 61.24 = 11.64 = 2.179
σ / √n 11.95 / √5 11.95 / 2.236
T-TEST FOR PRICE EARNING RATIO FOR A PERIOD OF FIVE YEARS 2003-08
WITH SPECIAL REFERENCE TO INDIAN OIL CORPORATION LIMITED.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
= 8.61 (X−X)2 = 12.41 σ =1.761
T = X−µ = 8.61 – 10.39 = -1.78 = -2.282
σ / √n 1.761 / √5 1.761 / 2.236
ONE WAY ANNOVA
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Cash EPS 76.02 59.62 61.24 86.39 81.12
Step 1: Mean of each sample means.

X1= 41.33 X2= 35.02 X3 = 35.82 X4= 46.79 X5= 44.78
X = 40.78
=∑ ( X1- 1)2 + ∑ ( X2- 2)2 + ∑ ( X3- 3)2 + ∑ ( X4- 4)2 + ∑ ( X5- 5)2 = 10689.44

VARIATION FREEDOM
BETWEEN THE 220.44 (5-1) = 4 55.11 0.0258 (4, 5%)

SAMPLES
WITHIN IN THE 10689.44 (10-5) = 5 2137.88 5.19

SAMPLES
= 55.11 / 2137.88 = 0.0258

Tabulated value = 5.19
Calculated value = 0.0258
Inference : As the calculated value is less than table value H0 is accepted and hence it is
Ratio and Cash EPS.
RETURNS OF THE INDIAN OIL CORPORATION LIMITED FOR THE PERIOD

OF FIVE YEARS 2003 – 2008
Table 4.5.13 : Table showing the Quarterly Average Return for the period of Five years with
a special reference to Indian Oil Corporation Limited.
03-04 04-05 05-06 06-07 07-08
1st 0.08787 -0.14197 0.05668 -0.0005 -0.06436
2nd -0.21005 -0.02843 -0.35015 -0.07943 -0.12449
3rd 0.17849 0.07080 0.30084 0.09838 0.05547
4th 0.17276 0.22931 -0.13823 0.09141 -0.04449
maximum during the 4th Quarter & it records the minimum during the 1st quarter for the
FACTOR ANALYSIS
FOR THE FINANCIAL YEAR 2003 – 04
Rotated Component Matrix(a)
Component
1 2
PRICE EARNING RATIO .952 -.306

RETURN ON CAPITAL EMPLOYED .373 .927
RETURN ON NET WORTH -.128 -.861

DEBT TO EQUITY -.221 .914
PRICE TO BOOK VALUE RATIO .997 .032
DIVIDEND YIELD -.674 .728

CASH EPS .991 .114
RETURN ON EQUITY .619 .653
TOTAL RETURN .770 .236
INTEREST COVERAGE RATIO .996 .031
EARNINGS PER SHARE .985 .172
Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.
a Rotation converged in 3 iterations.
Inference : From the above factor analysis it is inferred that the following factors namely
Price to Book Value Ratio, Interest Coverage Ratio, Return on Capital Employed and Debt to
Equity ratios are the dominant variables in determining the market price mechanism of the
Equity Shares.
Component
1 2 3
PRICE EARNING RATIO .997 .076 .015
RETURN ON CAPITAL EMPLOYED .284 .954 .098
RETURN ON NET WORTH -.113 .074 -.991
DEBT TO EQUITY -.737 -.578 .351
PRICE TO BOOK VALUE RATIO .986 .163 .017
DIVIDEND YIELD -.705 .341 .621
CASH EPS -.032 .986 -.165
RETURN ON EQUITY .797 .579 .171
TOTAL RETURN .992 .127 .015
INTEREST COVERAGE RATIO .991 .133 .002
EARNINGS PER SHARE .148 .986 .083

Inference : From the above analysis it is inferred that the following factors namely Price
Earning Ratio, Total Return, Interest Coverage Ratio, Return on Capital Employed, Cash
EPS, Earnings Per Share, Debt to Equity, Dividend Yield, and Return on Equity are the
dominant factors that determine the market price mechanism of the Equity shares.
Component
1 2 3
DEBT TO EQUITY -.664 -.567 .488
DIVIDEND YIELD .173 .529 .831
CASH EPS .166 .984 -.064
TOTAL RETURN .939 .337 .067
EARNINGS PER SHARE .307 .952 -.019

Inference : From the above analysis it is inferred that the variable Return on Capital
Employed is a dominant factor while Price Earning Ratio, Price to Book Value Ratio, Interest
Coverage Ratio, Cash EPS, Earnings Per Share, Debt to Equity and Dividend Yield are the
supportive factors that drives the market price mechanism of the Equity shares.
Component
1 2
PRICE EARNING RATIO .998 .050
RETURN ON CAPITAL EMPLOYED -.126 -.740
RETURN ON NET WORTH .082 .997
DEBT TO EQUITY -.930 -.351
PRICE TO BOOK VALUE RATIO .993 -.119
DIVIDEND YIELD -.746 -.662
CASH EPS -.332 .939
RETURN ON EQUITY .862 -.493
TOTAL RETURN .971 .241
INTEREST COVERAGE RATIO .959 -.226
EARNINGS PER SHARE .002 .926

Inference : From the above factor analysis it is inferred that the variables namely
Price Earning Ratio, Price to Book Value Ratio, Return On Net worth, and Cash EPS are the
dominant variables in driving the market price mechanism of the Equity Shares.
FOR THE FINANCIAL YEAR 2007-08
Component
1 2 3
RETURN ON CAPITAL EMPLOYED .202 -.053 .978
RETURN ON NET WORTH .069 .983 -.171
DEBT TO EQUITY -.763 -.474 -.440
DIVIDEND YIELD .593 -.431 .680
CASH EPS -.005 .999 -.043
TOTAL RETURN .992 -.096 .085
INTEREST COVERAGE RATIO .975 -.220 .039
EARNINGS PER SHARE .163 .985 .050

Inference : From the above analysis it is inferred that the following factors namely
Price to Book Value Ratio, Total Return, Interest Coverage Ratio, Return on Net worth,
Cash EPS, Earnings Per Share, Return on Capital Employed, Dividend Yield & Return On
Equity are the crucial variables in driving the market price mechanism of the Equity Shares.
FOR FIVE YEARS 2003 – 2008
Component
1 2 3
PRICE EARNING RATIO .962 .131 -.169
DEBT TO EQUITY -.646 -.251 .433
PRICE TO BOOK VALUE RATIO .965 .218 -.029
DIVIDEND YIELD -.289 -.060 .867
CASH EPS .054 .950 -.231
TOTAL RETURN .858 -.069 -.012
EARNINGS PER SHARE .171 .958 -.126

Inference : From the above analysis it is inferred that the variables namely
Price Earning Ratio, Price to Book Value Ratio, Total Return, Cash EPS, Earnings Per Share,
Return on Capital Employed, Debt Equity, and Dividend Yield are the dominant variables
that drive the market price mechanism of the Equity Shares.
FINDINGS
COMPANY 1: RELIANCE INDUSTRIES LIMITED
The Price Earnings Ratio records the highest during the financial year 2007 – 08.
The Return on capital employed records the highest during the financial year 2004 – 05.
The Return on Net worth records the maximum during the financial year 2007 – 08.
The Debt to Equity records the maximum during the financial year 2004 – 05.
The Price to Book value ratio records the highest during the financial year 2007 – 08.
The Dividend Yield records the maximum during the financial year 2004 – 05.
The Cash EPS records the maximum during the financial year 2007 – 08.
The Return on Equity records the maximum during the financial year 2007 – 08.
The Total Return records the highest during the financial year 2006 – 07.
The Interest Coverage Ratio records the highest during the financial year 2007 – 08.
The EPS records the maximum during the financial year 2007 – 08.
COMPANY 2 : INFOSYS TECHNOLOGIES LIMITED
COMPANY 3 : BHARAT HEAVY ELECTRICALS LIMITED
COMPANY 4 : OIL & NATURAL GAS CORPORATION LIMITED
COMPANY 5 : INDIAN OIL CORPORATION LIMITED
Major Findings from the Over all Factor Analysis results for the years 2003-2008 :
The companies include Reliance Industries, Oil and natural gas corporation, Infosys
Technologies, Bharat Heavy Electricals Limited and Indian Oil Corporation :
The study reveals that the variables namely P/E ratio, P/B ratio, Total Return, Cash EPS ,
EPS, Return on Capital employed , Debt –equity and Dividend yield are the dominant factors
in determining the market price mechanism of the equity shares for the years 2003-2008.
SUGGESTIONS
 The Investor should study & assess the book value (Investment Per Share) before
deciding on the Investment proposal.
 The Investor should assess the EPS of the Company before making an investment
proposal as it reflects significantly towards safeguarding the wealth maximisation of
the shareholders.
 The Investor should assess the relationship of the PE ratio with the Market Price
before making an investment proposal and should ensure that the end result of this
analysis should be positive and thereby he will be in a position to ascertain, when he
can recover his investment.
 The Investor should assess the Return on Net worth status before making an
investment proposal as it reflects the productivity of the equity capital invested
before.
 The Investor should be in a position to ascertain the risk factor associated with his
investment proposal and he should be in a position to ascertain the sensitivity in term
of Index / Market return.
CONCLUSION
The researcher carried out the study with the objective of finding out the crucial factors that
determining the market price mechanism of the selected five stocks from NSE. The study
reveals that the factors namely Return on Capital Employed that drives the market price
mechanism of the selected stock. The study further reveals that Earnings Per Share, Cash
EPS, Price Earning Ratio, and Dividend Yield too plays a dominant role in determining the
market price mechanism of the selected stocks. Thus investors are advised to have a glimpse
on the variable namely Price Earning Ratio, Earnings Per Share, Dividend Yield, Cash EPS
before making an investment decision. Earning Power Factor represents the earning power of
the companies and therefore, termed as earning power factor. The factor consists of earning
per share, cash earning per share and book value per share. Return On Investment is termed
as Return on Investment factor. The factor consists of Price to Book Value, Return on Capital
Employed, and Return on Net Worth. Volatility Factor which consists of Beta, Average
Return and Market Capitalisation. Growth Factor which consists of Dividend Yield and
Price-Earning Ratio. Hence the prospective investors are guided towards determining on an
optimum investment portfolio by assessing the liquidity, return and market price before
making an investment decision. Thus ensuring that wealth maximisation of shareholders has
been accomplished.
BIBLIOGRAPHY
REFERENCES:
1) Dr. Ramachandran R & Dr. Srinivasan R, “Management Accounting”, Trichy

Shriram Publications Pvt Ltd, 2007.
2) Punithavathy Pandiyan, “Security Analysis and Portfolio Management”, Vikas
Publishing House Pvt Ltd.
3) Kothari C.R., “Research Methodology”, New Delhi, New Age International (P)
Ltd, 2006.
WEBSITES:
www.moneycontrol.com
www.nseindia.com
www.google.com
JOURNALS:
ICFAI Journals of Applied Finance

Year 2007, Vol:13, Issue:1, Page :5-22, The ICFAI University Press.

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A STUDY ON THE FACTORS AFFECTING THE MARKET PRICE AD RETURNS

OF SHARES OF SELECTED COMPANIES FROM NIFTY

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE

MASTER OF BUSINESS ADMINISTRATION

IN ANNA UNIVERSITY- TRICHY

(REG NO. 81907501015)

Department Of Management Studies

Saranathan College of Engineering

(Affiliated To Anna University- TRICHY)

Head of the Department Guide

Internal Examiner External Examiner

I hereby declare that the project titled “A STUDY ON THE FACTORS

I express my deep sense of gratitude to our beloved Principal Dr. S.Malayappan,

I express my deep sense of gratitude to Dr.Y.Venkatramani Director Academics of

I take this opportunity to acknowledge my sincere thanks to Mr. P.Kothandaraman,

I express my sincere thanks and gratitude to Mr. B.S.Chandra Mouli, Professor,

The researcher used the following financial tools namely

(d) Beta (e) Return on equity (f) Debt-Equity

(j) EPS (k) Return on Capital Employed(l) Total Return

The researcher used the following statistical tools namely

(1) T-test (2) One Way Annova

(3) Trend (4) Factor Analysis.

There are several fundamental, non-fundamental, and technical factors, which

1.1.1 PRICE-EARNING RATIO:

P/E = Market Price Per share / Earnings Per share

1.1.2 RETURN ON CAPITAL EMPLOYED:

ROCE = Profit before interest and Tax / Total Capital Employed

1.1.3 RETURN ON NETWORTH:

1.1.4 DEBT TO EQUITY RATIO (D/E)

1.1.5 PRICE TO BOOK VALUE RATIO:

P/B = Market Price per share / Book Value per share

1.1.6 DIVIDEND YIELD:

1.1.7 TOTAL RETURN

Required Return = Risk-free Return + Beta (Market Risk Premium)

1.1.9 CASH EPS

Cash EPS = (Net Income + Depreciation) / No. Of shares Outstanding.

1.1.10 EARNINGS PER SHARE :

1.1.11 INTEREST COVERAGE RATIO

Interest Coverage Ratio = EBIT / INTEREST

1.1.12 RETURN ON EQUITY

1.2 COMPANY PROFILE

The Reliance Group, founded by Dhirubhai H. Ambani (1932 - 2002), is India’s

1.2.2 Oil and Natural Gas Corporation Limited

1.2.3 Infosys Technologies Limited

Infosys offerings span business and technology consulting, application services,

1.2.4 Bharat Heavy Electricals Limited

BHEL has acquired certifications to Quality Management System (ISO 9001),

1.2.5 Indian Oil Corporation Limited

Indian Oil is currently metamorphosing from a pure sectoral company with

Besides two refining subsidiaries of Chennai Petroleum Corporation Limited are

With a vision to evolve in to a major technology provider through excellence in

(3.1) Statement of the problem:

(3.2) Research design:

(3.3) Objectives of the study:

(I) Primary objective:

(II) Secondary objectives:

(3.4) Data sources:

(3.5) Sampling Technique:

(3.6) Scope of the study:

(3.7) Analysis and Interpretation:

(d) Beta (e) Return on equity (f) Debt-Equity

(j) EPS (k) Return on Capital Employed(l) Total Return

The formulae are as follows: