A REPORT ON EQUITY RESEARCH

BY: CHIRASH 05116603909

AUTHORIZATION
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This is to certify that Mr. Chirash, a student of University School of management Studies , GGSIPU has completed project work on Equity Research under my guidance and supervision. The report is su mitted as partial fulfillment of the re!uirement of "#$ Program of US"S. I certify that this is an original work and has not een copied from any source.

(Signature of Guide) Name of Pro ect !ui"e% &r . Vijita Aggarwal #ate '

AC$NO%&E#!EMENT
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I owe a great many thanks to a great many people who helped and supported me during the making of this project. "y deepest thanks to

&r

Vijita

Aggarwal,

the Guide of the project for guiding and correcting various documents of mine with attention and care. (e has taken pain to go through the project and make necessary correction as and when needed. I would also thank my Institution and my faculty mem ers without whom this project would have een a distant reality. I also e)tend my heartfelt thanks to my family and well wishers.

*hirash

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Table of Content
Table of Contents....................................................................................................... 4 LIST OF TA L!S.......................................................................................................... " LIST OF FI#$%!S......................................................................................................... & !'!C$TIV! S$((A%)................................................................................................. * I+T%O,$CTIO+........................................................................................................... I+T%O,$CTIO+ TO STOC.S/0.................................................................................. I+T%O,$CTIO+ TO STOC. (A%.!T/0......................................................................1 T2! (A%.!T / 32) IT !'ISTS4..............................................................................15 I+T%O,$CTIO+ TO STOC. !'C2A+#!/0................................................................11 %IS.S I+VOLV!, I+ STOC. (A%.!T/0....................................................................12 A+AL)SIS TOOLS/0................................................................................................. 12 !6$IT) %!S!A%C2 / A+ OV!%VI!3.......................................................................14 I+V!ST(!+T %ATIO+AL!....................................................................................... 14 O 7!CTIV! OF T2! P%O7!CT/0................................................................................1" SCOP! OF T2! ST$,)/0......................................................................................... 1" (!T2O,OLO#)/0................................................................................................... 1& LI(ITATIO+S OF T2! ST$,)/0................................................................................ 1& (AI+ T!'T................................................................................................................ 1* F$+,A(!+TAL !VAL$ATIO+/0...............................................................................1!CO+O(IC A+AL)SIS................................................................................................ 1I+T%O,$CTIO+...................................................................................................... 1S!+S!' / A+ I+,ICATO% OF T2! I+,IA+ !CO+O()..............................................25 FII8S I+FLO3 I+ T2! I+,IA+ !CO+O()/0...............................................................22 I(PACT OF $+IO+ $,#!T 2515011 O+ S!+S!'..................................................24 Page | 4

I+,$ST%) A+AL)SIS................................................................................................. 2& P2A%(AC!$TICAL I+,$ST%)................................................................................ 2& CO+ST%$CTIO+ I+,$ST%)/0.................................................................................. 35 T!L!CO( I+,$ST%)/0............................................................................................ 34 CO(PA+) A+AL)SIS................................................................................................. 3%ATIO A+AL)SIS.................................................................................................... 3S+APS2OT OF T2! (A%.!T...................................................................................... 4& I+T!%P%!TATIO+ OF VA%IO$S PA%A(!T!%S I(PO%TA+T I+ A+AL)SI+# A STOC.. .4* A+AL)SIS OF CIPLA/0............................................................................................. "1 A+AL)SIS OF 9arti Airtel /0................................................................................... "2 A+AL)SIS OF ,LF LT, /0........................................................................................ "4 A+AL)SIS OF L:T/0................................................................................................ "& A+AL)SIS OF 7AIP%A.AS2 ASSOCIAT!S/0..............................................................."* FI+,I+#S A+, CO+L$SIO+...................................................................................... "1 %!F!%!+C!S............................................................................................................. &1 A++!'$%!S.............................................................................................................. &2

!IST O" TAB!ES

1. In;ia8s to<* ;r=g >o?< 2. Sna<s9ot of t9e ?ar@et 3. Page | " est to< gainers of senseA

21 441

4.

est to< losers of senseA

"5 "" "& "&5 &1

". AnalBsis of >i<la &. AnalBsis of 9arti airtel

*. AnalBsis of ,Lf lt;. -. AnalBsis of L:T 1. AnalBsis of jai<ra@as9 asso.

!IST O" "I#URES

1. SenseA >9art fro? 255&015 2. FII inCest?ent in In;ian eD=ities 3. Porter8s " for>es ?o;el for in;=strB analBsis 4. (ar@et s9are of <9ar?a >o?<anies 24 2" 231

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". S9are to #,P bB >onstr=>tion in;=strB0 &. (ar@et s9are of tele>o? >o?<anies *. -. 1. ar >9art ;e<i>ting t9e C=rrent ratio ar >9art ;e<i>ting t9e ;ebt eD=itB ratio ar >9art ;e<i>ting t9e in;=strB >oCerage ratio 341 42

3"

43 44 4" 4& "" "* "&5 &2

15. ar >9art ;e<i>ting t9e ! IT,A ?argin 11. ar >9art ;e<i>ting t9e %OC! 12. ar >9art ;e<i>ting t9e total asset t=rnoCer ratio 13.Pri>e >9art of >i<la 14.Pri>e >9art of 9arti airtel

1".Pri>e >9art of ,LF lt;. 1&.Pri>e >9art of L:T 1*.Pri>e >9art of jai<ra@as9 asso.

E$ECUTI%E SU&&ARY
Summer Internship Program is an essential component of the "#$ curriculum. It gives immense opportunity to learn a out the working and culture of the corporate. The project entitled +,!uity -esearch. is dedicated to my SIP /010 which is eing accomplished through the courtesy of Sharekhan 2td.. The main aim of the project is to enhance the analytical skills with

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the help of fundamental analysis and addition of asic and advanced knowledge of finance for etter understanding of the market for its application in research. ,!uity research is done through two analysis namely fundamental and technical analysis. The analysis in this project is done through fundamental analysis which asically includes economic analysis, industry analysis and the company analysis. There are two approaches to this, ottom up and top down. I have adopted the top down approach to perform the study commencing with economic, industry and company analysis. The area of research given to me is sense) which is in a group of /. So, I have een assigned 13 companies listed on sense) there y covering 4 sectors. The economic analysis starts with a rief of world economy statistics and then the Indian economic analysis. $lso, the impact of udget /010511 is covered in the report. The analysis of 6 sectors was done till interim report and a more detailed analysis of the remaining 6 sectors, that is, pharmaceutical industry, construction industry and telecom industry is done now. The company analysis starts with the ratio analysis which forms one of the most important tools of fundamental analysis used to analy7e the financial performance of the companies. -atio analysis is carried out with the companies of telecom sector so that it ecomes easy to understand and e)plain and simultaneously analy7ing the telecom companies as well. $ comparative analysis is also done against prominent private market players. 8arious ratio analysis will help to judge the, li!uidity, solvency, profita ility and overall efficiency of the firm.

Some of the important or key financials of a company are studied and e)plained which are useful for an investor to invest in a firm. The analysis of some companies is shown at the end with these parameters.

INTRO'UCTION
INTRO'UCTION TO STOC(S:)

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Stock is a share in the ownership of a company. 'toc( re)rese*ts a c+aim o* the com)a*y,s assets a*" ear*i*-s. $s you ac!uire more stock, your ownership stake in the company ecomes greater. 9hether you say shares, e!uity, or stock, it all means the same thing. The importance of eing a shareholder is that you are entitled to a portion of the company:s profits and have a claim on assets. Profits are sometimes paid out in the form of dividends. The more shares you own, the larger the portion of the profits you get. ;our claim on assets is only relevant if a company goes ankrupt. In case of li!uidation, you<ll receive what<s left after all the creditors have een paid. The im)orta*ce of stoc( o.*ershi) is your c+aim o* assets a*" ear*i*-s. $nother e)tremely important feature of stock is its limited lia ility, which means that, as an owner of a stock, you are not personally lia le if the company is not a le to pay its de ts. =ther companies such as partnerships are set up so that if the partnership goes ankrupt the creditors can come after the partners >shareholders? personally and sell off their house, car, furniture, etc. O.*i*- stoc( mea*s that/ *o matter .hat/ the ma0imum 1a+ue you ca* +ose is the 1a+ue of your i*1estme*t. ,ven if a company of which you are a shareholder goes ankrupt, you can never lose your personal assets.

INTRO'UCTION TO STOC( &AR(ET:)

The fa ulous category of financial instruments is, without a dou t, one of the greatest tools ever invented for uilding wealth. Stocks are a part, if not the cornerstone, of nearly any investment portfolio. 9hen you start on your road to financial freedom, you need to have a solid understanding of stocks and how they trade on the stock market.

=ver the last few decades, the average person<s interest in the stock market has grown e)ponentially. 9hat was once a toy of the rich has now turned into the vehicle of choice for growing wealth. This demand coupled with advances in trading technology has opened up the

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markets

so

that

nowadays

nearly

any ody

can

own

stocks.

The stock market can e a great source of confusion for many people. The average person generally falls into one of two categories. The first elieve investing is a form of gam ling@ they are certain that if you invest, you will more than likely end up losing your money. =ften these fears are driven y the personal e)periences of family mem ers and friends who suffered similar fates or lived through the Great &epression. These feelings are not ground in facts and are the result of personal e)perience. Someone who elieves along this line of thinking simply does not understand what the stock market is or why it e)ists. The second category consists of those who know they should invest for the long5run, ut don:t know where to egin. "any feel like investing is some sort of lack5magic that only a few people hold the key to. "ore often than not, they leave their financial decisions up to professionals, and cannot tell you why they own a particular stock or mutual fund. Their investment style is lind faith or limited to +this stock is going up. 9e should uy it.. This group is in far more danger than the first. They invest like the masses and then wonder why their results are mediocre >or in some cases, devastating?.

THE &AR(ET : *HY IT E$ISTS+

9hen a company is growing, the iggest hurdle is often raising enough money to e)pand. =wners generally have two options to overcome this. They can either orrow the money from a ank or venture capitalist, or sell part of the usiness to investors and use the money to fund growth. Taking out a loan is common, and very useful ' to a point. #anks will not always lend money to companies, and over5eager managers may try to orrow too much initially, wrecking the alance sheet. Aactors such as these often provoke owners of small usinesses to issue stock. In e)change for giving up a tiny fraction of control, they are given cash to e)pand the usiness. In addition to money that doesn:t have to e paid ack, +going pu lic. Bas its called when a company sells stock in itself for the first timeC, gives the usiness managers and owners a new tool% instead of paying cash for an ac!uisition, they can use their own stock.

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INTRO'UCTION TO STOC( E$CHAN#E:)

$ stoc( e0cha*-e is an entity which provides DtradingD facilities for stock rokers and traders, to trade stocks and other securities. Stock e)changes also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividends. The securities traded on a stock e)change include% shares issued y companies, unit trusts, derivatives, pooled investment products and onds. To e a le to trade a security on a certain stock e)change, it has to e listed there. Usually there is a central location at least for recordkeeping, ut trade is less and less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of speed and cost of transactions. Trade on an e)change is y mem ers only. The initial offering of stocks and onds to investors is y definition done in the primary market and su se!uent trading is done in the secondary market. $ stock e)change is often the most important component of a stock market. There is usually no compulsion to issue stock via the stock e)change itself, nor must stock e su se!uently traded on the e)change. Such trading is said to e off exchange or over5the5counter. This is the usual way that derivatives and onds are traded. Increasingly, stock e)changes are part of a glo al market for securities.

There are two major stock e)changes in the country. =ne is S,ES,F>#S,? and the other is EIAT;>ES,?. #S, stands for #om ay Stock ,)change and ES, stands for Eational Stock ,)change. The 'e*se0 is an Dinde)D. $n inde) is asically an indicator. It gives you a general idea a out whether most of the stocks have gone up or most of the stocks have gone down. The Sense) is an indicator of all the major companies of the #S, and Eifty is an indicator of all the major companies of the ES,. If the Sense) goes up, it means that the prices of the stocks of most of the major companies on the #S, have gone up. If the Sense) goes down, this tells you that the stock price of most of the major stocks on the #S, have gone down.
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Gust like the Sense) represents the top stocks of the #S,, the Eifty represents the top stocks of the ES,.

RIS(S IN%O!%E' IN STOC( &AR(ET:)

It must e emphasi7ed that there are no guarantees when it comes to individual stocks. Some companies pay out dividends, ut many others do not. $nd there is no o ligation to pay out dividends even for those firms that have traditionally given them. 9ithout dividends, an investor can make money on a stock only through its appreciation in the open market. =n the downside, any stock may go ankrupt, in which case your investment is worth nothing. $lthough risk might sound all negative, there is also a right side. Taking on greater risk demands a greater return on your investment. This is the reason why stocks have historically outperformed other investments such as onds or savings accounts. =ver the long term, an investment in stocks has historically had an average return of around 1051/H. To make money in the stock market, one must assume high risks.

ANA!YSIS TOO!S:)
There are two types of the analysis used y institutional and individual traders. #oth

fu*"ame*ta+ and tech*ica+ analysis serve the same purpose to help to define possi le future stock trend, yet, at the same time they are completely different in the way they analy7e stocks. #oth fundamental and technical analyses are important and depending on the trading style one or another could e applied. 2UN#AMENTA& ANA&3'I'45

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Aundamental analysis is the process of looking at a usiness at the asic or fundamental financial level. This type of analysis e)amines key ratios of a usiness to determine its financial health and gives you an idea of the value its stock. "any investors use fundamental analysis alone or in com ination with other tools to evaluate stocks for investment purposes. The goal is to determine the current worth and, more importantly, how the market values the stock. TECHNICA& ANA&3'I'45 Technical analysis looks at past performance of an analy7ed stock in order to find logical patterns that could e applied to the current situation on the market and reveal possi le future stock trend. $s a rule this type of the analysis is ased on the analysis of the volume and price charts, data, developing various technical indicators which. In the age of the computeri7ation many of the traders are choosing this type of the analysis mainly ecause of the availa ility and fast results. #y comparing technical and fundamental analysis there is no straight answer which one of them is etter. (owever taking into account different traders we may say that%

2or i*tra"ay tra"ers4 if a trader intends to make 153 trades a day, most likely, they do not care a out fundamental analysis at all. It does not matter to intraday traders what is going to happen to the company over the month, is it on the edge of filing ankruptcy or it is strong and growing. $ll they are interesting in is how volatile and how li!uid stock is and where the price of the stock is going to e in 10560 minutes. These traders rely solely on technical analysis.

2or 'hort5Term Tra"ers4 The same as intraday traders this type of trading does not assume holding position >own stocks? for a prolonged period of time. 15/ trades a week and even /56 trades a month is still a small timeframe to e othered y comple) fundamental analysis.

2or Mi"5Term Tra"ers4 #y going into /56 trades a year a traders may start to e interesting in some elements of the fundamental analysis. #y holding a stock for more than 4 month in your portfolio you suppose to know at least a little it a out the

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company. ;ou still may use technical analysis, yet some company research could e recommended for this type of traders.

2or &o*-5term Tra"ers4 If you intend to hold the stock of the company in your portfolio for a several years it ecomes essential to consult fundamental analysis. Those who trade inde)es still may use some elements of technical analysis, yet, when it comes to stocks you have to e sure it is not roken when you are willing to sell it and has at least the same value so you do not loose.

EQUITY RESEARCH : AN O%ER%IE*

Information is the plank on which financial markets operate. Traders with etter information and forecasting a ility will have an edge in the market place. Thus, there is a need for e!uity research and sophisticated financial modeling.

,!uity research is the pu lication

y analysts of reports, notes, and emails that offer an

investment recommendation on the !uoted stock of a company >typically uy, sell, or hold?. The recommendation is supported y an investment case, financial forecasts, and a valuation. -eports vary enormously, from short updates of a page or less to su stantial documents that analy7e whole industries and companies in great detail. The role of research is to provide information to the market. $n efficient market relies on information. $ lack of information creates inefficiencies that result in stocks eing misrepresented >over or under valued?. $nalysts use their e)pertise and spend a lot of time analy7ing a stock, its industry and peer group to provide earnings and valuation estimates. -esearch is valua le ecause it fills information gaps so that each individual investor does not need to analy7e every stock. This division of la or makes the market more efficient.

IN%EST&ENT RATIONA!E

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,ach investment alternative has its own strengths and weaknesses. Some options seek to achieve superior returns >like e!uity?, ut with corresponding higher risk. =ther provide safety >like PPA? ut at the e)pense of li!uidity and growth. =ther options such as A&s offer safety and li!uidity, ut at the cost of return. "utual funds seek to com ine the advantages of investing in arch of these alternatives while dispensing with the shortcomings. Indian stock market is semi5efficient y nature and, is considered as one of the most respected stock markets, where information is !uickly and widely disseminated, there y allowing each security:s price to adjust rapidly in an un iased manner to new information so that, it reflects the nearest investment value. $nd mainly after the introduction of electronic trading system, the information flow has ecome much faster. #ut sometimes, in developing countries like India, sentiments play major role in price movements, or say, fluctuations, where investors find it difficult to predict the future with certainty. Some of the events affect economy as a whole, while some events are sector specific. ,ven in one particular sector, some companies or major market player are more sensitive to the event. So, the new investors taking e)posure in the market should e well aware a out the ma)imum potential loss, i.e. 8alue at risk.

OB,ECTI%E O" THE PRO,ECT:)

The o jective of the project is to pick up 13 companies which are listed on the #om ay Stock ,)change and conduct a research on their securities, the organi7ation and operation of their markets. In the roadest terms, o jective is to develop, and thereafter communicate to investors, insights regarding the value, risk, and volatility of a covered security, and thus assist investors to decide whether to uy, hold, sell, sell short or simply avoid the security.

SCOPE O" THE STU'Y:)

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,!uity research forms an integral part of the share trading e)perience. ,!uity research decides the stance one would take in the share trading industry. Aorecasting scrip performance re!uires much more characteristics and skills than just advance arithmetical a ility. It re!uires split5hair analysis of the market. To do so one also needs to have e)cellent understanding of the market. Supported y valid, fact5 ased and relia le research inputs and pu lished results, the research picks out stocks, analy7es its future scope and give a timely recommendation.

&ETHO'O!O#Y:)
The data will e collected from the secondary sources such as company:s annual reports,

research reports, we sites, news articles etc. Time hori7on from /00I50J to /00K510 will e taken into account for analysis. There are various methods of research analysis like -atio $nalysis, *$P" "odel, &iscounted *ash Alows >&*A?, PL, ratio, ,PS estimation, S9=T analysis, ,conomic $nalysis, Industry $nalysis which would e used.

!I&ITATIONS O" THE STU'Y:)

,!uity research is done y highly e)perienced professionals. Therefore it re!uires a very deep and thorough knowledge of the su ject.

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This research directly influences the decisions of the investors there y making it e)tremely important to e very precise and careful. The results found should e very accurate which is not an easy task.

,very analyst has his own methods of forecasting therefore the results can vary.

The analyst has to take all factors into consideration and arrive at a pro a ilistic estimate of the company:s stock price. $nalyst will continuously upgrade or down grade his estimates depending on evolving conditions of ,conomy, Industry and *ompany plans.

&AIN TE$T

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"UN'A&ENTA! E%A!UATION:)
Aundamental evaluation employs a top5down approach that starts with the overall economy and then works down from industry groups to specific companies. $s part of the analysis process, all information is relative. Industry groups are compared against other industry groups and companies against other companies. Usually, companies are compared with others in the same group. Aor e)ample, a telecom operator >#harti airtel? would e compared to another telecom operator >reliance communication?, not to an oil company >=EG*?.

ECONO&IC ANA!YSIS
INTRO'UCTION
The ,conomy analysis is important to understand the macro5parameters for investment in a particular country. The set of indictors that define the economy includes the 2agging, 2eading and the incident indicators. These define the overall health of economy under consideration. The Glo al financial turmoil, was casted a ig impact on the world. ,ntire world economy got seriously affected y the crisis. (ence forth the world economy can e y and large segregated in the 6 phases, primarily pre52ehman de acle, the financial crisis and the latest eing the recovery. Some economists prefer to call this the M8: shaped recovery. 9hether the new phase can e termed as ;ellow weeds or green shoots remain to e seen.

*OR!' ECONO&IC STATISTICS AT A #!ANCE

9orld G&P >PPP?% N43 trillion G&P Growth -ate% 3./H
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Growth -ate of Industrial Production% 3H G&P #y Sector% Services5 4OH Industry5 6/H $griculture5 OH G&P Per *apita >PPP?% NK,IIO Population% 4.43 illion The Poor >Income elow N/ per day?% 6./3 illion >appro)imately 30H? "illionaires% K million >appro)imately 0.13H? 2a or Aorce% 6.16 illion ,)ports% N16.JI trillion Imports% N16.J1 trillion Inflation -ate 5 &eveloped *ountries% 1H 5 OH Inflation -ate 5 &eveloping *ountries% 3H 5 /0H Unemployment 5 &eveloped *ountries% OH 5 1/H Unemployment P Underemployment 5 &eveloping *ountries% /0H 5 O0H

IN'IA ECONO&IC ANA!YSIS

India economic analysis provides various inputs on economic condition of this south5east $sian country. It can e done oth at a microeconomic as well as a macroeconomic level. India economic analysis could also e descri ed as eing an e)planation of various economic phenomena going on in this country.

-ecent macroeconomic developments in India%

In $pril /00K, industrial sector in India had recorded a growth of I percent. (owever, this figure is lesser than 11 percent development, which had een achieved in $pril /00J. "uch of this critical condition could e attri uted to an increase in prices of oil. "easures that have een taken y -eserve #ank of India, like upward revision of repo rate and *--, have also contri uted to decrease in industrial production. "anufacturing and electric sector have suffered as well in recent times. Their growth rates have come down too. Aor manufacturing sector it was I.3 percent and for electricity sector, rate of development stood at 1.O percent in $pril /00J. This rate is significantly low when compared to statistics of $pril /00I, when rates of development for manufacturing and electricity were 1/.O
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percent and J.I percent respectively. In case of manufacturing sector much of this slump could e attri uted to increase in input costs like e)penses of oil, raw materials, rates of interest and prices of goods and services. "ining sector has een comparatively etter off as it has managed to grow at a rate of J percent in $pril /00K compared to /.4 percent that was achieved in $pril /00J. In core infrastructural industries, there has een deceleration as well, ut it is still etter off compared to non infrastructural industries in India. Growth in $pril /00J has een around 6.4 percent, which is less than 3.K percent achieved in $pril /00I. Industries like crude oil production, electricity and petroleum refinery have een performing elow e)pectations ut coal, finished steel and cement have performed etter than $pril /00I.

SENSE$ : AN IN'ICATOR O" THE IN'IAN ECONO&Y

Sense) is the u77word today that governs the activities of the investors in India. 9ith metamorphosis witnessed in all sectors and the country turning into a fast developing economy there is no dearth of investors. ,ven overseas investors are attracted towards sense) India and it has not een a decade that the stock market gained great momentum. The #S, inde) rose to such an escalating level that thousands of shares were eing traded every minute and more investors eing ready to invest. #ut the sudden downslide in the year /00J left all in panic ' reminding one of the Msnake P ladder: game. "any turned ankrupt, a num er of companies closed down, and financial chaos were the order of the day for over si) months at a stretch. The downslide affected the #S, sense), lowering the stock prices and investors were in a dilemma whether to take the risk or not. #ut now market conditions have changed for the etter@ the #S, inde), over the last few months, has een displaying a rising figure. $t present, the sense) inde) closed at 14JOO./0 up from the elow510,000 figure. The glo al recession period is a out to get over P the severely affected anks P e!uities are slowly reverting ack to their previous shape. $ll the investors trading in #S, stocks will feel
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glad to know that #om ay Stock ,)change >#S,? is also recovering from the massive effect that economic slowdown has left on it. #S, is one of the $sia:s oldest stock e)changes operating the stocks of a lot of companies from different sectors. India is e)panding at a rapid rate after *hina, ut the upward trend is one of the steadiest compared to the other foreign markets. India eing diverse in many sectors will see more upside due to the strong demand in information technology. The other sectors for future growth in India are energy, oil, and commodities. The Sense) has had its way will continue to grow. India:s economy is ooming and the high return will reflect on its stock market. The increase in sense) means lot of people who have invested and also persons invested in the mutual funds will e enefited .so the earning per capita is increasing , companies will grow so their ranches will too so employment the foreign investors will also invest and we will e enefited. S,ES,F is one of the major parameter y which growth of the indian companies and thus its impact on economy can e found out. Increase in Sense) means that companies are improving, thus unemployment will e decreased and also Income level of the people will also e leveled up. Thus it will definitely have a positive impact on the ,conomy which will have a positive flow or the positive impact on the country

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Sense) chart from /004510

"II-S IN"!O* IN THE IN'IAN ECONO&Y:)

Aoreign institutional investors >AIIs?, one of the largest categories of investors in the local e!uity markets, have ought Indian stocks worth N4.4O illion >-s/K,OJ1 crore? in the year5to5date, the highest in the first four months of a year since they were allowed entry into the country in 1KK/. The money that AIIs have pumped in eats the previous record of NO./1 illion that came in during Ganuary5$pril in /00O, when the markets were in the middle of a ull rally, according to data released y the markets regulator, the Securities and ,)change #oard of India >Se i?. India:s industrial production grew at 13.1H in Ae ruary over a year ago, and is seen at around the same level in "arch. 9ith company earnings growing at dou le5digit pace, the economy is forecast to grow at J.JH in /010, according to the International "onetary Aund.

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(owever, others are not so optimistic and said that risk appetite might wane ecause of the pro lems surrounding Greece and some other ,uropean economies such as Spain and Portugal. To e sure, a slowing of foreign inflows may help alleviate the concerns of policymakers worried a out inflation that:s close to dou le5digit levels, and the rupee:s appreciation, which makes Indian e)ports less competitive. The rupee has gained around 3H against the dollar since the start of the year. ,!uity markets around the world took a tum le recently, after credit rating agency Standard and Poor:s cut the de t rating of Greece to junk status on Tuesday and downgraded Spain and Portugal. 9hile the US: &ow Gones Industrial $verage fell 1.I3H in the week till 60 $pril, the UQ:s ATS, inde) shed 6.OKH. ,merging markets were hit too, with the local enchmark, the Sense), losing 1H over the week. The increase in AII inflows, however, hasn:t oosted the local markets much. The Sense) has gained only 0.3OH this year and the roader #S, 300 inde) /.K6H. Part of this is e)plained y the fact that local mutual funds have sold shares worth -sI,3/K crore in the same period. The Se i data also includes fund flows to the primary market. So far, this year, /J firms have raised money worth -s10,000 crore from new share sales.

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I&PACT O" UNION BU'#ET .010)11 ON SENSE$

The

enchmark Sense) saluted Union #udget /010 unveiled

y Ainance "inister Prana

"ukherjee and rallied over O00 points during the same day. ,)perts say it was a effect of short covering and positive reaction to udget. The Eifty closed a ove the OK00 mark ut the sell5off and profit ooking in IT* on hike in e)cise, #(,2, Tata Power, T*S, Infosys and $## erased more than 30H gains from day<s high. ,ven heavyweights came off their day<s high on profit ooking at higher levels. It seemed that the markets discouted the udget. Prana "ukherjee in his second udget announced some positives like gradual reduction in fiscal deficit, cut in surcharge, more allocation for infrastructure development, increase in A;11 divestment target, increase in personal ta) sla to -s J lakh etc, which all these pushed the sense) a ove. (owever, there were some negatives like hike in e)cise duties etc.

Inde) $UT= ",T$2 #$EQ,F P($-"$ "I&*$P -,$2T; =I2PG$S S"$22*$P *$P G==&s P=9,T,*k IT A"*G

*losing 8alue I,1I0.KK 14,O01.3/ K,J/J.4J O,K1/.KJ 4,6KI.J/ 6,/64.4K K,3K4./O J,04I.O0 16,OIO.J4 /,K41.34 6,1IK./1 3,1I6.KK /,44/.03

*hg >H? O.IO /.3J /./4 1.33 1.OI 1./4 1.0J 1.0J 1.04 0./4 0.06 50./K 5/./3

Page | 24

Positive glo al cues also helped the markets. ,uropean markets were trading 1H higher and US inde) futures were marginally in green. $sian markets also recovered in late trade@ (ang Seng was up 1H and Qospi up 0.O3H. Eikkei, Straits Times and Taiwan were marginally in green while Shanghai fell 0./JH. (owever, the markets shrugged off less5than5e)pected gross domestic product >G&P? data. The R6 G&P came in at 4H as against I.KH in the previous !uarter. Aor the period of nine5month ended &ecem er /00K, G&P growth stood at 4.IH versus I.1H on year5on5year asis. This was despite negative growth in agriculture.

Page | 2"

IN'USTRY ANA!YSIS
PHAR&ACEUTICA! IN'USTRY
This diagram provides a summary positional analysis of the pharmaceutical industry using Porter:s Aive Aorces model %

Page | 2&

Aigure% Porter:s Aive Aorces "odel for Industry $nalysis #arrier to entry% (igh >Pharmaceuticals?. *ost of -P& and patent limitations Industry *ompetition% (igh. $dvantages gained y first mover advantage >patents? Suppliers% supplier power is low #uyers% uyer power is low Su stitutes% low >with patents? medium >after patent e)piry?

=verall, the pharmaceutical industry shows an upward trend in its core markets. The industry remains highly valued, has a favoura le market position with strong financial make5up and strong earnings growth. Its future potential demand trend is positive and despite increased competition the industry still shows a continuing upward growth momentum. Aorecast of the leading 14 pharmaceutical companies for /001 to /00K suggests that com ined sales will grow at a minimum rate of 3./ percent ased on the potential of their product pipeline. *ipla 2a oratories continues to e the largest pharmaceutical company in the domestic market. *ipla has topped the =-G5I"S rankings for the month of Eovem er with a market share of 3.O/ per cent and sales of -s 1O4.6/ crore >-s 1.O46 million?, edging out -an a)y which stood at second position with 3.0K per cent market share and -s 16I.OK crore >-s 1.6IO million? sales.
Page | 2*

In =cto er, *ipla topped with -s 13/.0O crore >-s 1.3/0 illion? sales and a market share of 3./6 per cent, ahead of -an a)y, which garnered -s 1OJ.O0 crore >-s 1.OJO million? sales and 3.11 per cent market share, said sources. *ipla overtook -an a)y and Gla)oSmithQline India to ecome the largest pharmaceutical

company in the domestic market for the first time in "ay /00I. I*"ia,s To) 6 #ru- Cos Ra*( Com)a*y 1 / 6 O 3 4 I *ipla -an a)y Gla)oSmithQline Sydus *adila $lkem 2a oratories Sun Pharma Eicholas Piramal

9hile GSQ has maintained its num er three position in Eovem er, Sydus *adila >fourth?, $lkem 2a oratories >fifth? and Sun Pharma >si)th? have moved one rank up from =cto er. Eicholas Piramal, which faced raw material shortages for its largest selling codiene Eovem er. =-G5I"S, the largest market intelligence company in India focusing on the healthcare sector, tracks sales of Indian pharmas on a monthly asis, through over 6,000 stockists and 4,000 doctors. Indian companies are increasing their share in the domestic market mainly due to increased num er of high value new introductions, though the num er of new introductions has reduced recently. ased

formulations, like Phensydyl, in recent months, slipped three positions to num er seven in

Page | 2-

-an a)y<s growth has een largely driven y new introductions such as 8oli), an anti5dia etes drug launched recently, =frama)5Aorte and anti5asthmatic drug Synasma, which it in5licensed from ,urodrug 2a oratories. -an a)y<s anti iotic "o) >amo)yllin?, which was not among the top ten rands a year ago, has grown to ecome the fourth largest rand in the domestic market with monthly sales at -s K.J crore >-s KJ million? in Eovem er, sources said. *ipla<s growth was powered respiratory products. (owever, GSQ has lost market share mainly in its main portfolios such as anti5 infectives, dermatologicals and pain management drugs which grew slower than the market for these products. y positive growth in their e)isting portfolio, especially its

$E3 2IN#IIN!'45

Page | 21

The Indian pharmaceutical market was valued at NI,IO6m in /00J, an increase of O.0H over /00I. #usiness Insights anticipates that Indian pharmaceutical market will grow at a faster pace than the glo al pharmaceutical market, appro)imately at a *$G- of 16./H during /00K51O to reach a total value of N13,OK0m in /01O. India has emerged as a key destination for glo al pharmaceutical companies due to its high growth prospects led y ageing population, changing disease profile, and improving patent regime and socio5economic conditions. The Indian pharmaceutical market is highly competitive and fragmented with the top 10 players accounting for 64.1H of the total -P( sales in /00J.

CONC&U'ION45 The Pharmaceutical industry has a lot of yet untapped potential and it will e interesting to see how the industry matures over the long term. Undou tedly, the long history and glo al e)pertise of firms like cipla, GSQ and ran a)y will stand them in good stated to create and enefit from emerging glo al opportunities. Eotwithstanding its strengths, complacency must e guarded against ecause smaller, agile and innovative firms are on the prowl and all it takes for the small upstarts is a superdrug that can change the entire face of the industry. 9e:ve seen it in happen in the Information P *ommunications industry, for all we know pharmaceuticals may just e ne)t.

CONSTRUCTION IN'USTRY:)
India is on the verge of witnessing a sustained investment in infrastructure uild up. 9ith construction component accounting for O/H of the total investment in infrastructure, the construction industry has een witness to a strong growth wave powered y large spends in
Page | 35

housing, road, ports, water supply and airports development. The construction sector has grown at a *$G- of 14.3H during the last seven years and now accounts for 4.KH of India:s G&P compared to 3.IH in A;00. The Planning *ommission of India has proposed an investment of around USN 300 n in the ,leventh five5year plan >/00I5/01/?, which is nearly /.6 times more than the previous five5year plan. Arom a policy perspective, there has een a growing consensus that a private5pu lic partnership is re!uired to remove difficulties concerning the development of infrastructure in the country. &uring the tenth five5year plan >/00/50I?, the share of private players in the total investment was 1JH, which has increased to 60H during the eleventh five5year plan. The alance will e orne y the pu lic sector. The real estate industry comprising of construction and

development of properties has grown from family ased entities with focus on single products and having one market presence into corporate entities with multi5city presence having differentiated products. The industry has witnessed considera le shift from traditional financing methods and limited de t support to an era of structured finance, private e!uity and pu lic offering. The construction sector is a major employment driver, eing the second largest employer in the country, ne)t only to agriculture. This is ecause of the chain of ackward and forward linkages that the sector has with other sectors of the economy. $ out /30 ancillary industries such as cement, steel, rick, tim er and uilding material are dependent on the construction industry. $ unit increase in e)penditure in this sector has a multiplier effect and the capacity to generate income as high as five times. $E3 POINT'45
Page | 31

'u))+y

Past /56 years have seen a su stantial increase in the num er of contractors and uilders, especially in the housing and road construction segment.

#ema*"

&emand e)ceeds supply y a large margin. &emand for !uality infrastructure construction is mainly emanating from the housing, transportation and ur an development segments.

7arriers to e*try 2ow for road and housing construction. (owever, high working capital re!uirements can create growth pro lems for companies with weak financial muscle. 7ar-ai*i*)o.er su))+iers 2ow. &ue to the rapid increase in the num er of of contractors volumes. 7ar-ai*i*)o.er customers Com)etitio* 2ow. The country still lacks ade!uate infrastructure of facilities and citi7ens have to pay for using pu lic services. 8ery high across segments like road construction, housing and ur an infrastructure development. -elatively less in airport and port development. and construction service providers, margins have een stagnant despite strong growth in

'HARE TO !#P45 The Indian construction industry has een playing a vital role in overall economic development, as its contri ution to G&P at current market prices has gone up from 3.6H in A;0/ to around I.JH during A;0J. In fact, during A;0/5A;0J, the sector grew at *$G- of /0.6H.

Page | 32

*=E*2USI=E% -eal estate investments account for a out 40H of the total construction investments. &emand5supply gap for residential housing, favoura le demographics, rising afforda ility levels, availa ility of financing options as well as fiscal enefits availa le on availing of home loan are the key drivers supporting the demand for residential construction. In addition to this, demand for office space from ITL#P= segment is e)pected to continue due to emergence of India as a preferred outsourcing destination. $lso, oom in organi7ed retail is e)pected to result in huge demand for real estate construction. $ccording to industry estimates, the Indian real estate industry is e)pected to grow at a compounded rate of 66H etween A;03 to A;10, mainly driven y the residential segment.

Page | 33

TE!ECO& IN'USTRY:)
The Indian telecommunications industry is one of the fastest growing in the world and India is projected to ecome the second largest telecom market glo ally y /010.India added 116./4 million new customers in /00J, the largest glo ally. The country:s cellular ase witnessed close to 30 per cent growth in /00J, with an average K.3 million customers added every month. $ccording to the Telecom -egulatory $uthority of India >T-$I?, appro)imately 1O./3 million telephone connections, including wireline and wireless, were added during Guly /00K, taking the total num er of telecom su scri er ase at the end of Guly /00K to OIK.0I million from O4O.J/ million a month efore. $ccording to #usiness "onitor International, India is currently adding J510 million mo ile su scri ers every month. It is estimated that y mid /01/, around half the country<s population will own a mo ile phone. This would translate into 41/ million mo ile su scri ers, accounting for a tele5density of around 31 per cent y /01/. It is projected that the industry will generate revenues worth USN O6 illion in /0010511. "oreover, according to a study conducted y Eokia, the communications sector is e)pected to emerge as the single largest component of the country:s G&P with 13.O per cent y /01O. The Indian e!uipment market is estimated at USN /O illion in A;0K.

G-=9T(
$ccording to a Arost P Sullivan industry analyst, y /01/, fi)ed line revenues are e)pected to touch USN 1/./ illion while mo ile revenues will reach USN 6K.J illion in India. India has ecome the second country in the world to have more than 100 million *&"$5 ased >code division multiple access? mo ile phone su scri ers after the US, which has 13I million *&"$ users.

-I8$2-; $"=EG ,FISTIEG *="P,TIT=-S

Page | 34

*ompetition in the Indian telecommunications industry is concentrated in the mo ile segment, where there are up to si) operators in some circles. &espite intense competition, the rapid growth of the market has allowed these players to e)pand their su scri er ases even as they lose market share. There are three types of players in telecom services% State owned companies >#SE2 and "TE2?. Private Indian owned companies >-eliance Infocomm, Tata Teleservices. Aoreign invested companies >8odafone, #harti Tele58entures, Idea *ellular, Spice *ommunications?. Qey companies are% 7'N&4 Incum ent service provider and world:s Ith largest telecommunication company, state owned. =perates asic, cellular >GS" and *&"$? mo ile, Internet and long distance services. =perates in /1 circles>e)cept &elhi and "um ai?

MTN&4 State owned =perates in two circles &elhi and "um ai =perates asic, cellular >GS" and *&"$? mo ile, Internet and long distance services

7HARTI AIRTE&4 2eads the mo ile segment in the country =perates in 1I circles.

RE&IANCE COMMUNICATION'4 =ffers mo ile and fi)ed line telephony including road and, national and international long distance services, data services and a wide range of value added services and applications, new entrant in GS".
Page | 3"

Pan India presence

TATA TE&E'ER8ICE'4 =ffers mo ile and fi)ed line telephony including road and, national and international long distance services, data services and a wide range of value added services and applications, new entrant in GS". Pan India presence.

I#EA CE&&U&AR4 =ffers mo ile, national and international long distance services, data services and a wide range of value added services and applications, uses GS" technology. Pan India presence

*ompetition has intensified with the entry of new cellular players in select circles. -educing tariffs will hurt the new entrants as they will e una le to recover their high capital investments. The 9ireless Industry crossed 6K1million su scri ers mark at the end of the financial year /00J5 0K. The total su scri er ase of 6K1.I4 million comprise of /KI./4 >I3.JJH? million GS" and KO.30 >/O.1/H? million of *&"$ su scri ers. The market share of various service providers is depicted in the figure%

Page | 3&

"/012e 1: &a23et S4a2e of */2ele

O5e2ato2 6/n 78 a on 31 t &a294 .009

It is clear that no service provider has a major share and there is intense rivalry among the e)isting players in the market. Thus competitive rivalry is due to% -ush of new entrants Swift technology o solescence due to new product innovations "argin pressures due to fierce competition (igh e)it arriers due to speciali7ed instruments making it a risky usiness.

Thus companies have to change their strategies, need to provide good services and penetrate the market with low prices to survive in the cut throat competition. CONC&U'ION45

Telecom stocks have undergone major value erosion on the ourses after the tariff war started in late Septem er last year. The scrip of sector leader #harti $irtel has fallen y 64H since =cto er 1, /00K. The market capitali7ation of -eliance *ommunications >-*="?, the second5largest , has nearly halved, while that of Idea *ellular has fallen y /6H during the same period. Aurther, the customer loyalty has een reduced due to the entry of large num ers of players into the market. Govt. policies P stiff competition has made the growth of this sector very slow. Though there is still hope that the sectors will revive its full potential, it is etter to invest in other sectors if it is not a long term investment.

Page | 3*

CO&PANY ANA!YSIS
*ompany analysis commences from ratio analysis which is e)plained through the telecom companies. $ll the ratios, their interpretations, and the rationale have een e)plained through the telecom companies which simultaneously analy7es these companies as well.

RATIO ANA!YSIS
-atio analysis tool is used to analy7e the financial performance of the companies. Its performance is also compared against prominent private market players like, #harti $irtel, -eliance *ommunications, and Idea *ellular for /00K. 8arious ratio analysis will help to judge the, li!uidity, solvency, profita ility and overall efficiency of the firm. CURRENT RATIO

The *urrent -atio formula is%

The ratio is mainly used to give an idea of the company<s a ility to pay ack its short5 term lia ilities >de t and paya les? with its short5term assets >cash, inventory, receiva les?. The higher the current ratio, the more capa le the company is of paying its o ligations

Page | 3-

ratio

under 1 suggests that the

company would e una le to pay off its o ligations if they came due at that point. Ratio*a+e4 The higher the current ratio, the larger is the amount of rupees availa le per rupee of current lia ility, the more is the firm:s a ility to meet current o ligations and greater is the safety of firms of short term creditors. The need to safety margin arises from the inevita le unevenness in the flow of funds. The limitation of current ratio arises from the fact that it is quantitative rather than qualitative. I*ter)retatio*4 -eliance communication has /.I/ rupees to meet every one rupee of current lia ility, thus having sufficient safety margin ,and is good in short term li!uidity. #harti $irtel has low short term li!uidity .*urrent ratio of Idea cellular is appropriate as it is not too high and has a right alance. Since the companies are all service oriented, they do not have much inventories and hence the li!uid ratios are almost similar to the current ratios calculated a ove

#E7T' TO E9UIT3 RATIO4 It is a measure of a company<s financial leverage. #e:t5Equity ratio ; &o*- term "e:t<'hareho+"er=s Equity
Page | 31

The relationship etween orrowed funds and owners capital is a popular measure of the long term financial solvency of the company.

"/012e .: 'ebt E:1/t; Rat/o

Ratio*a+e4 if the ratio is greater than 1, the majority of assets are financed through de t. If it is smaller than 1, assets are primarily financed through e!uity. Aor instance the de t e!uity ratio is 1%/,it implies that for every rupee of outside lia ility ,the firm has / rupees .If the &L, ratio is high ,the owners are putting up relatively less money of their own, it is a danger signal for creditors. ,ven a high proportion of de t leads to infle)i ility in operation. I*ter)retatio*4 Tata Teleservices has a de t ratio of 0.O6%1 that is for every 0.O6 rupee of outside lia ility there is 1 rupee of owners fund and assets are primarily financed y owners fund. -eliance and #harti $irtel have low de t e!uity ratio this is ecause of the company is reinvesting the Profits into the usiness. This shows the strong confidence on the future outlook of the usiness. INTERE'T CO8ERA!E RATIO4

Interest Coverage Ratio = PBIT / Interest Expense $ ratio used to determine how easily a company can pay interest on outstanding de t.
Page | 45

The lower the ratio, the more the company is urdened y de t e)pense. 9hen a company<s interest coverage ratio is 1.3 or lower, its a ility to meet interest e)penses may e !uestiona le. $n interest coverage ratio elow 1 indicates the company is not generating sufficient revenues to satisfy interest e)penses.

"/012e 3: Inte2e t Co<e2a0e Rat/o

Ratio*a+e4 This ratio uses the concept of net profits

efore ta)es

ecause interest is ta)

deducti le .It indicates the e)tent to which a fall in ,#IT is tolera le in that of the a ility of the firm to service its interest payments would not e adversely affected. I*ter)retatio*4 Tata Teleservices has negative interest coverage ratio, that is firm is not making profits to cover its fi)ed charges. The firm also has high fi)ed income charges. The firm needs to look after its finances to increase earnings. #harti $irtel and Idea have apt interest coverage capacity. -eliance high Interest coverage ratio signifies that it has unused de t capacity. E7IT#A MAR!IN

E:it"a Mar-i* ; E7IT#A< Tota+ Re1e*ue

Page | 41

,#IT&$ margin measures the e)tent to which cash operating e)penses use up revenue. ,#IT&$ margin is often more useful than operating margin as it e)cludes non5cash items such as depreciation.

"/012e =: EBIT'A &a20/n

Ratio*a+e4 $n appro)imate measure of a company<s operating cash flow ased on data from the company<s income statement ,it is calculated y looking at earnings efore the deduction of interest e)penses, ta)es, depreciation, and amorti7ation. This earnings measure is of particular interest in cases where companies have large amounts of fi)ed assets ,high investments and significant amount of de t financing.. This measure is also of interest to a company<s creditors, since ,#IT&$ is essentially the income that a company has free for interest payments I*ter)retatio*4 Telecom industry is e)panding and thus has huge investments@ it is characteri7ed y more of de t financing. ,#IT&$ margin =f #harti $irtel, Idea and -eliance is good enough ut Tata Teleservices ,#IT&$ margin is not satisfactory. *ompany needs to enhance its revenues and keep a watch on its e)penses. RETURN ON CAPITA& EMP&O3E#4

$ test of profita ility related to the sources of long term funds.

Page | 42

ROCE T P#IT L >*apital U -eserve U 2ong Term 2ia ility? -=*, should always e higher than the rate at which the company orrows@ otherwise any increase in orrowing will reduce shareholders< earnings

"/012e 5: Ret12n on Ca5/tal E>5lo;e?

Ratio*a+e4 -eturn on *apital ,mployed >-=*,? is used in finance as a measure of the returns that a company is reali7ing from its capital employed. It is commonly used as a measure for compare assessing whether a usiness generates enough returns to pay for its cost of capital. -=*, compares earnings with capital invested in the company. The higher the ratio the more efficient is the use of capital employed. I*ter)retatio*4 #harti $irtel is market leader and has high -=*,. Tata Teleservices is not generating revenues from the capital invested in the company. $s the company is late entrant in the market and that also with *&"$ technology and cut throat competition presently its financial health is not good ut with tie up with ETT &ocomo it is e)pected to do well in future.

T=T$2 $SS,T TU-E=8,- -$TI=%

Page | 43

Com)a*y Name ACC

I*"ustry *ement 5 "ajor

&ast Cha*-e Price JJ/.03 54./0

> Ch50.I0

M(t Ca) %ei-ht ?Rs cr@ 14,3II./3 0.43

7harti Airte+

Telecommunications 5 Service

/J4.O0

5I.K3

5/.I0

10J,I41./ 4

O./I

7HE&

,ngineering 5 (eavy

/,O0/.1 0

56J.K0

51.3K

11I,3JI.4 0

O.41

Ci)+a

Pharmaceuticals

616.60

54.33

5/.03

/3,133.36

0.KK

#&2

*onstruction P *ontracting 5 -eal ,state

/K3.10

5K.00

5/.K4

30,0K0.01

1.KI

!rasim

&iversified

/,411.3 3

534./0

5/.11

/6,KO6.4/

0.KO

H#2C

Ainance 5 (ousing

/,I41.1 0

561.63

51.1/

IK,30/./K

6.1/

H#2C 7a*(

#anks 5 Private Sector

1,K6I.1 0

6./0

0.1I

JJ,44K.O3

6.OJ

Hero Ho*"a

$uto 5 / P 6 9heelers

1,JKO.0 0

J.03

0.O6

6I,J/0.J1

1.OJ

Page | 44

Hi*"a+co

$luminium

1I1.03

5O.O0

5/.31

6/,I/K.IJ

1./J

HU&

Personal *are

/64.10

50.K3

50.O0

31,30K.4/

/.0/

ICICI 7a*( #anks 5 Private Sector K16.K0 Tota+ Asset Tur*o1er ; Tur*o1er< Tota+ Assets to generate that turnover. I*fosys *omputers 5 Software /,43K.0 0

101,JJ3.I O.00 1 The asset turnover ratio simply compares the turnover with the assets that the usiness has used 514.10 50.40 13/,3J0.1 / 3.KK

5I.O3

50.J1

ITC

*igarettes

/3K./3

5/.40

50.KK

KJ,KJ4./6

6.JJ

Aai)ra(ash Asso

*onstruction P *ontracting 5 *ivil

166.J3

50.33

50.O1

/J,O00.JO

1.11

&arse*

,ngineering 5 (eavy

1,3OO.1 0

56.00

50.1K

K/,KJO.KK

6.43

"/012e et T12no<e2 Mah a*" $uto 5 *ars P Geeps 6: Total A 340.30 4.J0 1./6 61,64I.K4 1./6 Mah Ratio*a+e4 The total assets turnover ratio measures the use of all assets in terms of sales, y

comparing sales with total assets .In capital5intensive industries Total $sset Turnover ratio is typically 1. $ highP Total ratio might imply that the firm does not Maruti less than $uto 5 *ars Geeps$sset Turnover 1,/IO.K 51K.J0 51.36 64,J66.1O 1.O3 'uBu(i 0 generate a sufficient volume of usiness >sales? given its total asset investment . $lso, a high Total $sset Turnover might e the result of using outdated, o solete and fully depreciated assets which does not generate high sales volumes. NTPC Power 5 /06.40 51.O0 50.4J 14I,JII.4 4.3K GenerationL&istri ution 4 I*ter)retatio*4 Telecom industry is capital intensive and thus its total asset to turnover ratio is not high .Tata Teleservices has considera ly fair turnover ratio. ON!C =il &rilling $nd ,)ploration 1,061.0 0 5/0.O0 51.KO //0,31I.I 4 J.43

Re+ia*ce
Page | 4"

-efineries

1,04I.1 3

516.03

51./1

6OJ,KKJ.0 0

16.4K

Re+ia*ce Comm

Telecommunications 5 Service

1OI./0

5I.30

5O.J3

60,6J/.OJ

1.1K

Re+ia*ce I*fra

Power 5 GenerationL&istri ution

1,013.I 3

5OI.10

5O.O6

/O,JI/.I0

0.KJ

SNAPSHOT O" THE &AR(ET

'7I #anks 5 Pu lic Sector /,/K6.0 3 516.43 50.3K 1O3,3J1.I 4 3.I1

'ter+ite I*" "etals 5 =A EonS,ES,F Aerrous #S, T=P G$IE,-S

I63.33

5/0.30

5/.I1

41,J13.43

/.O6

Cha*-e ..r.t. &ast &ast &ast O6,3OO.00 Tata Motors $uto 5 2*8sL(*8s 516./3 51.46 1.I1 'cri) 'cri) O)e* Hi-h J00.30 &o. Com)a*y Tra"e" C+osi*- C+osi*Co"e !rou) Price Price Price Price Price Price ?Rs.@ ?>@ Tata Po.er Power 1,6/J.0 54.K0 50.3/ 61,31O.O0 1./O "ahindra P 5 3003/0 $ 333.00 344.03 331.00 33J.00 336.I0 O.60 0.IJ GenerationL&istri ution 0 "ahindra 3001J0 (&A* #ank 36/333 ETP* Tata 'tee+ $ 1,KO0.00 1,K30.00 1,K1I.00 1,KOI./0 1,K66.K0 16.60 0.4K /03.10 /04.00 /0/.63 /03.40 /03.00 0.40 0./K 3J3.43 514.10 5/.4J 31,KI1.1I /.0O $ Steel 5 2arge

TC'

*omputers 5 Software

I3I.00

51/.I0

51.43

1OJ,141.4 6

3.J1

#S, T=P 2=S,-S =A S,ES,F

%i)ro *omputers 5 Software 'cri) O)e* !rou) Price Hi-h Price 444.13 &o. Price 53.O3 50.J1 KI,J0O.JK 6.JO

'cri) Com)a*y Co"e

&ast &ast Cha*-e Tra"e" C+osi*- ..r.t. &ast Price Price C+osi*Price ?Rs.@ ?>@

3006K0 -eliance Infra 36/I1/ -eliance *omm

$ $ $ $ $

1,043./0 1,04I.13 1,004.00 1,010.13 1,04/.J3 53/.I0 5O.K4 133.00 403.40 1IJ.00 /K3.00 134.00 40J.J0 1IJ.00 /K4.00 1O4./3 3IK.00 14J.I0 /JO.I0 1OI.03 3J1.J3 14K.I0 /J3./0 13O.I0 5I.43 5O.K3 401.I3 51K.K0 56.61 1I3.O3 53.I3 56./J /KO.63 5K.13 56.11

300OI0 Tata Steel 300OO0 (indalco Inds 36/O3O #harti $irtel

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36/J4J &2A

606.00

60K.00

/K6.03

/K3.00

60O.10 5K.10 5/.KK

INTERPRETATION O" %ARIOUS PARA&ETERS I&PORTANT IN ANA!YSIN# A STOC(

EP'45
The portion of a company<s profit allocated to each outstanding share of common stock. ,arnings per share serves as an indicator of a company<s profita ility. *alculated as%

,arnings per share is generally considered to e the single most important varia le in determining a share<s price. It is also a major component used to calculate the price5to5earnings
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valuation ratio. $n important aspect of ,PS that<s often ignored is the capital that is re!uired to generate the earnings >net income? in the calculation. Investors also need to e aware of earnings manipulation that will affect the !uality of the earnings num er. It is important not to rely on any one financial measure, ut to use it in conjunction with statement analysis and other measures.

P<E RATIO45
$ valuation ratio of a company<s current share price compared to its per5share earnings. *alculated as%

In general, a high PL, suggests that investors are e)pecting higher earnings growth in the future compared to companies with a lower PL,. (owever, the PL, ratio doesn<t tell us the whole story y itself. It<s usually more useful to compare the PL, ratios of one company to other companies in the same industry, to the market in general or against the company<s own historical PL,. It would not e useful for investors using the PL, ratio as a asis for their investment to compare the PL, of a technology company >high PL,? to a utility company >low PL,? as each industry has much different growth prospects. The PL, is sometimes referred to as the DmultipleD, ecause it shows how much investors are willing to pay per rupee of earnings. If a company were currently trading at a multiple >PL,? of /0, the interpretation is that an investor is willing to pay rs./0 for rs.1 of current earnings.

7ETA45
$ measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. #eta is used in the capital asset pricing model >*$P"?, a model that calculates the e)pected return of an asset ased on its eta and e)pected market returns.. #eta is calculated using regression analysis, and one can think of eta as the tendency of a security<s returns to respond to swings in the market. $ eta of 1 indicates that the security<s price will move with the market. $ eta of less than 1 means that the security will e less volatile
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than the market. $ eta of greater than 1 indicates that the security<s price will e more volatile than the market. Aor e)ample, if a stock<s eta is 1./, it<s theoretically /0H more volatile than the market.

#E7T<E9UIT3 RATIO45
$ measure of a company<s financial leverage calculated y dividing its total lia ilities y stockholders< e!uity. It indicates what proportion of e!uity and de t the company is using to finance its assets.

$ high de tLe!uity ratio generally means that a company has een aggressive in financing its growth with de t. This can result in volatile earnings as a result of the additional interest e)pense. If a lot of de t is used to finance increased operations >high de t to e!uity?, the company could potentially generate more earnings than it would have without this outside financing. If this were to increase earnings y a greater amount than the de t cost >interest?, then the shareholders enefit as more earnings are eing spread among the same amount of shareholders. (owever, the cost of this de t financing may outweigh the return that the company generates on the de t through investment and usiness activities and ecome too much for the company to handle. This can lead to ankruptcy, which would leave shareholders with nothing. The de tLe!uity ratio also depends on the industry in which the company operates. Aor e)ample, capital5intensive industries such as auto manufacturing tend to have a de tLe!uity ratio a ove /, while personal computer companies have a de tLe!uity of under 0.3.

#I8I#EN# PA3OUT RATIO45

The percentage of earnings paid to shareholders in dividends. *alculated as%
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The payout ratio provides an idea of how well earnings support the dividend payments. "ore mature companies tend to have a higher payout ratio.

MAR$ET CAPITA&IZATION45
The total market value of all of a company<s outstanding shares. "arket capitali7ation is calculated y multiplying a company<s shares outstanding y the current market price of one share. The investment community uses this figure to determining a company<s si7e, as opposed to sales or total asset figures. *ompany si7e is a asic determinant of asset allocation and risk5 return parameters for stocks and stock mutual funds. The term should not e confused with a company<s Dcapitali7ation,D which is a financial statement term that refers to the sum of a company<s shareholders< e!uity plus long5term de t.

CD %EE$ HI!H<&O%45
The highest and lowest price at which a stock has traded in the past 1/ months, or 3/ weeks. "any investors see the 3/5week high or low as an important indicator.

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ANA!YSIS O" CIP!A:)

,PS PL, -$TI= #,T$ &,#TL,RUIT; -$TI= "$-Q,T *$P &I8I&,E& P$;=UT -$TI= S$2,S *U--,ET P-I*, 3/ 9,,Q (IG(L2=9

K.KK /6.K/ 0.OJ 0.// /3JJ41.J3 /6.O1 OK404.00 616.03 646L/11

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PRICE CHART O2 CIP&A45

Aor a medium to longer term investor, *ipla is still a decent and safe et. The stock is at a 3/ week high ut there is lot of positive news flow that can come still into the stock. It is going to commission a new factory ne)t year. It has had a very ig capital e)penditure plan, which is finally coming through. It is launching its inhaler in ,urope and US and that is a very margin usiness again for the company. It has had good revenue growth over the last few years and it has done !uite a lot etter than some of the other companies in its peer group. So from a fundamental prospective, one should hold on and if one is looking to uy, so now is a good time as any considering there is lot of positive news flow in pharma stocks as a whole. "arket capitali7ation stands at -s /3JJ41.J3 crore. The company<s ,PS was at -s K.KK per share> an increase from last year at rs. K.0/?. The stock<s price5to5earnings >PL,? ratio was /6.K/. The latest ook value of the company is -s 3O.1O per share. $t current value, the price5to5 ook value of the company was 4.6I. The dividend yield of the company was 0.3JH. The company touched its 3/ week high -s 646.00 and 3/ week low -s /11.

ANA!YSIS O" B4a2t/ A/2tel :)

,PS PL, -$TI= #,T$ &,#TL,RUIT; -$TI=

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/O.J/ 11.I0 0.K6 0./J

"$-Q,T *$P &I8I&,E& P$;=UT -$TI= S$2,S *U--,ET P-I*, 3/ 9,,Q (IG(L2=9

110/41/.J4 3.I6 6O01O/.K0 /J3./0 OK3L/60

PRICE CHART O2 7HARTI AIRTE&45

#harti $irtel has resistance at -s 6/05660. #harti $irtel fell a lot, so it has gone through a normal correction on the upside. There is a significant and of resistance at -s 6/05660 area and #harti $irtel could not cross it. That was only to e e)pected. It is now resuming its downtrend. #harti will see much lower levels and the telecom sector is going to see a lot of mayhem. It has not even started. So one would e etter off switching from #harti to may e a anking or even technology or metals. Telecom is not a good idea. #asically it has ought growth y going into $frica@ it was going into a phase where the growth was not likely to happen. So yes, it has got the new su scri er addition ut at the end of the day,
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it is going to take a out two5three years for it to make money for it to e ,PS accretive and that also if they are a le to ring down the operating cost su stantially. So one should wait efore entering into the stock and let all the ups and downs happen and may e si) months time is a good time to re5look at the story and enter into it.

ANA!YSIS O" '!" !T' :)

,PS PL, -$TI= #,T$ &,#TL,RUIT; -$TI= "$-Q,T *$P &I8I&,E& P$;=UT -$TI= S$2,S *U--,ET P-I*, 3/ 9,,Q (IG(L2=9

J.41 6O 1.41 0.IJ 311I46.63 /6.IK /J//3.K6 /K3 OK1L//1

PRICE CHART O2 #&2 &T#.

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In a tough economic environment over the last few !uarters, the company saw demand evaporate in all segments of real estate usiness ' residential and commercial, sale or leasing. In order to weather the tur ulent times, the *ompany affected a strategy which allowed itself to e li!uid, whilst it tested the right market conditions where it could attract significantly larger num er of end customers. 8alue proposition eing a key element of this strategy, the *ompany launched / different projects across India in the residential space and demonstrated leadership position within the industry to ring ack demand. The result of the a ove was that the *ompany made nota le sales in its afforda le housing segment. In continuation of this strategy in $pril /00K, &2A also launched its +city5centre. residential project in &elhi, which saw e)u erant response with all 1,634 units ooked in just one day. The share price has seen a 3/5week high of -s OK0.J0 and a low of -s //1 on #S,. *urrent ,PS P PL, ratio stood at J.41 and 6O respectively. &2A has increased rates of its inaugural project in #angalore named as &2A 9estend (eights. &2A has increased price to -s 6000Ls! ft from its previous price of -s 1J30s!Lft, which was set up in $pril.

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Increasing input costs was the cause of the price increase e)plains a company representative. The project is eing formulated in a land region of /I.3 acres. The project comprises 1KJ0 units spread across 1K towers, which are 1J floors high. 9estend (eights is the initial segment of Eew Town, with high5rise apartments.

ANA!YSIS O" !@T:)

,PS PL, -$TI= #,T$ &,#TL,RUIT; -$TI= "$-Q,T *$P &I8I&,E& P$;=UT -$TI= S$2,S *U--,ET P-I*, 3/ 9,,Q (IG(L2=9
PRICE CHART O2 &ET45

3I.I1 /6.13 1./I 0.36 K6K60.OO /0.3J 66K/46.I0 133K.J0 1J00LK46.J0

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&arse* E Tou:ro &imite" >2PT? is a technology5driven engineering and construction company with a strong presence in manufacturing, services and IT. The company has a presence in more than 30 countries, and the revenues e)ceed US NJ.3 illion. 2PT is one of the most widely held listed companies in India with AII5holding of 14.O. It has an uninterrupted &ividend payment record since 1KO4. In A; 0K it gave a dividend of -s. 10.3 per share. Shares of engineering major 2arsen P Tou ro were eaten adly after its !uarterly sales declined 4 per cent. 2PT<s net sales fell to -s J16K crore in the &ecem er !uarter, lower than the corresponding period a year ago. Its net profit grew 13 per cent to -s 4K4 crore over the same period a year ago. (owever, the 9ater Technology #usiness Unit of construction major 2arsen P Tou ro secured an international order of -s J305crore from Pu lic 9orks $uthority, Ratar, for advanced waste water treatment and ur an reuse which makes it an interesting stock to watch.

ANA!YSIS O" ,AIPRA(ASH ASSOCIATES:)

,PS
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I.3J

PL, -$TI= #,T$ &,#TL,RUIT; -$TI= "$-Q,T *$P &I8I&,E& P$;=UT -$TI= S$2,S *U--,ET P-I*, 3/ 9,,Q (IG(L2=9

16.43 1.44 /.00 /J6K3I.O/ 13.K0 3I4O1.J0 161.I0 1J0LJI

PRICE CHART O2 AAIPRA$A'H A''OCIATE'45

GP $ssociates looks very interesting. It has spent one year in hi ernation, so it seems to e making all the right noises of reaking out upwards from here though it hasn:t yet roken out. It will pro a ly have a uy on the stock. The share closed at -s 13I.13, up -s O.30, or /.K3H. "arket capitali7ation stands at -s 66,6OO.I6 crore.
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The company touched its 3/ week high -s 1J0.00 and 3/ week low -s JO.J6 on /1 =ct, /00K and /O $pr, /00K, respectively. *urrently, it is trading 51/.4KH elow its 3/5week high and J3./3H a ove its 3/5week low. The company<s trailing 1/5month >TT"? ,PS was at -s J.I/ per share. >&ec, /00K?. The stock<s price5to5earnings >PL,? ratio was 1J.0/. The latest ook value of the company is -s /K.6K per share. $t current value, the price5to5 ook value of the company was 3.63. The dividend yield of the company was 0.4OH.

"IN'IN#S AN' CON!USION

Investors have een taking shelter with defensive stocks of fast5moving consumer goods >A"*G? and pharmaceutical companies as the market turns weak in reaction to concerns that Greece:s grave financial crisis could spread to the rest of the euro 7one. The strategy, according to analysts, is to cushion the fall in value of their portfolios y uying A"*G and pharma stocks which are relatively less volatile. Shares of Gla)oSmithQline Pharma >GSQ?, 2upin and $ ott India scaled new highs while *ipla and (industan Unilever >(U2? were the top gainers among Sense) stocks in a choppy market on Thursday. The uying in some of these stocks could have also een driven y the fact that they vastly underperformed the roader market during the recent ull run, analysts say. 9hen risk5aversion increases in the market, investors tend to move away from high eta stocks to defensive stocks. Institutional investors usually uy defensive stocks as part of a reshuffling of their portfolios to minimise losses in a choppy market. The stock of GSQ pharma has gained 16H in the past months, compared to a 3H decline in the enchmark Sense). 2upin and *ipla are the other e)amples of outperformers in the pharma sector.

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$ few leading A"*G stocks led y (U2 also outperformed the market though analysts are of the view it is more ecause of technical factors ecause, fundamentally, there have een some concerns a out the prospects of the industry. Aactors like growing price competition and high raw material prices have een putting pressure on margins. -ural demand for consumer goods is also not picking up as e)pected.

&alal Street is likely to see a su dued trade for sometime in the a sence of any positive trigger from domestic front and on weak cues from glo al markets. Investor sentiment is low at this moment following the de t crisis in ,urope that has spooked markets across the glo e. The domestic market has een under pressure in past few trades and in coming days also the trend is likely to continue. $ccording to S"* *apitals ,!uity (ead Gagannadham Thunuguntla DThere are a lot of pressure points in market and after a recent rally that has taken the e!uity markets ahead of their valuations a correction was due. In the coming period, we will see downward trading,D

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RE"ERENCES

....mo*eyco*tro+.com ....yahoofi*a*ce.com ....eco*omictimes.i*"iatimes.com ....stoc(mar(etti)si*"ia.com ....+i1emi*t.com ....eco*omy.atch.com

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ANNE$URES Sample report of #harti airtel

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$E$2;SIS =A #($-TI $I-T,2

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COMPAN3 #ETAI&'45

Price Target% -s.630 "arket *ap% 11664I.03 PL, % 11.4K 3/ week highLlow% OK3L//K.30 #S, code % 36/O3O

'HAREHO&#IN! PATTERN45

PROMOTER=' HO&#IN!4 IE&I$E P-="=T,-S ' O3.60H A=-,IGE P-="=T,-S ' //.11H

NON PROMOTER=' HO&#IN!4 IESTITUTI=E$2 IE8,ST=-S #$EQS AIE.IEST. $E& IESU-$E*, ' O.OOH AII:S ' 1K.3JH

PU7&IC IN8E'TOR' ' 1.//H OTHER IN8E'TOR' ' 6.K0H

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PRICE CHART4

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2INANCIA& PER2ORMANCE 45
P AR T ICU! AR S C$STO(!%S #%OSS %!V!+$! ! IT,A PAT #%OSS ASS!TS CAPITAL !'P!+,IT$%! CAPITAL P%O,$CTIVIT) " Y. 0 0 A )0 B &4E2&-E541 2*5E122?n 114E51-?n &3E1"4?n 423E224?n 21-E543?n &3.-2F 3*3E"21?n 1"2E-"-?n *-E"15?n "-&E&1&?n 1&&E14"?n " Y. 0 0 B )0 9 CO((!+TS 1&E&41E4-* #rowt9 of "5F)0o0) #rowt9 of 3-F)0o0) #rowt9 of 34F)0o0) #rowt9 of 23F)0o0) In>rease bB %s 1&3E312?n ,e>line of 2"F)0o0) &3.&*F

&I9UI#IT345 $s on march 61,/00K, the company has cash and ank alance of -s. /I,440mn and marketa le securities of -s. /6,O// mn. The company actively manages its short term li!uidity to generate optimum returns via investments made in de t and money market instruments including ank fi)ed deposits P certificates of deposits, li!uid and income de t fund schemes, fi)ed maturity plans and other similar instruments.

#I8I#EN#45 *ompany paid a final dividend of -s. / per e!uity share of -s.10 each>/0H of face value? for the A; /00J50K. The total dividend payout will amount to -s OOO/ mn, including -s. 4O3mn as ta) on dividend.

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$E3 2INANCIA&'4

(A%C2 G 5*(A%C2G5- (A%C2G51 +!T SAL!S 1*-"1.&1 2"*&1.11 3454-.32 +!T P%OFIT 4533.23 &244.11 **43.-4 S2A%!SI+ ISS$!HLA.2SI 1-1"1.34 1-1*1.5* 1-1-2.4 !PSH%sI 21.2* 32.1 45.*1 OO. VAL$! &5.11 15&.34 14".51 %!T$%+ O+ CAP !(PLO)!,HF I 21.5& 2*.1" 2-.4 %!T$%+ O+ +!T 3O%T2HF I 3".3" 35.14 2-.13 +!T ,! T TO ! IT,A 5."5.3& 5.""

COMPAN3 7AC$!ROUN#45

7harti Airte+ formerly known as 7harti Te+e58e*tures &T# >#T82? is the largest cellular service provider in India, with more than 1/1 million su scri ers as of Ganuary /010. 9ith this, #harti is now the world<s third5largest, single5country mo ile operator and si)th5largest integrated telecom operator. It also offers fi)ed line services and road and services. It offers its T,2,*=" services under the Airte+ rand and is headed y Sunil #harti "ittal. The company also provides telephone services and road and Internet access >&S2? in top K3 cities in India. It also acts as a carrier for national and international long distance communication services. The company has a su marine ca le landing station at *hennai, which connects the su marine ca le connecting *hennai and Singapore.

$E3 POINT'45

IN#IA=' MO'T INNO8ATI8E COMPAN34

$ccording to a survey conducted y the 9all Street Gournel $sia, #harti $irtel is rated as the most innovative company in India.

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$s part of the journal:s efforts to determine /00 most admired firms in $sia, 9all Street journal released list of top 10 Innovative companies in the region. #harti $irtel holds Oth position in the region and stood first among the Indian companies in the innovative firms category. The our*a+ comme*te" 7harti Airte+=s -ro.th as a c+ear ref+ectio* of co*sumer :oom i* the cou*try a*" a))reciate" the com)a*y for creati*- u*ique )ro"ucts for the mar(et a*" im)orti*- smart i"eas from o1erseas/ e0te*"i*- their reach i*to I*"ia* society a*" raisi*sta*"ar"s of ser1ice. AC9UI'ITION 73 7RITI'H TE&ECOM4

In 1KKI, #ritish Telecom ac!uired a /1.03H e!uity interest in harti cellular. #harti Telecom and #ritish Telecom formed a 31H % OKH joint venture, #harti #T Internet for providing Internet services. In /00/, harti came out with issue of 1J.36 crore e!uity shares through ook uilding route with a floor price of -s O3 per share, received id for 1J.33 crore shares. Through the issue, it ecomes the first com)a*y i* I*"ia to come out .ith FGG> :oo( :ui+"i*issue.

IN#U'TR3 ANA&3'I'45

Last Price B arti Airtel Reliance Comm I"ea Cell#lar Tata Comm &T'( TataTeleser)ice +pice Comm T#lip Telecom '# Te, In"ia -ol"stone In.ra !"#.$% 163.05 6!.30 !9$.%0 %$.00 !$.15 5%.!0 919.95 33.!5 !%.%5

Market Cap.
(Rs. cr.)

Sales Turnover *+'$&+.!# 13,610.5 9,916.$5 3,%$9.$3 $,5%6.53 !,0$1. 1,5 5.3$ 1,60 .! 159.09 $5.61

Net Profit ('(+*."+ !,35!.93 1,00 .!1 515.95 !1$. 3 *159.60 *1,015.!! !$9.5 1$.$ 6.!%

Total Assets *%'*%(.)! !,593.93 1 , %3.%9 9,1!5.9! 1!,059.3 !,%$3.96 1, %5.9$ 1, 0!. $ 1%1.93 110.56

&$#'(%#.)) 33,653.96 19,315.91 ,39 .95 $,66!.00 $,5 1.%3 3,9$6.3% !,66%. 6 11$.%% 100.1!

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The Indian telecom sector has seen a phenomenal growth and currently has close to O60mn telecom customers. The market surpassed the US$ to ecome the second largest market in the world after china. Eotwithstanding this, the telecom penetration is only 6IH with a wireless penetration of 66.IH and road and penetration of 0.3OH,there y offering a good growth potential. #harti airtel ,with over K4mn customers as on march 61,/00K, is the largest integrated telecom operator in India with investment of -s /6,OJKmn, revenues of -s6I6,3/1mn and -s IJ,3K0mn in net profits. It is among the top 3 companies in terms of market capitali7ation in India.

IN8E'TMENT PO'ITI8E'45

The Indian growth story continues and the revival of the economy is on its way. There are no dou ts that telecom sector will lead the economic revival and #harti airtel will e at the forefront. #harti airtel is the first private mo ile GS" operator to have an all india footprint and operations in Sri 2anka.

'TRON! 'U7'CRI7ER !RO%TH CONTINUE'45 The company continues to focus on su scri er additions in order to increase its market penetration. The company is currently adding a out O4 su scri ers every minute. This takes the company:s total su scri er ase to just under K0 million which is a out /3H of the country:s wireless users. The opportunity to increase this ase is immense as the country:s tele density currently is just over 60H as compared to developed countries where teledensity ranges around J0H. This approach y telecom companies to gain market share will oost top line growth as well as profita ility and is also the major growth driver in the industry.

2ORA3 INTO E&ECTRONIC ME#IA 7ROA#CA'TIN!45 The company provides &S2 and telephone services in 13 circles spanning over K3 cities with growing focus on new media and entertainment solutions such as &T( and IPT8. $s on march
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61,/00K, the company had /,I/4,/6K customers , a growth of 1K.6H , of which 6K.6H were su scri ing to road andLinternet services. The revenue from the telemedia services were -s.66,O/4mn, a growth of 1IH over the revenues in the previous financial year.

'TRATE!IC A&&IANCE' TO IMPRO8E 9UA&IT345 The company is constantly looking forward at providing value added services in order to retain its su scri ers. The company has entered into contracts and strategic alliances with several market leaders in their respective areas of concentration. The company has a strategic alliance with Infosys in order to manage its recently launched &T( service. The company has also an alliance with I#E in order to service its operations in Sri 2anka.

OUT&OO$ AN# 8A&UATION45 *onsidering the a ove mentioned investment rationale, the company can e rated an outperformer. The stock currently trades at a PL, of 11.4K.

!&O7A& EHPAN'ION45 The telecom sector continues to play an important part in India:s growth story. #harti airtel with 100 million customers is eminently placed to leverage the enefits of the strong customer trust that they have een a le to uild. The addition of new services like &T( and IPT8 will ensure airtel retains and further strengthens its rand leadership. $s a first step towards pursuing the international aspirations, airtel commenced operations in Sri 2anka. The run away success of the launch has justified the conviction that the airtel usiness model can e effectively and profita ly replicated in other countries.

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