CHAPTER-I 1-6

INTRODUCTION:

• NEED OF THE STUDY

• OBJECTIVE OF THE STUDY
• METHODOLOGY
• LIMITATIONS

CHAPTER-II 7-42

COMPANY PROFILE

CHAPTER-III 43-86

DATA ANALYSIS
CEMENT INDUSTRY
STEEL INDUSTRY

CHAPTER-IV 87-115

Annexure of Different Company

CHAPTER-V 115-123

SUGESSIONS
FINDINGS & CONCLUSION
BIBILIOGRAPHY

1
 ABSTRACT

The project entitled Equity Analysis and Share Price Movement of four different
Indian industries is basically useful for the investors who invest in the stocks in
share market.

The findings of this study help an investor to evaluate a particular company’s

performance in the industry and its share price movement in the market by using
simple techniques of “Fundamental and Technical Analysis”.

This analysis is done because the security (share) prices in an effective capital
market fully reflect their investment value as the market has the capability to
instantaneously impound the given set of information into pricing process.

The empirical findings would be useful to investors as it provides evidence of

time varying nature of the stock market volatility. Investors aim at making more
profitable and less risky investments. Therefore, the need to study and analyze
stock market, among many other factors, before making investment decisions, but
it is impossible to consistently make abnormal returns using trading strategy based
on a given set of information when the markets are efficient.

Thus this study of Equity Analysis and Share Price Movement will be an effective
guide for an investor of stocks for the profitable investment return.

2
 1.1 INTRODUCTION

As the security market is on the process of an ongoing revolution with various

marketable securities traded in the stock exchange. One of the many things people
always want to know about the stock market is, “How do I make money by
investing in the stock Market ?” There are many different approaches; two basic
methods are classified as either fundamental analysis or technical analysis.
Fundamental analysis refers to analyzing companies by their financial statements
found in SEC Filings, business trends, general economic conditions, etc. Technical
analysis studies price actions in markets through the use of charts and quantitative
techniques to attempt to forecast price trends regardless of the company’s financial
prospects.
Additionally, many choose to invest via the index method. In this method, one
holds a weighted or unweighted portfolio consisting of the entire stock market or
some segment of the stock market (such as the NIFTY or SENSEX). The principal
aim of this strategy is to maximize diversification, minimize taxes from too
frequent trading, and ride the general trend of the stock.

3
 1.2 NEED OF THE STUDY

 The main need of the study is to describe the techniques and planning in

today’s investment environment. Apart from this the objective of this project
study is to keenly understand issues examines all the essential analysis and
teaches how to apply them successfully. It incorporates sections on
fundamental analysis and technical analysis in the contexts of companies
and markets. The purpose of this study is to give suitable guidance to retail
investor. For this purpose two different industries with two companies in
each industry are taken for analysis.For this study the data is collected using
Balance Sheet, Income Statement, Ratio Analysis and Market Price of
Shares of the Companies of past years.

4
 1.3 OBJECTIVES OF THE STUDY

 Is to suggest the investor how to analysis the stock before investing into any

company’s stock.

 The objective of the study is to look into the scientific approach for selecting
a stock where Fundamental Analysis and Technical Analysis are looked
into.

 The study deals with analysis of performance of the company, share price
fluctuations and profit of the company and comparing it with another
company from same sector.

 The purpose of the study is to locating a stock which gives good returns with
minimum risk.

 The purpose of the study is to give awareness about analysis part of the
stock before buying it.

1.4 RESEARCH METHODOLOGY

The study is mostly based on the secondary information from the records of Inter-
connected Stock Exchange of India Limited (ISE). Necessary primary information
has been collected from ISE. Part of the information is collected from the
Textbooks, Journals, Newspapers, different Websites, and from companies’ site
for an understanding of financial performance of the Cellular Companies.

5
 1.5 LIMITATIONS OF THE STUDY

 All the limitations of Fundamental Analysis, Technical Analysis are applicable

to the study.

Due to time constraint, a comprehensive and meticulous study was not possible. As
a result, there might be change of errors creeping in.

 Owing to the busy schedule of the executives and the staff in the company,
exhaustive primary data couldn’t be collected. Which might affect the result of
the study,.
 Recommendations of the study are only personal options.
 Hence judgments may not be considered as ultimate and standard solution.

6
 CHAPTER: 2
2.1 LITERATURE REVIEW
2.2 INDUSTRY PROFILE
STOCK EXCHANGE
2.3COMPANY PROFILE
INTER-CONNECTED STOCK EXCHANGE OF
INDIA LIMITED [ISE]

2.1 LITERATURE REVIEW

7
Title : How Stocks Trade & How Price Movement take Place
Author : Abhishek Parka
Journal : Fundamental of stock market
Keywords : Articles, BSE, EP knowledge center, Indian stock market, NSE
Abstract :

At the most fundamental level, supply and demand in the market determines stock prices.
Price times the number of shares outstanding (market capitalization) is the value of a company,
comparing just the share price of two companies is meaningless. Theoretically, earnings are what
affect investor’s valuation of a company, but there are other indicators that investors use to
predict stock price. Remember, it is investor’s sentiments, attitudes and expectations that
ultimately affect stock prices. There are many theories that try to explain the way stock prices
move the way they do. Unfortunately, there is no one theory that can explain everything.

Title : Effect of Mergers on the Share Price Movement of the Acquiring

Firms:
A UK study
Author : J.C Dodds*, J.P. Quek*
Journal : journal of business finance & accounting
Abstract :

The profitability of mergers in Britain has not received the same attention as in the USA.
This study examines mergers for the UK industrial sector as a whole for a period (1974-76)
when merger activity was relatively slack. A standard methodology is used, but the size effects
and the activeness of acquirers as well as the financing of the acquisition are examined. The
conclusions contradict to some extent those found by other researchers in that the evidence was
incenses-tent with the efficient markets hypothesis. The effect of taking firm size into account
was found to reduce the standard deviations of the sample and it would appear that the cash
mergers were viewed as less desirable by the market compared to equity exchange. For the
separation of merger active Hon active firms it was found that there was less dispersion of the
residuals for non-merger active firms.

8
Title : SEBI probing steel share price movements
Author : Dinesh Narayanan
Journal : The Hindu Business Line
Abstract :

The securities and exchange board of India has launched an investigation into the
‘unusual’ price movement of shares of about half dozen steel companies, including that of steel
authority of India ltd (SAIL), over the past few days. According to sources, the regulator has
asked stock exchanges to find out whether any of these companies or its officials has violated
listing agreements and whether there was concentrated trading in the shares.

2.2 INDUSTRY PROFILE

9
 STOCK EXCHANGE

HISTORY:

The only stock exchange operating in the 19th century was Bombay Stock
Exchange set up in 1875 and Ahmadabad set up in 1894. There were organized as
voluntary non-profit making association of brokers to regulate and protect their
interests. Before the control on securities trading became a central subject under
the constitution in 1950, it was a state subject and the Bombay securities contracts
(control) Act if 1925 used to regulate trading in securities. Under this Act, the
Bombay Stock Exchange was recognized in 1927 and Ahmadabad in 1937.

During the war boom, a number of stock exchanges were organized even in
Bombay, Ahmadabad and other centers, but they were not recognized. Soon after
it became a central subject, central legislation was proposed and a committee
headed by A.D. Gorwala went into the bill for securities regulation. On the basis of
the committee’s recommendations and public discussion, the securities contracts
(regulation) Act became law in 1956.

DEFINITION OF STOCK EXCHANGE:

10
“Stock Exchange means anybody or individuals whether incorporated or not,
constituted for the purpose of assisting, regulating or controlling the business of
buying, selling or dealing in securities.”

It is an association of member brokers for the purpose of self-regulation and

protecting the interests of its members.

It can operate only if it is recognized by the government under the securities

contacts (regulation) Act, 1956. The recognition is granted under section 3 of the
Act by the central government, Ministry of Finance.

REGULATION OF STOCK EXCHANGE:

The Securities contracts (regulation) act is the basis for operations of the Stock
Exchanges in India. No exchange can operate legally without the Government
permission or recognition. Stock Exchanges are given monopoly in certain areas
under section 19 of the above Act to ensure that the control and regulation are
facilitated. Recognition can also be withdrawn, if necessary where there are no
Stock Exchanges in its absence.

SECURITIES AND EXCHANGE BOARD OF INDIA [SEBI]:

11
SEBI was setup as an autonomous regulatory authority by the Government of India
in 1988 to protect the interests of investors in securities and to promote the
development and to regulate the securities market and for matters connected there
with or incidental there to. It is empowered by two acts namely SEBI Act, 1992
and Securities Contract (regulation) Act, 1956 to perform the function of
protecting investor’s rights and regulating the capital markets. SEBI was given
statutory status by an Act of Parliament on April 4, 1992. SEBI was authorized.

1) To regulate all merchant banks on issue activity

2) To lay guidelines, and supervise and regulate the working of mutual funds,
and
3) To oversee the working of stock exchange of India.

Stock Market Index:

12
 The movements of the prices in a market or section of a market are captured in price
indices called stock market indices, of which there are many, e.g., the S&P, the FTSEand the
Euronext indices. Such indices are usually market capitalization (the total market value of
floating capital of the company) weighted, with the weights reflecting the contribution of the
stock to the index. The constituents of the index are reviewed frequently to include/exclude
stocks in order to reflect the changing business environment.

There are mainly two indices in India:

1. Bombay Stock market (BSE):

2. National Stock Exchange (NSE):

• Bombay Stock Exchange (BSE):-

13
 The Bombay Stock Exchange Limited (formerly, The Stock Exchange, Mumbai;
popularly called The Bombay Stock Exchange, or BSE) is the oldest stock exchange in Asia. It
is located at Dalal Street, Mumbai, India.

The Bombay Stock Exchange was established in 1875. There are around 4,800 Indian
companies listed with the stock exchange, and has a significant trading volume. As of August
2007, the equity market capitalization of the companies listed on the BSE was US $ 1.11 trillion.
The BSE SENSEX (Sensitive index), also called the "BSE 30", is a widely used market index in
India and Asia. It is located at Dalal Street, Mumbai, India.

• National Stock Exchange (NSE):-

14
 The National Stock Exchange of India Ltd. (NSE), set up in the year 1993, is today the
largest stock exchange in India and a preferred exchange for trading in equity, debt and
derivatives instruments by investors. NSE has set up a sophisticated electronic trading, clearing
and settlement platform and its infrastructure serves as a role model for the securities industry.
The standards set by NSE in terms of market practices; products and technology have become
industry benchmarks and are being replicated by many other market participants.

NSE provides a screen-based automated trading system with a high degree of

transparency and equal access to investors irrespective of geographical location. The high level
of information dissemination through the on-line system has helped in integrating retail investors
across the nation.

The exchange has a network in more than 350 cities and its trading members are
connected to the central servers of the exchange in Mumbai through a sophisticated
telecommunication network comprising of over 2500 VSATs.

NSE has around 850 trading members and provides trading in equity shares and debt
securities. Besides this, NSE provides trading in various derivative products such as index
futures, index options, stock futures, stock options and interest rate futures.

In addition to these organizations there are other organizations highlighting on the share
trading in the Indian Stock Market are:

● Securities and Exchange Board of India (SEBI)

● NSDL
● CDSL

15
NSE-NIFTY

The NSE on April 22, 1996 launched a new equity Index. The NSE-50. The new
Index which replaces the existing NSE-100 Index is expected to serve as an
appropriate Index for the new segment of futures and options. “NIFTY” means
Nations Index for Fifty Stocks. The NSE-50 comprises 50 companies that
represent 20 broad industry groups with an aggregate market capitalization of
around Rs. 1,70000crs. All companies included in the Index have a market
capitalization excess of Rs. 500crs each and should have traded for 85% of trading
days at an impact cost of less than 1.5%.

NSE- MIDCAP INDEX

The NSE midcap Index or the Nifty comprises 50 stocks that represent 21 boards
industry groups and will provide proper representation of the midcap segment of
the Indian Capital Market. All stocks in the Index should have market
capitalization of greater than Rs. 200crs and should have traded 85% of the trading
days at an impact cost of less 2.5%. The base period for the index is Nov 4, 1996
which signifies two years for completion of operations of the capital market
segment of the operations. The base value of the Index has been set at 1000.

16
MISSION:

NSE’s, mission is setting the agenda for change in the securities markets in India.
The NSE was set-up with the main objectives of:

• Establishing a nationwide trading facility for equities, debt instruments and

hybrids.
• Ensuring equal access to investors all over the country through an
appropriate communication network.
• Meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technology has become
industry benchmarks and is being emulated by other market participants. NSE is
more than a mere market facilitator. It’s that force which is guiding the industry
towards new horizons and greater opportunities.

PROMOTERS:

17
NSE has been promoted by leading financial institutions, Banks, Insurance
companies and other financial intermediaries:

 Industrial Development Bank of India Limited

 Industrial Finance Corporation of India Limited
 Life Insurance Corporation of India
 State Bank of India
 ICICI Bank Limited
 IL & FS Trust Company Limited
 Stock Holding Corporation of India Limited
 SBI Capital Markets Limited
 The Administrator of the Specified Undertaking of Unit Trust of India
 Bank of Baroda
 Canara Bank
 General Insurance Corporation of India
 National Insurance Company India
 The New India Assurance Company Limited
 The Oriental Insurance Company Limited
 Punjab National Bank
 Oriental Bank of Commerce
 Corporation Bank
 Indian Bank
 Union Bank of India

18
At present, there are 24 Stock Exchanges recognized under the Securities Contract
(Regulation) Act, 1956. They are:

NAME OF THE STOCK EXCHANGE YEAR

Bombay Stock Exchange 1875
Ahmadabad Share and Stock Brokers Association Ltd. 1957
Calcutta Stock Exchange Association Ltd. 1957
Delhi Stock Exchange Association Ltd. 1957
Madras Stock Exchange Association Ltd. 1958
Indore Stock Exchange Association Ltd. 1968
Bangalore Stok Exchange 1943
Hyderabad Stock Exchange 1978
Cochin Stock Exchange 1982
Pune Stock Exchange 1982
U.P. Stock Exchange Association Ltd. 1983
Ludhiana Stock Exchange Association 1983
Jaipur Stock Exchange Ltd. 1984
Gauhathi Stock Exchange Ltd. 1985
Mangalore Stock Exchange Ltd. 1986
Maghad Stock Exchange Association Ltd. 1989
Bhubaneshwar Stock Exchange Association Ltd. 1989
Over the Counter Exchange of India, Bombay 1990
Saurashtra Kutch Stock Exchange Ltd. 1991
C Stock Exchange Ltd. 1991
Coimbatore Stock Exchange Ltd. 1991
The Meerut Stock Exchange Ltd. 1991
National Stock Exchange Ltd. 1991
Integrated Stock Exchange Ltd. 1999

19
  Saving:

 Saving are excess of income over expenditure for any economic unit .
 Thus ,S = Y – E
Where, S is saving,
Y is income and E is expenditure.
 Secondly, excess funds or surplus in profits or capital gains are also available for
investment. Thus,
S = W1 – W2
Where, W1 is wealth in period 2,
W2 is wealth in period 1,
So, the difference between them is capital gains or losses.

 Thirdly, investment is also made by many companies and individuals by

borrowing, from others. Thus the Corporate Sector and Government Sector are always
net borrows, as they invest more than their savings. Thus,
S=B–L
Where, B is borrowings
L is landings
Savings can be negative or positive.

20
  Why Saving:

 Saving is abstaining from present consumption for a future use. Saving are
sometimes autonomous coming from households as a matter of habit. But bulk of the
savings come for specific objectives, like interest income, future needs, contingencies,
precautionary purposes, or growth in future wealth, leading to rise in the standard of
living etc.

 Saving and Investment:

 Investors are savers but all savers cannot be good investors, as investment is a
science and an art. Savings are sometimes autonomous and sometimes induced by the
incentives like fiscal concessions or income or capital appreciation. The number of
investors is about 50 million out of population of more than one billion in India. Savers
come from all classes except in the case of the population who are below the poverty
line. The growths of urbanization and literacy have activated the cult of investment.
More recently, since the eighties the investment activity has become more popular with
the change in the Government Polices towards liberalization and financial deregulation.
The process of liberalization and privatization was accelerated by the Government policy
changes towards a market oriented economy, through economic and financial reforms
stated in July 1991.

21
  What is Investment ?

 Investment is the activity, which is made with the objective of earning some sort
of positive returns in the future. It is the commitment of the funds to earn future returns
and it involves sacrificing the present investment for the future return. Every person
makes the investment so that the funds he has increases as keeping cash with himself is
not going to help as it will not generate any returns and also with the passage of time the
time value of the money will come down. As the inflation will rise the purchasing power
of the money will come down and this will result that the investor who does not invest
will become more poor as he will not have any funds whose value have been increased.
Thus every person whether he is a businessman or a common man will make the
investment with the objective of getting future returns.

 Types of Investments :

There are basically three types of investments from which the investors can choose. The
three kinds of investment have their own risk and return profile and investor will decide
to invest taking into account his own risk appetite. The main types of investments are: -

 Economic investments:-
These investments refer to the net addition to the capital stock of the society. The capital
stock of the society refers to the investments made in plant, building, land and machinery
which are used for the further production of the goods. This type of investments are very
important for the development of the economy because if the investment are not made in
the plant and machinery the industrial production will come down and which will bring
down the overall growth of the economy.

22
 Financial Investments:-
This type of investments refers to the investments made in the marketable securities
which are of tradable nature. It includes the shares, debentures, bonds and units of the
mutual funds and any other securities which is covered under the ambit of the Securities
Contract Regulations Act definition of the word security. The investments made in the
capital market instruments are of vital important for the country economic growth as the
stock market index is called as the barometer of the economy.

 General Investments:-
These investments refer to the investments made by the common investor in his own
small assets like the television, car, house, motor cycle. These types of investments are
termed as the household investments. Such types of investment are important for the
domestic economy of the country. When the demand in the domestic economy boost the
over all productions and the manufacturing in the industrial sectors also goes up and this
causes rise in the employment activity and thus boost up the GDP growth rate of the
country. The organizations like the Central Statistical Organization (CSO) regularly
takes the study of the investments made in the household sector which shows that the
level of consumptions in the domestic markets.

So from above we know the term investment. The savers become the investors in the
following term and invest in unique assets:

23
 Financial Assets
Cash , Bank Deposits
PF , LIC Schemes
Pension scheme,
Post office Certificates

Becomes PHYSICAL ASSETS:

Save Investor House, Land, Building, Flats
Gold, Silver and Other Metals
Consumer Durables

MARKETABLE ASSETS:
Shares, Bonds
Government securities
Mutual Fund
UTI units etc.

Stock & Capital Market

New Issues Stock Market

24
  CHARACTERISICS OF INVESTMENT

Certain features characterize all investments. The following are the main characteristics
features if investments: -

1.Return: -
All investments are characterized by the expectation of a return. In fact, investments are
made with the primary objective of deriving a return. The return may be received in the
form of yield plus capital appreciation. The difference between the sale price & the
purchase price is capital appreciation. The dividend or interest received from the
investment is the yield. Different types of investments promise different rates of return.
The return from an investment depends upon the nature of investment, the maturity
period & a host of other factors.

2.Risk: -
Risk is inherent in any investment. The risk may relate to loss of capital, delay in
repayment of capital, nonpayment of interest, or variability of returns. While some
investments like government securities & bank deposits are almost risk less, others are
more risky. The risk of an investment depends on the following factors.
The longer the maturity period, the longer is the risk.
The lower the credit worthiness of the borrower, the higher is the risk.
The risk varies with the nature of investment. Investments in ownership securities like
equity share carry higher risk compared to investments in debt instrument like debentures
& bonds.

25
3. Safety: -
The safety of an investment implies the certainty of return of capital without loss of
money or time. Safety is another features which an investors desire for his investments.
Every investor expects to get back his capital on maturity without loss & without delay.

4. Liquidity: -

An investment, which is easily saleable, or marketable without loss of money & without
loss of time is said to possess liquidity. Some investments like company deposits, bank
deposits, P.O. deposits, NSC, NSS etc. are not marketable. Some investment instrument
like preference shares & debentures are marketable, but there are no buyers in many
cases & hence their liquidity is negligible. Equity shares of companies listed on stock
exchanges are easily marketable through the stock exchanges.
An investor generally prefers liquidity for his investment, safety of his funds, a good
return with minimum risk or minimization of risk & maximization of return.

26
  IMPORTANCE

In the current situation, investment is becomes necessary for everyone & it is important
& useful in the following ways:

1. Retirement planning: -

Investment decision has become significant as people retire between the ages of 55 & 60.
Also, the trend shows longer life expectancy. The earning from employment should,
therefore, be calculated in such a manner that a portion should be put away as a savings.
Savings by themselves do not increase wealth; these must be invested in such a way that
the principal & income will be adequate for a greater number of retirement years.
Increase in working population, proper planning for life span & longevity have ensured
the need for balanced investments.

2. Increasing rates of taxation: -

Taxation is one of the crucial factors in any country, which introduce an element of
compulsion, in a person’s saving. In the form investments, there are various forms of
saving outlets in our country, which help in bringing down the tax level by offering
deductions in personal income.
For examples: -
a. Unit linked insurance plan,
b. Life insurance,
c. National saving certificates,
d. Development bonds,
27
 e. Post office cumulative deposit schemes etc.

3. Rates of interest: -

It is also an important aspect for sound investment plan. It varies between investment &
another. This may vary between risky & safe investment, they may also differ due
different benefits schemes offered by the investments. These aspects must be considered
before actually investing. The investor has to include in his portfolio several kinds of
investments stability of interest is as important as receiving high rate of interest.

4. Inflation: -

Since the last decade, now a day’s inflation becomes a continuous problem. In these
years of rising prices, several problems are associated coupled with a falling standard of
living. Before funds are invested, erosion of the resource will have to be carefully
considered in order to make the right choice of investments. The investor will try &
search outlets, which gives him a high rate of return in form of interest to cover any
decrease due to inflation. He will also have to judge whether the interest or return will be
continuous or there is a likelihood of irregularity. Coupled with high rate of interest, he
will have to find an outlet, which will ensure safety of principal. Beside high rate of
interest & safety of principal an investor also has to always bear in mind the taxation
angle, the interest earned through investment should not unduly increase his taxation
burden otherwise; the benefit derived from interest will be compensated by an increase in
taxation.

28
For maintaining purchasing power stability, investors should carefully plan and
invest their funds by making analysis.
a. The rate of expected return and inflation rate.
b. The possibilities of expected gain or loss on their investment.
c. The limitation imposed by personal and family considerations.

5. Income: -

For increasing in employment opportunities in India., investment decisions have assumed

importance. After independence with the stage of development in the country a number
of organization & services came into being.

For example: -
The Indian administrative services, Banking recruitment services, Expansion in private
corporate sector, Public sector enterprises,
Establishing of financial institutions, tourism, hotels, and education
More avenues for investment have led to the ability & willingness of working people to
save & invest their funds.

6. Investment channels: -

The growth & development of country leading to greater economic activity has led to the
introduction of a vast array of investment outlays. Apart from putting aside saving in
savings banks where interest is low, investor have the choice of a variety of instruments.
The question to reason out is which is the most suitable channel? Which media will give
a balanced growth & stability of return? The investor in his choice of investment will
29
give a balanced growth & stability of return? The investor in his choice of investment
will have try & achieve a proper mix between high rates of return to reap the benefits of
both.

For example: -
Fixed deposit in corporate sector
Unit trust schemes.

 INVESTMENTS AVENUES:-

There are various investments avenues provided by a country to its people depending
upon the development of the country itself. The developed countries like the USA and
the Japan provide variety of investments as compared to our country. In India before the
post liberalization era there were limited investments avenues available to the people in
which they could invest. With the opening up of the economy the number of investments
avenues have also increased and the quality of the investments have also improved due to
the use of the professional activity of the players involved in this segment. Today
investment is no longer a process of trial and error and it has become a systematized
process, which involves the use of the professional investment solution provider to play a
greater role in the investment process.

Earlier the investments were made without any analysis as the complexity involved the
investment process were not there and also there was no availability of variety of
instruments. But today as the number of investment options have increased and with the
variety of investments options available the investor has to take decision according to his
own risk and return analysis.

30
An investor has a wide array of Investment Avenue. They are as under:

Investment

Equity Fixed Income

Mutual Fund Deposits

Life Insurance
Tax Sheltered

Real Estate
Precious objects

Financial Derivatives

31
 1. TYPES OF EQUITY INSTRUMENTS :

 Ordinary Shares
Ordinary shareholders are the owners of a company, and each share entitles the holder to
ownership privileges such as dividends declared by the company and voting rights at
meetings. Losses as well as profits are shared by the equity shareholders. Without any
guaranteed income or security, equity shares are a risk investment, bringing with them
the potential for capital appreciation in return for the additional risk that the investor
undertakes in comparison to debt instruments with guaranteed income.

 Preference Shares
Unlike equity shares, preference shares entitle the holder to dividends at fixed rates
subject to availability of profits after tax. If preference shares are cumulative, unpaid
dividends for years of inadequate profits are paid in subsequent years. Preference shares
do not entitle the holder to ownership privileges such as voting rights at meetings.

 Equity Warrants
These are long term rights that offer holders the right to purchase equity shares in a
company at a fixed price (usually higher than the current market price) within a specified
period. Warrants are in the nature of options on stocks.

32
  Classification in terms of Market Capitalization

Market capitalisation is equivalent to the current value of a company i.e. current market
price per share times the number of outstanding shares. There are Large Capitalisation
companies, Mid-Cap companies and Small-Cap companies. Different schemes of a fund
may define their fund objective as a preference for Large or Mid or Small-Cap
companies' shares. Large Cap shares are more liquid and hence easily tradable. Mid or
Small Cap shares may be thought of as having greater growth potential. The stock
markets generally have different indices available to track these different classes of
shares.

 Classification in terms of Anticipated Earnings

Industries may have lower P/E ratios. The P/E analysis is sometimes supplemented with
ratios such as Market Price to Book Value and Market Price to Cash Flow per share.

 Dividend Yield for a stock is the ratio of dividend paid per share to current In
terms of the anticipated earnings of the companies, shares are generally classified on
the basis of their market price in relation to one of the following measures:

 Price/Earnings Ratio is the price of a share divided by the earnings per share, and
indicates what the investors are willing to pay for the company's earning potential.
Young and/or fast growing companies usually have high P/E ratios. Established
companies in mature market price. Low P/E stocks usually have high dividend yields. In
India, at least in the past, investors have indicated a preference for the high dividend

33
paying shares.
 Based on companies' anticipated earnings and in the light of the investment
management experience the world over, stocks are classified in the following groups:

 Cyclical Stocks are shares of companies whose earnings are correlated with the
state of the economy. Their earnings (and therefore, their share prices) tend to go up
during upward economic cycles and vice versa. Cement or Aluminium producers fall
into this category, just as an example. These companies may command relatively lower
P/E ratios, and have higher dividend pay-outs.

 Growth Stocks are shares of companies whose earnings are expected to increase
at rates that exceed normal market levels. They tend to reinvest earnings and usually
have high P/E ratios and low dividend yields. Software or information technology
company shares are an example of this type. Fund managers try to identify the sectors or
companies that have a high growth potential.

 Value Stocks are shares of companies in mature industries and are expected to
yield low growth in earnings. These companies may, however, have assets whose values
have not been recognised by investors in general. Fund managers try to identify such
currently under-valued stocks that in their opinion can yield superior returns later. A
cement company with a lot of real estate and a company with good brand names are
examples of potential value shares.

34
 2. FIXED INCOME SECURITIES

 Many instruments give regular income. Debt instruments may be secured by the
assets of the borrowers as generally in case of Corporate Debentures, or be unsecured as
is the case with Indian Financial Institution Bonds.

 A debt security is issued by a borrower and is often known by the issuer category,
thus giving us Government Securities and Corporate Securities or FI bonds. Debt
instruments are also distinguished by their maturity profile. Thus, instruments issued
with short-term maturities, typically under one year, are classified as Money Market
Securities. Instruments carrying longer than one-year maturities are generally called Debt
Securities.

 Most debt securities are interest-bearing. However, there are securities that are
discounted securities or zero-coupon bonds that do not pay regular interest at intervals
but are bought at a discount to their face value. A large part of the interest-bearing
securities are generally Fixed Income-paying, while there are also securities that pay
interest on a Floating Rate basis.

35
  A Review of the Indian Debt Market

 The Wholesale Debt Market segment deals in fixed income securities and is fast
gaining ground in an environment that has largely focused on equities.

The Wholesale Debt Market (WDM) segment of the Exchange commenced operations
on June 30, 1994. This provided the first formal screen-based trading facility for the debt
market in the country.
This segment provides trading facilities for a variety of debt instruments including
Government Securities, Treasury Bills and Bonds issued by Public Sector Undertakings/
Corporates/ Banks like Floating Rate Bonds, Zero Coupon Bonds, Commercial Papers,
Certificate of Deposits, Corporate Debentures, State Government loans, SLR and Non-
SLR Bonds issued by Financial Institutions, Units of Mutual Funds and Securitized debt
by banks, financial institutions, corporate bodies, trusts and others.
Large investors and a high average trade value characterize this segment. Till recently,
the market was purely an informal market with most of the trades directly negotiated and
struck between various participants. The commencement of this segment by NSE has
brought about transparency and efficiency to the debt market, along with effective
monitoring and surveillance to the market.

36
  Instruments in the Indian Debt Market

 Certificate of Deposit

Certificates of Deposit (CD) are issued by scheduled commercial banks excluding

regional rural banks. These are unsecured negotiable promissory notes. Bank CDs have a
maturity period of 91 days to one year, while those issued by FIs have maturities
between one and three years.

 Commercial Paper

Commercial paper (CP) is a short term, unsecured instrument issued by corporate bodies
(public & private) to meet short-term working capital requirements. Maturity varies
between 3 months and 1 year. This instrument can be issued to individuals, banks,
companies and other corporate bodies registered or incorporated in India. CPs can be
issued to NRIs on non-repatriable and non-transferable basis.

 Corporate Debentures

The debentures are usually issued by manufacturing companies with physical assets, as
secured instruments, in the form of certificates They are assigned a credit rating by rating
agencies. Trading in debentures is generally based on the current yield and market values
are based on yield-to-maturity. All publicly issued debentures are listed on exchanges.

37
 Floating Rate Bonds (FRB)

These are short to medium term interest bearing instruments issued by financial
intermediaries and corporates. The typical maturity of these bonds is 3 to 5 years. FRBs
issued by financial institutions are generally unsecured while those from private
corporates are secured. The FRBs are pegged to different reference rates such as T-bills
or bank deposit rates. The FRBs issued by the Government of India are in the form of
Stock Certificates or issued by credit to SGL accounts maintained by the RBI.

 Government Securities

These are medium to long term interest-bearing obligations issued through the RBI by
the Government of India and state governments. The RBI decides the cut-off coupon on
the basis of bids received during auctions. There are issues where the rate is pre-specified
and the investor only bids for the quantity. In most cases the coupon is paid semi-
annually with bullet redemption features.

 Treasury Bills

T-bills are short-term obligations issued through the RBI by the Government of India at a
discount. The RBI issues T-bills for different tenures: now 91 -days and 364-days. These
treasury bills are issued through an auction procedure. The yield is determined on the
basis of bids tendered and accepted.

38
 Bank/FI Bonds

Most of the institutional bonds are in the form of promissory notes transferable by
endorsement and delivery. These are negotiable certificates, issued by the Financial
Institutions such as the IDBI/ICICI/ IFCI or by commercial banks. These instruments
have been issued both as regular income bonds and as discounted long-term instruments
(deep discount bonds).

 Public Sector Undertakings (PSU) Bonds

PSU Bonds are medium and long term obligations issued by public sector companies in
which the government share holding is generally greater than 51%. Some PSU bonds
carry tax exemptions. The minimum maturity is 5 years for taxable bonds and 7 years for
tax-free bonds. PSU bonds are generally not guaranteed by the government and are in the
form of promissory notes transferable by endorsement and delivery. PSU bonds in
electronic form (demat) are eligible for repo transactions.

3. MUTUAL FUND SCHEMES

An investor can participant in various schemes floated by mutual fund instead of buying
equity shares. In mutual funds invest in equity shares & fixed income securities. There
are three broad types of mutual fund schemes.

39
 Growth schemes
 Income schemes
 Balanced schemes
4. DEPOSITS

It is just like fixed income securities earn a fixed return. However, unlike fixed income
securities, deposits are negotiable or transferable. The important types of deposits in
India are:

 Bank deposits
 Company deposits
 Postal deposits.

5. TAX-SHELTERED SAVING SCHEMES

It provides benefits to those who participate in them. The most important tax sheltered
saving schemes in India is:
 Employee provident fund scheme
 Public provident fund schemes
 National saving certificate

40
 6. LIFE INSURANCE

In a broad sense, life insurance may be viewed as an investment. Insurance premiums

represent the sacrifice & the assured sum the benefit. In India, the important types of
insurance polices are:
 Endowment assurance policy
 Money back policy
 Whole life policy
 Premium back term assurance policy

7. REAL ESTATE

For the bilk of the investors the most important asset in their portfolio is a residential
house. In addition to a residential house, the more affluent investors are likely to be
interested in the following types of real estate:
 Agricultural land
 Semi-urban land

8. PRECIOUS OBJECTS

It is highly valuable in monetary terms but generally they are small in size. The
41
 important precious objects are:

 Gold & silver

 Precious stones
 Art objects

9. FINANCIAL DERIVATIVES

A financial derivative is an instrument whose value is derived from the value of

underlying asset. It may be viewed as a side bet on the asset. The most import financial
derivatives from the point of view of investors are:
 Options
 Futures.

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 CHAPTER: 3

THEORETICAL CONCEPT

3.1 EQUITY SHARES

3.2 FUNDAMENTAL ANALYSIS
3.3 TECHNICAL ANALYSIS

43
 3.1 EQUITY SHARES
Equity represents an ownership position in a corporation. It is residual claim in the
sense that creditors and preference shareholders must be paid as scheduled before
equity shareholders can receive payment. In bankruptcy equity holders are
principle entitled only to assets remaining after all prior claimants has been
satisfied. Thus risk is highest with equity shares and so must be its expected return.
When investors buy equity shares, they receive certificates of ownership as proof
of their being part owners of the company. The certificate states the number of
shares purchased and their par value. The attitude towards equity shares varied
from extreme pessimism to optimism from time to time.
The main advantages of equity shares are listed below:
• Potential for Profit: The potential for profit is greater in equity shares than in

any other investment security. Current dividends yield may be low but potential
of capital gains is great. The total yield or yields to maturity may be substantial
over a period of time.

• Limited Liability: In corporate form of organization, its owners have,

generally, limited liability. Equity shares is usually fully paid. Shareholders
may lose their investments, but no more. They are not further liable for any
failure in the part of corporation of meet its obligation.

• Hedge against Inflation: The equity share is good hedge against inflation
though it does not fully compensate for the declining purchasing power as it is

44
 subject to money-rate risk. But when interest rates are high, shares tend to be
less attractive, and prices tend to be depressed.

• Share in Growth: The major advantage of investment in equity shares is its

ability to increase in value by sharing in the growth of company profits over the
long run.

• Tax Advantage: Equity shares also offers tax advantage to the investors. The
larger yield on equity shares results from an increase in principal of capital
gains, which are taxed at lower rate than other incomes in most of the countries.

EQUITY CAPITAL TERMINOLOGY:

The important terms used in equity capital are listed below:
• Authorized Capital: The authorized capital is the maximum number of

shares of each type that may be issued by the company. To change this
number, or provision of any class of shares, the company requires the formal
approval of shareholders.

• Issued Capital: Issued capital is the part of the authorized capital that has
been issued for cash, property, or service.

• Paid up Capital: Fully paid shares are those shares for which the
corporation has received full payment up to the par-value, or up to the
amount established as the selling price of no-par-shares. Partly paid shares
are those shares that have been issued for less than par-value or the agreed
subscription.

NATURE OF EQUITY SHARES:

Equity shares represent an ownership of a corporation. It is true that the equity
shares must bear first impact of any adversity, but it is also true that the equity

45
shares is the only class of securities privileged to enjoy maximum participation in
an extensive growth of the company. The risk of the one may be regarded as
commensurate with the opportunity of the other. There is nothing certain about
earnings on equity shares, and the investor can lose as well as earn a profit.
• Evidence of Ownership: When investor buys equity shares, they receive
certificates of ownership as a proof of their part as owners of the company.
This certificates state the number of shares purchased, their par value, if any,
and usually the transfer agent. When equity shares are purchased on the
market (that when it is not a new issue which is purchased from the
company), the new owner and the number of shares bought are noted in the
record book of the transfer agent.

• Maturity of Equity Shares: Equity shares have no maturity date. Their life
is limited by the length of time stated in the corporate charter know as
“Memorandum of Association”. The corporate life might be for stated or
limited period, or it might be perpetual. Most corporations have a perpetual
character. For investment purpose, equity shares can be purchased and sold
at any time.The date on which the equity is sold by the investor is the
maturity date, and the price at which the equity is sold is called the maturity
price. In fact, the investor is vitally concerned with the yield earned over the
period that the equity is owned, since the yield for the holding period
represents the total earnings to the investor and is a measure of performance
to be compared to those of other securities investments.

• Par Value: Par value is the face value of the share. Equity shares have par
value, a nominal stated value. The par value of an equity shares indicates the
amount of capital originally subscribed by the shareholders. New shares

46
 cannot be sold less than par value. If the equity shares are sold for more than
par, the excess is transferred to ‘Share Premium Account’.

• Net Asset Value and Book Value: Distrust of present value formulae, the
quest for objectivity and perhaps even nostalgia lead some analyst to place
greater emphasis on the asset value factor when evaluating investment worth
of a company’s equity shares. Net assets or net worth can be calculated from
either the asset of liability side of balance sheet.

On the other hand, what if the price of the equity is significantly below book
value; dose it then represent under priced. The estimate of net assets per
shares reflects the accounting conventions used in drawing up the balance
sheet and the accounting practice deviates significantly from economic
theory.

• Financial Analysis and Accounting Data: The historical numbers that

analyst uses to prepare rates and forecasting equations are generally based
on figures that have been taken from the published financial statements of
the firm being analyzed. Although these statements may have been prepared
“according to generally accept accounting principles”, there may be
significant variation in real economic meaning of financial reports.

47
INVESTMENT PROCESS IN EQUITY SHARES:
Investment process describes how an investor should go about making decisions
with regard to what marketable securities to invest in, how extensive the
investment should be and when the investment should be made. An eight-step
procedure for making these decisions forms the basis for the investment process.

1. What is Investment

2. Understanding Shares

3. Finding a Broker

4. Evaluation of Shares

5. Research Tools

6. Investing Strategy

7. Investing Technique

8. What Moves the Market

Step 1: What is Investment?

Investing is making your money work for you without taking any
more risks than necessary for your comfort.
• Investing is the proactive use of your money to make more money.

• How to calculate Risk Premium?

48
 Risk premium is what a stock should return over a “risk-free” investment. It
is your reward for taking a risk with your money.
• Weak demand is the important factor in stock pricing:

Despite high crude oil prices, its weak demand for gasoline that holds back
oil stock prices. Supply and demand is an important factor in determining
price of stocks.
• Corrections are natural part of stock market cycle.

• Don’t be too conservative with stocks in retirement:

There is a danger you can be too conservative in your investment strategy as

you approach retirement – don’t back off stocks too soon.

Step 2: Understanding Shares

• Bull and Bear stock market are the two sides of same coin:

Bull and bear markets go together and are necessary for an efficient
market.
• Poll results show confidence in stocks:

The results of a poll on where the sensex be at the end of 2009 show
stock investors are positive.

Step 3: Finding a Broker

• To decide which type of broker is right for you, you need to use these
resources to find the brokerage arrangement that best fits your needs.

• Thirteen of the top online stock trading sites offer investors a wide variety of
services including research and advice.
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• Brokers offer different levels of service. A broker fills in the gaps in
knowledge and experience.

• Broker explains what types of accounts are available and how to open an
account.

• Financial advisers can map a blue print that will get you from where you are
to your financial goals.

• Financial advisers come in a variety of flavors. Finding the one right for you
involve knowing how each is compensated and what they do.

• The New Year poses many challenges for stocks, including high oil prices,
the credit crisis, and a potential recession.

• Stock prices are driven by the relationship between buyers and sellers.
Attractive stocks have more buyers than sellers, which drives up prices,
while less attractive stocks feel the reverse effect.

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Step 4: Evaluating Stocks for Investment
Fundamental analysis relies on several tools to give investors an accurate
picture of the financial health of a company and how the market values the stock.
The following are the most popular tools of fundamental analysis. They focus on
earnings, growth, and value in the market.
a) Earnings Per Share – EPS

b) Price to Earnings Ratio – P/E

c) Projected Earnings Growth – PEG

d) Price to Sales – P/S

e) Price to Book – P/B

f) Dividend Payout Ratio

g) Dividend Yield

h) Book Value

i) Return on Equity

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Step 5: Research Tools
The internet is a gold mine of information, but you’ll need some tools to get to the
nuggets. Research tools make the job easier if you know where to find them and
how to use them.
• The better stock screens offer similar characteristics that give you greater
flexibility when looking for investment candidates and eliminate other
companies.

• Stock screens will save time and help to build a thoughtful portfolio by
focusing on those companies that meet your investing requirements.

• Stock screens can help any investor make better stock selections by reducing
the number of companies to research.

• Dividend ratios can tell much about a stock and its future payout prospects.

• One of the best sources of information on companies is free and as near as

your computer.

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Step 6: Investing Strategies
What strategy to use as an investor? The different investment strategies and how to
develop personal investment strategy is explained below:
• When and how to sell a winning stock?

Knowing when and how to sell a winning stock is as important as knowing

when to sell a losing stock.
• Don’t be too conservative with stocks:

Following a too conservative investment strategy in retirement may not

protect you from outliving your money.
• Bottom-up investors focus on strong companies and believe they will
perform well in any market conditions.

• Top-down investing looks at big picture before narrowing in on individual

stocks.

Step 7: Investing Techniques

Investing techniques offer powerful ways for investors to execute their strategies.
These techniques provide a structure for investing.
• After-hours trading of stocks may seem like a great idea, but it is full of
risks for the average investor.

• Diversify stocks by industry to avoid across-the-board losses on bad

economic news. Investments should not be correlated to achieve diversity.

• Investing with expectations of high returns is not investing but gambling.

Don’t try to double or triple your money quickly in the stock market – you’ll
be disappointed and perhaps poorer.
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Step 8: What Moves the Market?
What makes the market rise or fall? Sometimes it seems to have a mind of its own
that reacts poorly to good news and with enthusiasm to bad news. One should
learn the factor that are the major influences on the markets and how to use this
information.

Major economic and political factors shape the market, but most of all the
market hates uncertainty.

EQUITY ANALYSIS

Equity valuation and analysis is done when problems faced with buying,
holding, or selling decisions are made. The analysis must be based on past
performance of the security and then coupled with personal experience, predicting
its future performance and relative market position. The Equity Analysis is based
upon two analysis they are

• Fundamental Analysis
• Technical Analysis

54
 3.2 FUNDAMENTAL ANALYSIS

It’s a logical and systematic approach to estimating the future dividends & share
price, as these two constitute the return from investing in shares. According to this
approach, the share price of a company is determined by the fundamental factors
affecting the Economy/Industry/Company such as Earnings Per Share, D/P ratio,
Competition, Market Share, Quality of Management etc. it calculates the true
worth of the share based on it’s present and future earning capacity and compares
it with the current market price to identify the miss-priced securities. Fundamental
Analysis helps to identify fundamentally strong companies, whose shares are
worthy to be included in the investor’s portfolio, by providing an analytical
framework, known as Economy Industry Company framework, for rational
investment decision making.

1. Economic Analysis:
Economic factors play major role in any investment decisional, which is made for
making a gain and better returns. Economic analysis and forecasting company
performance and of returns is necessary for making investments.
Any investment is risky and as such investment decision is difficult to make.
Investment decision is based on availability of money and information on the
economy.
Companies are a part of the industrial and business sector, which in return is a part
of overall economy. Thus the performance of a company depends recession or
stagnation, the performance of the companies will be bed in general, with sum
exceptions however, on the other hand, if the economy is booming, incomes are

55
raising and the demand is good, then the industries and the companies is general
may be prosperous, with some exceptions however.
In the Indian economy, the matters to be considered in the first place all the
behavior of the monsoon and the performance of agriculture. India has a mixed
economy, where the public sector plays a vital role. The government being the
biggest investor and spender, the trends in public investment and expenditure
would indicate the likely performance of the Indian economy. Concomitant with
this, the government budget policy, tone levies and government borrowing
program along with the extent of deficit financing will have a major influence on
the performance of the Indian economy. The monitory situation along with the
budgetary policy influences the movement in price inflation do have a major
influence on the economy.

The economy and political stability in the form of stable and long term economic
policies and a stable political with no uncertainty would also be necessary for a
good performance of the economy in general and of companies in particular.
All the above factor of the economy influences the corporate performance and the
industry in general.

2. Industry Analysis:
On the economic analysis is made and the forecast of the economy is known the
investor will then have some ides of the likely growth of the economy and its
trend. After that, the analyst would look into the industry groups that are promising
in the coming year or years and then only he will be able to choose the companies
in those industry groups.

At any point of time, there may be industries, which are on the up swing of the
cycle called sunshine industries and those, which are on the decline called sunset
industries. In India, there are some growth industries like electronics and Tele
56
communications, which are the key industries. The engineering, petrol chemicals
and capital goods industries are in the core sector. A few industries like diamonds,
engineering etc. are in the export sector. Jute and cotton textiles are the decedent
industries. At present, Tele communications, energy etc., are some examples of
sunrise industries.

The key characteristics that are to be considered in the analysis, which have a
bearing on the prospects of the company are: -
 Demand – Supply Gap.
 Competitive conditions in the industry.
 Permanence.
 Growth Rate of the Industry.
 Attitude of Government towards the industry.
 Labors Conditions.
 Supply of Raw Materials.
 Cost Structure.
 Past Sales & Earnings Performance.
 Growth Rate of the Industry etc.

The gap between Demand and Supply in an industry is a fairly good indicator of
its short-term or medium-term prospects. Excess supply reduces the profitability of
the industry through a decline in the unit-price realization. On the contrary,
insufficient supply tends to improve the profitability through higher unit-price
realization. In an industry where supply exceeds Demand and there are many
competing firms, the increased rivalry among the firms leads to price cuts and

57
heavy advertising. In such a situation, the companies lose their competitive edge
and their profitability gets erode.
In this age or rapid technological change, the important factor to be considered is
the permanence of an industry, which is related to the products and the technology
used by the industry. Another factor to be observed is the Cost structure of the
Industry i.e., the proportion of the fixed costs to the variable costs that determines
the level of Break-even point. The industry with lower break-even point is to be
given more importance.

3. Company Analysis:
Company Analysis is the final stage of the Fundamental Analysis, which is to be
done to decide the company in which the investor should invest. The Economy
Analysis provides the investor a broad out line of the prospects of growth in the
economy. The industry analysis helps the investor to select the industry in which
the investment would be rewarding. Company Analysis deals with the estimation
of the Risks and Returns associated with individual shares.
The stock price has been found on depend on the intrinsic value of the company’s
share to the extent of about 50% as per many research studies. Graharm and Dodd
in their book on “security analysis” have defined the intrinsic value as “that value
which is justified by the facts of assets, earnings and dividends”. These facts are
reflected in the earnings potentials of the company. The analyst has to project the
expected future earnings per share and discount them to the present time, which
gives the intrinsic value of the share. Another method to use is to take the
expected earnings per share and multiplying it by the industry average price
earning multiple.

By this method, let the analyst estimate the intrinsic value or fair value of share
and compare it with the market price to know whether the stock is over valued or

58
under valued. The investment decision is to buy under valued stock and sell over
valued stock.

3.1. Financial Analysis:

Share price depends partly on its intrinsic worth for which financial analysis for a
company is necessary to help the investor to decide whether to buy or not the
shares of the company. The soundness and intrinsic worth of a company is known
only by such analysis. An investor needs to know the performance of the
company, its intrinsic worth as indicated by some parameters like book value,
EPS, P/E multiple etc., and come to a conclusion whether the share is rightly
priced for purchase or not. This, in short is the importance of financial analysis of
a company to the investor.
Financial analysis is analysis of financial statement of a company to assess its
financial health and soundness of its management. “Financial statement analysis”
involves a study of the financial statement of the company to ascertain its
prevailing state of affairs and the reasons there of. Such a study would enable the
public and investors to ascertain whether one company is more profitable than the
other and also to state the cause and factors that are probably responsible for this.

3.1.1. Method or devices of Financial Analysis:

The term “Financial statement” is used in modern business refers to the balance
sheet, or the statement of financial position of the company at a point of time and
income and expenditure statement or the profit and loss statement over a period.
Interpret the financial statement; it is necessary to analyze them with the object of
formation of an opinion with respect to the financial condition of the company.
The following methods of analysis are generally used.
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 1. Comparative statement
2. Trend analysis
3. Common size statement
4. Fund flow analysis
5. Cash flow analysis
6. Ratio analysis

Fundamental Analysis has a very broad scope. One aspect looks at the general
(qualitative) factors of a company. The other side considers tangible and
measurable factors (quantitative). This means crunching and analyzing numbers
from the financial statements. If used in conjunction with other methods,
quantitative analysis can produce excellent results.
Ratio analysis isn't just comparing different numbers from the balance sheet,
income statement, and cash flow statement. It's comparing the number against
previous years, other companies, the industry, or even the economy in general.
Ratios look at the relationships between individual values and relate them to how a
company has performed in the past, and might perform in the future.
For example current assets alone don't tell us a whole lot, but when we divide them
by current liabilities we are able to determine whether the company has enough
money to cover short-term debts.

Efficient Market Hypothesis

This theory presupposes that the Stock Markets are so competitive and efficient in
processing all the available information about the securities that there is
“immediate price adjustment” to the changes in the economy, industry and

60
company. The Efficient Market Hypothesis model is actually concerned with the
speed with which information is incorporated into the security prices.

The Efficient Market Hypothesis has three Sub-hypothesis:

 Weakly Efficient: This form of Efficient Market Hypothesis states that the
current prices already fully reflect all the information contained in the past price
movements and any new price change is the result of a new piece of
information and is not related/independent of historical data. This form is a
direct repudiation of technical analysis.

 Semi-Strongly Efficient: This form of Efficient Market Hypothesis states that

the stock prices not only reflect all historical information but also reflect all
publicly available information about the company as soon as it is received. So,
it repudiates the fundamental analysis buy implying that there is no time gap for
the fundamental analyst in which he can trade for superior gains, as there is an
immediate price adjustment.

 Strongly Efficient: This form of Efficient Market Hypothesis states that using
both publicly available information as well as private or insider information
cannot beat the market.

But even though the Efficient Market Hypothesis repudiates both Fundamental and
Technical analysis, the market is efficient precisely because of the organized and
systematic efforts of thousands of analysts undertaking Fundamental and
Technical analysis. Thus, the paradox of Efficient Market Hypothesis is that both
the analyses are required to make the market efficient and thereby validate the
hypothesis.

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 3.3 TECHNICAL ANALYSIS

INTRODUCTION
There are two major types of analysis for predicting the performance of a
company's stock - fundamental and technical. The latter looks for peaks, bottoms,
trends, patterns, and other factors affecting a stock's price movement and then
making a buy/sell decision based on those factors. It is a technique many people
attempt, though very few are truly successful.
Today, the world of technical analysis is huge. There are literally hundreds
of different patterns and indicators investors claim to be successful. There are
different types of stock charts and the various technical analysis tools.

What is Technical Analysis?

Technical analysis is a method of evaluating securities by analyzing statistics
generated by market activity, past prices, and volume. Technical analysts do not
attempt to measure a security's intrinsic value; instead they look for patterns and
indicators on stock charts that will determine a stocks future performance.
Technical analysis has become popular over the past several years, as more and
more people believe that the historical performance of a stock is a strong
indication of future performance. The use of past performance should not come as
a big surprise. People using fundamental analysis have always looked at the past
performance by comparing fiscal data from previous quarters and years to
determine future growth. The difference lies in the technical analyst’s belief that

62
securities move with very predictable trends and patterns. These trends continue
until something happens to change the trend, and until this change occurs, price
levels are predictable.
Some technical analysts claim they can be extremely accurate a majority of the
time.
There are many instances of investors successfully trading securities with only the
knowledge of its chart and without even understanding what the company does.
Technical analysis is a terrific tool, but most agree that it is much more effective
when combined with fundamental analysis.
Let's now look at some of the major indicators technical analysts use.

The Bar Chart

Bar charts are some of the most popular type of
charts used in technical analysis. As illustrated
on the left, the top of the vertical line indicates
the highest price a security traded at during the
day, and the bottom represents the lowest
price. The closing price is displayed on the
right side of the bar and the opening price is
shown on the left side of the bar. A single bar
like the one to the left represents one day of
trading.

63
The advantage of using a bar chart over a straight-line graph is that it shows the
high, low, open and close for each particular day. This is the type of chart we will
be using to display various indicators throughout this explanation. There are two
more types of charts that are also frequently used for technical analysis that are
similar to the bar chart. The first we will look at is called "Candlestick Charting".

64
Candle Stick Charting
Candlestick charts have been around
for hundreds of years. They are often
referred to as "Japanese Candles"
because the Japanese would use
them to analyze the price of rice
contracts.

Similar to a bar chart, candlestick

charts also display the open, close,
daily high, and daily low. A
difference is the use of color to show
if the stock was up or down over the
day.

The chart below is an example of a candlestick chart for AT&T (T), green bars
indicate the stock price rose, red indicates a decline:

65
candlestick charts have a “love or leave” relationship with investors. People either
love candlesticks and use them frequently, or are completely turned off by them.
There are several patterns people look for with candlestick charts, here are a few of
the popular ones and what they mean:

This is a bullish pattern, the stock opened at (or near) its low and
closed near its high.

The opposite of the pattern above, this is a bearish pattern. This

indicates that the stock opened at (or near) its high and dropped
substantially to close near its low.

66
 Called "The Hammer", this is a bullish pattern only if it occurs
after the stock price has dropped for several days. A Hammer is
identified by a small body along with a large range. The theory is
that this pattern can indicate a reversal in the downtrend is in the
works.

Called a "star". This pattern is used in others such as the "doji star".
For the most part, stars typically indicate a reversal and or
indecision. There is the possibility that after seeing a star there will
be a reversal or change in the current trend.

Keep in mind there are over 20 other patterns used by technical analysts for
candlestick charting.
Now, let's take a look at a more traditional style of charting stock price
performancecalled "Point & Figure Charting.”

THE POINT & FIGURE CHART

This type of chart is somewhat rare, in fact most charting services do not even
offer the point and figure chart. This is a chart that plots day-to-day increases and
declines in price. A rising stack of X’s represents increases while a declining stack
of O’s represents decreases. These types of charts were traditionally used for intra-
day charting (a stock chart for just one day), mainly because it can be long and
tedious to create P&F charts over a longer period of time manually.

67
The idea behing P&F charts is that they help you to filter out less-significant price
movements and let you focus more on the most important trends. Below is an
example of a Point and Figure Chart for AT&T (T):

There are two attributes that affect the appearance of a Point & Figure chart, box
size and reversal amount. We won't get into much detail about these factors. Now
that we've taken a look at three different types of charts used by technical analysts,
let's look at various indicators.

68
Here are a couple points to remember about Technical Analysis:
 Technical Analysis is a method of evaluating securities by analyzing
statistics generated by market activity, past prices, and volume.

 The advantage of using a bar chart over a straight line graph is that it shows
the high, low, open and close for each particular day.

 One of the most basic and easy to use TA indicators is the moving average,
which shows the average value of a security’s price over a periodof time.
The most commonly used moving averages are the 20, 30, 50, 100, and 200
day.

 Support and resistance levels are price levels at which movement should
stop and reverse direction. Think of Support/Resistance (S/R) as levels that
act as a floor or a ceiling to future price movements.

 There are literally 100s of different price patterns and indicators.

Evaluation of Technical Analysis

Technical Analysis appears to be a highly controversial approach to security
analysis. It has its ardent votaries; it has its severe critics. The advocates of
technical analysis offer the following interrelated arguments in support of their
position.
1. Under the influence of crowd psychology, trends persist for quite some time.
Tools of technical analysis that help in identifying these trends early are
helpful aids in investment decision making.

69
 2. Shifts in demand and supply are gradual rather than instantaneous.
Technical Analysis helps in detecting these shifts rather early and hence
provides clues to future price movements.

3. Fundamental information about a company is absorbed and assimilated by

the market over a period of time. Hence, the price movement tends to
continue in more or less the same direction till the information is fully
assimilated in the stock price.

4. Charts provide a picture of what has happened in the past and hence give a
sense of volatility that can be expected from the stock. Further, the
information on trading volume which is ordinarily provided at the bottom of
a bar chart gives a fair idea of the extent of public interest in the stock.

The detractors of technical analysis believe that technical analysis is a useless

exercise. Their arguments run as follows:
1. Most technical analysts are not able to offer convincing explanations for the
tools employed by them.

2. Empirical evidence in support of the random-walk hypothesis casts its

shadow over the usefulness of technical analysis.

3. By the time an uptrend or downtrend may have been signaled by technical

analysis, it may already have taken place.

4. Ultimately, technical analysis must be a self-defeating proposition. As more

and more people enjoy it, the value of such analysis tends to decline.

5. The numerous claims that have been made for different chart patterns are
simply untested assertions.

70
There is a great deal of ambiguity in the identification of configurations as well as
trend lines and channels on the charts. The same chart can be interpreted
differently.

What is the difference between Fundamental and Technical Analysis?

These terms refer to two different stock-picking methodologies used for
researching and forecasting the future growth trends of stocks. Like anyinvestment
strategy or philosophy, both have their advocates and adversaries. Here are the
defining principles of each of these methods of stock analysis:
• Fundamental Analysis is a method of evaluating securities by attempting to
measure the intrinsic value of a stock. Fundamental Analysis study
everything from the overall economy and industry conditions to the financial
condition and management of companies.

• Technical Analysis is the evaluation of securities by means of studying

statistics generated by market activity, such as past prices and volume.
Technical Analysis do not attempt to measure a security’s intrinsic value but
instead use stock charts to identify patterns and trendsthat may suggest what
a stock will do in the future.

In the world of stock analysis, Fundamental and Technical Analysis is on

completely opposite sides of the spectrum. Earnings, expenses, assets and
liabilities are all important characteristics to fundamental analysts, whereas
technical analysts could not care less about these numbers. Which strategy works
best is always debated, and many volumes of textbooks have been written on both
of these methods. So, do some reading and decide for yourself which strategy
works best with your investment philosophy.

71
DATA ANALYSIS

72
 About ULTRATECH

Company UltraTech Cement Limited

NSE Symbol ULTRACEMCO
Website www.ultratechcement.com

Sharepro Services (India) Private Ltd.

13AB, Samhita Warehousing Complex,
Address Sakinaka Telephone Exchange Lane,
Transfer Off AndheriKurla Road, Sakinaka, Andheri (East)
Agent Mumbai - 400072
Telephone 022-67720300 / 677200400
Fax 022-28591568 / 28508927
Email sharepro@vsnl.com, utcl@shareproservices.com
B-Wing, Ahura Centre,
2nd floor, Mahakali Caves Road,
Address
Andheri (East),
Registered Mumbai - 400093
Address Telephone 022-66917800/26571416/56917360/98204-59383
Fax 022-66928109/56917362
sharesutcl@adityabirla.com/ ps-
Email
acc@metro.ltindia.com/sanjeeb.chatterjee@adityabirla.com

ULTRATECH CEMENT Ltd

YEAR SALES PROFITABILITY

AMT(Rs) Trend% AMT(Rs) Trend%
2006 3,785.29 100 229.76 100
2007 5,484.25 144.88 782.28 340.4
2008 6,286.24 166 1,007.61 438.5
2009 7,160.42 189.16
73 977.02 425.23
2010 7,729.13 204.18 1,093.24 475.8
 Trend Analysis

Interpretation: - The above table & graph show the sales & profitability trend for
5yrs company takes position in sales & profitability when compared to the other
company’s in the industry in current FY2010. The company's performance is good
because from 2006 to till 2010 it showed increase only.

About ACC

Company ACC Limited

NSE Symbol ACC
Website www.acclimited.com
74
 Share Department,
Cement House,
Address
121, MaharshiKarve Road,
Mumbai - 400020
Transfer
Telephone 022-66654291,66654304,66654469,66654473
Agent
Fax 022-66317458
jer.dhondy@acclimited.com,
Email krishnan.chidambaram@acclimited.com,
sujata.chitra@acclimited.com
Cement House,
Address 121, MaharshiKarve Road,
Mumbai - 400020
Registered Telephone 022-66654401, 66654469, 66654473
Address Fax 022-66317458
sunil.nayak@acclimited.com,
Email jer.dhondy@acclimited.com,
investorsupport@acclimited.com

75
 ACC Ltd.

Sales Profitability
Year
Amount % Amount %
2005 3717.18 100 544.18 100
2006 6453.07 173.6 1231.84 226.366
2007 7848.32 211.13 1438.59 264.35
2008 8234.02 221.5 1212.79 222.86
2009 8724.24 234.7 1606.73 295.25

76
Interpretation: - The above table & graph show the sales & profitability trend for 5yrs
company takes position in sales & profitability when compared to the other company’s in the
industry in current FY2009. The company's performance is good compare to last year

About TATA STEEL

Company Tata Steel Limited

NSE Symbol TATASTEEL
Website www.tatasteel.com

Transfer Agent TSR Darashaw Ltd

6-10, Haji MoosaPatrawalal Industrial
Estate
Address
20, Dr. E Moses Road
Mahalaxmi
Mumbai – 400011
Telephone 022-66568484
Fax 022-66568494 / 96

77
 Email csg-unit@tsrdarashaw.com
Bombay House,
24, HomiMody Street,
Address
Fort,
Registered Mumbai – 400001
Address
Telephone 022-66658282
Fax 022-66657725/24
Email cosectisco@tata.com
Central Admin. Office
Address
Jamshedpur – 831001
Corporate Office Telephone 0657-2425683
Fax 0657--
Email cosectisco@tata.com

TATA Steel

Sales Profitability
Year
Amount % Amount %
17140.2
2006 4 100 3506.38 100
19762.5 115.29
2007 7 9 4222.15 120.41
22189.5
2008 5 129.45 4687.03 133.67
26843.7
2009 3 156.61 5201.74 148.35
2010 26757.8 151.11 5046.8 143.93

78
Interpretation: - The above table & graph show the sales & profitability trend for
5yrs company takes position in sales & profitability when compared to the other
company’sin the industry in current FY2010 The company's performance is good
because from 2006 to till 2010 it showed increase only.

JINDAL STEEL AND POWER

Company Jindal Steel & Power Limited

NSE Symbol JINDALSTEL
Website www.jindalsteelpower.com

79
 Transfer Agent
Alankit
Assignments
Ltd
Alankit House,
2E/21
JhandelwalanE
Address xtn,
New Delhi –
110055
Telephone 011-23541234
Fax 011-51540064
Email alankit@alankit.com
O. P. Jindal Marg,
Address Hisar
Haryana - 125005
Registered Address
Telephone 01662-222471-83
Fax 01662-222476
Email jslhsr@jindalsteel.com
Jindal Centre
12 BhikaijiCama Place
Address
New Delhi - 110066
Corporate Office New Delhi
Telephone 011-26188340-50
Fax 011-26161271
Email marketing@jindalsteel.com

Jindal Steel and Power

Sales Profitability
Year
Amount % Amount %

2006 2877.46 100 572.94 100

80
 2007 9899.81 344.04 702.99 122.69
2008 6115.27 212.52 1236.96 215.89
2009 8450.86 293.68 1536.48 268.17
2010 7887.62 274.11 1479.68 258.26

400
350
300
250
200 SALES
150 PROFIT
100
50
0
2006 2007 2008 2009 2010

Interpretation: - The above table & graph show the sales & profitability trend for
5yrs company takes position in sales & profitability when compared to the other
companies in the industry in current FY2010The company's performance is good
because from 2006 to till 2010 it showed increase only.

Calculation of Percentages

Sales 2006 2007 2008 2009 2010

Ultratech 3785 5484 6286 7160 7729
Acc Ltd 3717 6453 7848 8234 8724
Tata 17140 19762 22189 26843 26757
Jiindal 2877 9899 6115 8450 7887

% Increase in sales:
81
 Sales % 2006 2007 2008 2009 2010
Ultratech - 44.88 14.62 13.90 7.94
Acc Ltd - 73.60 23.62 4.92 5.95
Tata - 15.29 12.28 20.97 0.32
Jindal - 244 38.22 38.18 --6.66

Profit 2006 2007 2008 2009 2010

Ultratech 229 782 1007 977 1093
Acc Ltd 544 1231 1438 1212 1606
Tata 3506 4222 4687 5201 5046
Jindal 572 702 1236 1536 1479

% Increase in profit:

Profit % 2006 2007 2008 2009 2010

Ultratech - 241.48% 28.77% -2.98% 11.87%
-
Acc Ltd - 126.29% 16.82% 15.72% 32.50%
Tata - 20.42% 11.01% 10.97% -2.98%
Jindal - 22.73 76.07 24.27 -3.71

Capital
Work in 2006 2007 2008 2009 2010
Progress
Ultratech 141 696 2283 677 259
Acc Ltd 215 558 649 1602 2156
Tata 1157 2497 4367 3487 3843
Jindal 1146 937 660 2318 6435

% increase in capital work in progress:

% 2006 2007 2008 2009 2010

increase
in
capital
work in

82
 progress
Ultratech - 393.6 228 -70.34 -61.74
Acc Ltd - 159.53 16.30 146.84 34.58
Tata - 115.81 74.88 -20.15 10.22
Jindal - -18.23 -29.56 251.12 177.61

Profit before
Depreciation & 2006 2007 2008 2009 2010
Tax
Ultratech 501.55 1392.22 1744.06 1684 1975.74
Acc Ltd 848 1873 2235 2030 2636
Tata 6015 7080 7900 8239 8297
Jindal 946 1281 1953 2434 2419

% OF INCREASE IN PBDT:

% OF
INCREASE 2006 2007 2008 2009 2010
IN PBDT
Ultratech - 177.84 25.28 -3.44 17.28
Acc Ltd - 120.87 19.32 -9.172 29.85
Tata - 17.70 11.58 4.29 0.70
Jindal - 35.41 52.45 24.62 -0.616

Earning
Per
2006 2007 2008 2009 2010
Share
(Rs.)
Ultra-tech 18.22 62.28 80.09 77.63 86.82
Acc Ltd 37.79 63.60 73.20 61.16 81.59
Tata 61.51 69.95 61.06 66.75 54.94
Jindal 183.92 225.36 79.64 99.32 15.84

83
% OF INCREASE IN EPS:

% OF
INCREASE 2006 2007 2008 2009 2010
IN EPS
Ultratech - 241.82 28.59 -3.07 11.83
Acc Ltd - 68.30 15.09 16.45 33.40
Tata - 13.72 -12.71 9.32 -17.69
Jindal - 22.53 -64.66 24.71 -84.05

SUNDRY
DEBTORS 2006 2007 2008 2009 2010
Ultratech 172.55 183.50 216.61 186.18 215.83
Acc Ltd 199.17 213.96 289.29 310.17 303.70
Tata 539.40 631.63 543.48 635.98 434.83
Jindal 299.54 320.31 287.38 391.46 622.36

% INCREASE IN SUNDRY DEBTORS:

%
INCREASE
IN 2006 2007 2008 2009 2010
SUNDRY
DEBTORS
Ultratech - 6.35 18.04 -14.05 15.59
Acc Ltd - 7.43 35.21 7.22 -2.25
Tata - 17.10 -13.96 17.02 -31.65
Jindal - 6.93 -10.28 36.22 59.07

ASSETS 2006 2007 2008 2009 2010

84
 Ultratech 2490 3342 4436 5742 6211
Acc Ltd 3312 4058 4459 5409 6583
Tata 12271 23741 45328 57122 62201
Jindal 4585 5986 7588 10377 15129

% INCREASE IN ASSETS:

%
INCREASE
2006 2007 2008 2009 2010
IN
ASSETS
Ultratech - 34.23% 32.74% 29.42 8.16
Acc Ltd - 22.54% 9.87% 21.32 21.70
Tata - 102.85% 164.83% 26.02 8.89
Jindal - 19.27% 47.17% 36.40 45.79

LIABILITIES 2006 2007 2008 2009 2010

Ultratech 2490.1 3342.41 4436.72 5742.05 6211
Acc Ltd 3312.1 4058.62 4459.02 5409.76 6583
Tata 12271.45 23741.49 45328.07 57122.68 62209
4585.0 5986.1 7588.6 10350.
Jindal 3 3 1 8 15129

% INCREASE IN LIABILTIES:

%
INCREASE
2006 2007 2008 2009 2010
IN
LIABILTIES
Ultratech - 34.23% 32.74% 29.42% 8.167
Acc Ltd - 22.54% 9.87% 21.32% 21.70
Tata - 93.47% 90.92% 26.02% 9.905
Jindal - 30.56% 26.77% 36.40% 46.173

85
 SECURE
2006 2007 2008 2009 2010
D LOANS
Ultratech 1221.93 1151.25 982.66 1175 854
Acc Ltd 950.12 720.96 266.03 450 550
Tata 2191.74 3758.92 3520.58 3913 2259
1780.7 2115.6 1783.3
Jindal 7 1 9 2105 4235

% INCREASE IN SECURED LOANS:

%
INCREASE
IN 2006 2007 2008 2009 2010
SECURED
LOANS
Ultratech - -5.78% -14.64% 19.65% -13.0%
Acc Ltd - -24.12% -63.10% 69.15% 22.22%
Tata - 71.50% -6.34% 11.15% -42.26%
Jindal - 18.80% -15.70% 18.06% 101.18%

UNSECURE
2006 2007 2008 2009 2010
D LOANS
Ultratech 229.9 427.38 757.84 965.83 750
Acc Ltd 226.05 195.02 40.38 32.03 16.92
Tata 324.41 5886.41 14501.11 23033.13 22979
1392.1 2079.9 2857.1
Jindal 964.6 1 6 6 4148

% INCREASE IN UNSECURED LOANS:

% INCREASE
IN
2006 2007 2008 2009 2010
UNSECURE
D LOANS
Ultratech - 85.90% 77.32% 27.45% -22.27%

86
 Acc Ltd - -13.73% -79.29% -20.68% -47.71%
-
Tata - 1714.50% 146.35% 58.84% 0.2344%
Jindal - 44.32% 49.41% 37.37% 45.18%

CHAPTER: 4
4.1 Annexure of Different Company
4.2 Cashflowstatement, Balance sheet & P & L
account.

87
 ANNEXURE

ULTRATECH CEMENT

Statement showing Shareholding Pattern

NO of
shares held
in de Total shareholding
Category of NO of Total NO materialize as a % of total NO of
No shareholder shareholders of shares d form shares Shares pledged
% of % of Number
shares shares of % No. of
(A+B) (A+B+C) shares shares
(A) Shareholding of Promoter and Promoter Group
-1 Indian

Individuals/ Hindu
(a) Undivided Family 2 800 800 0 0 0 0
Central / State
(b) Government(s) 0 0 0 0 0 0 0

(c) Bodies Corporate 2 68192301 68192301 54.86 54.78 0 0

Financial
(d) Institutions/ Banks 0 0 0 0 0 0 0
(e) Any Other (specify)
0 0 0 0 0 0 0

Sub-Total (A)(1) 4 68193101 68193101 54.86 54.78 0 0

-2 Foreign
Individuals (NRI/
(a) FI) 0 0 0 0 0 0 0

(b) Bodies Corporate 0 0 0 0 0 0 0

(c) Institutions 0 0 0 0 0 0 0
(d) Any Other (specify)
0 0 0 0 0 0 0

88
 Sub-Total (A)(2) 0 0 0 0 0 0 0

Total
Shareholding of
Promoter and
Promoter Group
(A)= (A)(1)+(A)
(2) 4 68193101 68193101 54.86 54.78 0 0
(B) Public shareholding
-1 Institutions

(a) Mutual Funds/ UTI 58 2087135 2076240 1.68 1.68 NA NA

Financial
(b) Institutions/ Banks 81 32643 27551 0.03 0.03 NA NA
Central / State
(c) Government(s) 0 0 0 0 0 NA NA

Venture Capital
(d) Funds 0 0 0 0 0 NA NA
Insurance
(e) Companies 20 11847883 11847727 9.53 9.52 NA NA

Foreign Institutional
(f) Investors 203 13658537 13653160 10.99 10.97 NA NA

Foreign Venture
(g) Capital Investors 0 0 0 0 0 NA NA
(h) Any Other (specify)
0 0 0 0 0 0 0

Sub-Total (B)(1) 362 27626198 27604678 22.23 22.2 NA NA

-2 Non-institutions

(a) Bodies Corporate 1837 9373654 9324126 7.54 7.53 NA NA

(b) Individuals

Individual
shareholders
holding nominal
share capital up to
(i) Rs. 1 lakh 250473 14725637 11052310 11.85 11.83 NA NA

Individual
shareholders
holding nominal
share capital in
(ii) excess of Rs. 1 lakh 51 3780403 3780403 3.04 3.04 NA NA
(c) Any Other (specify)

89
 Non-Resident (Rep) 1869 342230 270357 0.28 0.27 NA NA

Foreign Nationals 14 51796 48658 0.04 0.04 NA NA

Non Domestic Cos. 6 722 264 0 0 NA NA

Non-Resident (Non-
Rep) 1383 219982 201037 0.18 0.18 NA NA

Sub-Total(B)(2) 255633 28494424 24677155 22.92 22.89 NA NA

Total Public
Shareholding
(B)= (B)(1)+(B)
(2) 255995 56120622 52281833 45.15 45.09 NA NA

TOTAL(A)+(B) 255999 1.24E+08 1.2E+08 100 99.87 0 0

Shares held by
Custodians and
against which
Depository
Receipts have
(C) been issued 1 173356 173356 0.14 NA NA

GRAND TOTAL (A)

+(B)+(C) 256000 1.2E+08 1.2E+08 100 0 0

90
 CAPITAL HISTORY OF ULTRATECH

Instrument Auth Issued PAIDUP

Capital Capital
From To (Rs. cr) (Rs. cr) Shares Face Capital
(nos) Value

2009 2010 Equity Share 130 124.49 124487079 10 124.49

2008 2009 Equity Share 130 124.49 124485879 10 124.49

2007 2008 Equity Share 130 124.49 124485879 10 124.49

2006 2007 Equity Share 130 124.49 124485879 10 124.49

2005 2006 Equity Share 130 124.4 124398621 10 124.4

2004 2005 Equity Share 130 124.4 124398621 10 124.4

2003 2004 Equity Share 130 124.4 124398621 10 124.4

2002 2003 Equity Share 30 30 29999993 1 3

91
 BALANCESHEET

Mar
Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2006
2007

SOURCES OF FUNDS :

Share Capital 124.49 124.49 124.49 124.49 124.49

Reserves & Surplus 4482.17 3475.93 2571.73 1639.29 913.78
Total Shareholders Funds 4606.66 3600.42 2696.22 1763.78 1038.27
Secured Loans 854.19 1175.80 982.66 1151.25 1221.93
Unsecured Loans 750.33 965.83 757.84 427.38 229.90
Total Debt 1604.52 2141.63 1740.50 1578.63 1451.83
Total Liabilities 6211.18 5742.05 4436.72 3342.41 2490.10

APPLICATION OF FUNDS :

Gross Block 8078.14 7401.02 4972.60 4784.70 4605.38

Less: Accum. Depreciation 3136.46 2765.33 2472.14 2267.42 2068.21
Net Block 4941.68 4635.69 2500.46 2517.28 2537.17
Capital Work in Progress 259.37 677.28 2283.15 696.95 141.03
Investments 1669.55 1034.80 170.90 483.45 172.39

Current Assets, Loans & Advances :

Inventories 821.70 691.97 609.76 433.58 379.57

Sundry Debtors 215.83 193.94 216.61 183.50 172.55
Cash and Bank Balance 83.73 104.49 100.69 89.59 61.60
Loans and Advances 374.92 398.30 390.43 265.46 168.23
Total Current Assets 1496.18 1388.70 1317.49 972.13 781.95
Current Liabilities 1994.59 1862.27 1709.73 1308.93 1103.26
Provisions 161.01 132.15 125.55 18.47 39.18
Total Current Liabilities 2155.60 1994.42 1835.28 1327.40 1142.44
Net Current Assets -659.42 -605.72 -517.79 -355.27 -360.49

92
 Miscellaneous Expenses not w/o 0.00 0.00 0.00 0.00 0.00
Total Assets 6211.18 5742.05 4436.72 3342.41 2490.10
Contingent Liabilities 186.97 188.63 153.85 193.46 153.45

P&L ACCOUNT

Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2007 Mar 2006

Sales Turnover 7729.13 7160.42 6285.80 5484.04 3785.29

Other Income 122.71 105.84 100.71 61.46 37.00
Stock Adjustments -2.27 88.76 23.42 -30.76 35.74
Total Income 7849.57 7355.02 6409.93 5514.74 3858.03
Raw Materials 1020.33 696.08 537.08 575.14 549.43
Excise Duty 679.45 777.34 773.81 575.30 482.46
Power & Fuel Cost 1433.04 1715.06 1255.05 1139.85 911.29
Other Manufacturing Expenses 714.61 698.61 569.35 505.66 288.45
Employee Cost 244.19 212.64 163.15 113.86 90.42
Selling and Administration Expenses 1616.65 1378.67 1253.98 1096.41 924.90
Miscellaneous Expenses 48.04 67.11 31.14 29.36 19.89
Less: Preoperative Expenditure Capitalised 0.00 0.00 0.00 0.00 0.00
Profit before Interest, Depreciation & Tax 2093.26 1809.51 1826.37 1479.16 591.19
Interest & Financial Charges 117.52 125.51 82.31 86.83 89.64
Profit before Depreciation & Tax 1975.74 1684.00 1744.06 1392.33 501.55
Depreciation 388.08 323.00 237.23 226.25 216.03
Profit Before Tax 1587.66 1361.00 1506.83 1166.08 285.52
Tax 494.42 383.98 499.22 383.80 55.76
Profit After Tax 1093.24 977.02 1007.61 782.28 229.76
Adjustment below Net Profit 0.00 0.00 0.00 0.00 0.00
P & L Balance brought forward 2438.40 1598.12 775.16 180.57 10.11
Appropriations 802.27 136.74 184.65 187.69 59.30
P & L Bal. carried down 2729.37 2438.40 1598.12 775.16 180.57
Equity Dividend 74.69 62.24 62.24 49.79 21.79

93
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Corporate Dividend Tax 12.41 10.58 10.58 6.98 3.06
Equity Dividend (%) 60.00 50.00 50.00 40.00 17.50
Earning Per Share (Rs.) 86.82 77.63 80.09 62.28 18.22
Book Value 370.04 289.21 216.58 141.68 83.45
Extraordinary Items 1.48 4.02 0.07 0.14 0.23

CASH FLOWS

Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2007 Mar 2006

Cash and Cash Equivalents at Begining of the year 104.49 100.69 89.59

Net Cash from Operating Activities 1571.93 1457.57 1381.83

Net Cash Used In Investing Activities -851.66 -1645.43 -1441.79

Net Cash Used In Financing Activities -741.03 191.66 71.06

Net Inc/(Dec) In Cash And Cash -20.76 3.80 11.10

Cash And Cash Equivalents At End Of The Year 83.73 104.49 100.

RATIOANALYSIS

Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2007

Debt-Equity Ratio 0.46 0.62 0.74 1.08

Long Term Debt-Equity Ratio 0.41 0.52 0.67 1.07
Current Ratio 0.64 0.61 0.65 0.70
Fixed Assets 1.00 1.16 1.29 1.17
Inventory 10.21 11.00 12.05 13.49
Debtors 37.72 34.88 31.42 30.80
Interest Cover Ratio 14.51 11.84 19.31 14.43

94
Operating Profit Margin(%) 27.08 25.27 29.06 26.97
Profit Before Interest And Tax Margin(%) 22.06 20.76 25.28 22.85
PBDTM (%) 25.56 23.52 27.75 25.39
Cash Profit Margin(%) 19.17 18.16 19.80 18.39
Adjusted Net Profit Margin(%) 14.14 13.64 16.03 14.26
Return On Capital Employed(%) 28.53 29.21 40.86 42.96
Return On Net Worth(%) 26.64 31.03 45.18 55.84

ACC CEMENT

Statement showing Shareholding Pattern

NO of
shares held
in de Total shareholding
Category of NO of Total NO materialize as a % of total NO of
No shareholder shareholders of shares d form shares Shares pledged
% of % of Number
shares shares of % No. of
(A+B) (A+B+C) shares shares
(A) Shareholding of Promoter and Promoter Group
-1 Indian

Individuals/ Hindu
(a) Undivided Family 2 800 800 0 0 0 0
Central / State
(b) Government(s) 0 0 0 0 0 0 0

(c) Bodies Corporate 2 68192301 68192301 54.86 54.78 0 0

Financial
(d) Institutions/ Banks 0 0 0 0 0 0 0
(e) Any Other (specify)
0 0 0 0 0 0 0

Sub-Total (A)(1) 4 68193101 68193101 54.86 54.78 0 0

-2 Foreign
Individuals (NRI/
(a) FI) 0 0 0 0 0 0 0

(b) Bodies Corporate 0 0 0 0 0 0 0

(c) Institutions 0 0 0 0 0 0 0
(d) Any Other (specify)
0 0 0 0 0 0 0

Sub-Total (A)(2) 0 0 0 0 0 0 0

95
 Total
Shareholding of
Promoter and
Promoter Group
(A)= (A)(1)+(A)
(2) 4 68193101 68193101 54.86 54.78 0 0
(B) Public shareholding
-1 Institutions

(a) Mutual Funds/ UTI 58 2087135 2076240 1.68 1.68 NA NA

Financial
(b) Institutions/ Banks 81 32643 27551 0.03 0.03 NA NA
Central / State
(c) Government(s) 0 0 0 0 0 NA NA

Venture Capital
(d) Funds 0 0 0 0 0 NA NA
Insurance
(e) Companies 20 11847883 11847727 9.53 9.52 NA NA

Foreign Institutional
(f) Investors 203 13658537 13653160 10.99 10.97 NA NA

Foreign Venture
(g) Capital Investors 0 0 0 0 0 NA NA
(h) Any Other (specify)
0 0 0 0 0 0 0

Sub-Total (B)(1) 362 27626198 27604678 22.23 22.2 NA NA

-2 Non-institutions

(a) Bodies Corporate 1837 9373654 9324126 7.54 7.53 NA NA

(b) Individuals

Individual
shareholders
holding nominal
share capital up to
(i) Rs. 1 lakh 250473 14725637 11052310 11.85 11.83 NA NA

Individual
shareholders
holding nominal
share capital in
(ii) excess of Rs. 1 lakh 51 3780403 3780403 3.04 3.04 NA NA
(c) Any Other (specify)

Non-Resident (Rep) 1869 342230 270357 0.28 0.27 NA NA

96
 Foreign Nationals 14 51796 48658 0.04 0.04 NA NA

Non Domestic Cos. 6 722 264 0 0 NA NA

Non-Resident (Non-
Rep) 1383 219982 201037 0.18 0.18 NA NA

Sub-Total(B)(2) 255633 28494424 24677155 22.92 22.89 NA NA

Total Public
Shareholding
(B)= (B)(1)+(B)
(2) 255995 56120622 52281833 45.15 45.09 NA NA

TOTAL(A)+(B) 255999 1.24E+08 1.2E+08 100 99.87 0 0

Shares held by
Custodians and
against which
Depository
Receipts have
(C) been issued 1 173356 173356 0.14 NA NA

GRAND TOTAL (A)

+(B)+(C) 256000 1.2E+08 1.2E+08 100 0 0

97
 CAPITAL HISTORY OF ULTRATECH

Instrument Auth Issued PAIDUP

Capital Capital
From To (Rs. cr) (Rs. cr) Shares Face Capital
(nos) Value

2009 2010 Equity Share 130 124.49 124487079 10 124.49

2008 2009 Equity Share 130 124.49 124485879 10 124.49

2007 2008 Equity Share 130 124.49 124485879 10 124.49

2006 2007 Equity Share 130 124.49 124485879 10 124.49

2005 2006 Equity Share 130 124.4 124398621 10 124.4

2004 2005 Equity Share 130 124.4 124398621 10 124.4

2003 2004 Equity Share 130 124.4 124398621 10 124.4

2002 2003 Equity Share 30 30 29999993 1 3

98
BALANCESHEET

Mar
Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2006
2007

SOURCES OF FUNDS :

Share Capital 124.49 124.49 124.49 124.49 124.49

Reserves & Surplus 4482.17 3475.93 2571.73 1639.29 913.78
Total Shareholders Funds 4606.66 3600.42 2696.22 1763.78 1038.27
Secured Loans 854.19 1175.80 982.66 1151.25 1221.93
Unsecured Loans 750.33 965.83 757.84 427.38 229.90
Total Debt 1604.52 2141.63 1740.50 1578.63 1451.83
Total Liabilities 6211.18 5742.05 4436.72 3342.41 2490.10

APPLICATION OF FUNDS :

Gross Block 8078.14 7401.02 4972.60 4784.70 4605.38

Less: Accum. Depreciation 3136.46 2765.33 2472.14 2267.42 2068.21
Net Block 4941.68 4635.69 2500.46 2517.28 2537.17
Capital Work in Progress 259.37 677.28 2283.15 696.95 141.03
Investments 1669.55 1034.80 170.90 483.45 172.39

Current Assets, Loans & Advances :

Inventories 821.70 691.97 609.76 433.58 379.57

Sundry Debtors 215.83 193.94 216.61 183.50 172.55
Cash and Bank Balance 83.73 104.49 100.69 89.59 61.60
Loans and Advances 374.92 398.30 390.43 265.46 168.23
Total Current Assets 1496.18 1388.70 1317.49 972.13 781.95
Current Liabilities 1994.59 1862.27 1709.73 1308.93 1103.26
Provisions 161.01 132.15 125.55 18.47 39.18
Total Current Liabilities 2155.60 1994.42 1835.28 1327.40 1142.44
Net Current Assets -659.42 -605.72 -517.79 -355.27 -360.49
Miscellaneous Expenses not w/o 0.00 0.00 0.00 0.00 0.00
Total Assets 6211.18 5742.05 4436.72 3342.41 2490.10
Contingent Liabilities 186.97 188.63 153.85 193.46 153.45

99
 P&L ACCOUNT

Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2007 Mar 2006

Sales Turnover 7729.13 7160.42 6285.80 5484.04 3785.29

Other Income 122.71 105.84 100.71 61.46 37.00
Stock Adjustments -2.27 88.76 23.42 -30.76 35.74
Total Income 7849.57 7355.02 6409.93 5514.74 3858.03
Raw Materials 1020.33 696.08 537.08 575.14 549.43
Excise Duty 679.45 777.34 773.81 575.30 482.46
Power & Fuel Cost 1433.04 1715.06 1255.05 1139.85 911.29
Other Manufacturing Expenses 714.61 698.61 569.35 505.66 288.45
Employee Cost 244.19 212.64 163.15 113.86 90.42
Selling and Administration Expenses 1616.65 1378.67 1253.98 1096.41 924.90
Miscellaneous Expenses 48.04 67.11 31.14 29.36 19.89
Less: Preoperative Expenditure Capitalised 0.00 0.00 0.00 0.00 0.00
Profit before Interest, Depreciation & Tax 2093.26 1809.51 1826.37 1479.16 591.19
Interest & Financial Charges 117.52 125.51 82.31 86.83 89.64
Profit before Depreciation & Tax 1975.74 1684.00 1744.06 1392.33 501.55
Depreciation 388.08 323.00 237.23 226.25 216.03
Profit Before Tax 1587.66 1361.00 1506.83 1166.08 285.52
Tax 494.42 383.98 499.22 383.80 55.76
Profit After Tax 1093.24 977.02 1007.61 782.28 229.76
Adjustment below Net Profit 0.00 0.00 0.00 0.00 0.00
P & L Balance brought forward 2438.40 1598.12 775.16 180.57 10.11
Appropriations 802.27 136.74 184.65 187.69 59.30
P & L Bal. carried down 2729.37 2438.40 1598.12 775.16 180.57
Equity Dividend 74.69 62.24 62.24 49.79 21.79
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Corporate Dividend Tax 12.41 10.58 10.58 6.98 3.06
Equity Dividend (%) 60.00 50.00 50.00 40.00 17.50
Earning Per Share (Rs.) 86.82 77.63 80.09 62.28 18.22

100
Book Value 370.04 289.21 216.58 141.68 83.45
Extraordinary Items 1.48 4.02 0.07 0.14 0.23

CASH FLOWS

Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2007 Mar 2006

Cash and Cash Equivalents at Begining of the year 104.49 100.69 89.59

Net Cash from Operating Activities 1571.93 1457.57 1381.83

Net Cash Used In Investing Activities -851.66 -1645.43 -1441.79

Net Cash Used In Financing Activities -741.03 191.66 71.06

Net Inc/(Dec) In Cash And Cash -20.76 3.80 11.10

Cash And Cash Equivalents At End Of The Year 83.73 104.49 100.

RATIOANALYSIS

Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2007

Debt-Equity Ratio 0.46 0.62 0.74 1.08

Long Term Debt-Equity Ratio 0.41 0.52 0.67 1.07
Current Ratio 0.64 0.61 0.65 0.70
Fixed Assets 1.00 1.16 1.29 1.17
Inventory 10.21 11.00 12.05 13.49
Debtors 37.72 34.88 31.42 30.80
Interest Cover Ratio 14.51 11.84 19.31 14.43
Operating Profit Margin(%) 27.08 25.27 29.06 26.97
Profit Before Interest And Tax Margin(%) 22.06 20.76 25.28 22.85
PBDTM (%) 25.56 23.52 27.75 25.39
Cash Profit Margin(%) 19.17 18.16 19.80 18.39

101
Adjusted Net Profit Margin(%) 14.14 13.64 16.03 14.26
Return On Capital Employed(%) 28.53 29.21 40.86 42.96
Return On Net Worth(%) 26.64 31.03 45.18 55.84

TATA STELL

Statement showing Shareholding Pattern

NO of
shares held Total
in de shareholding as a
Category of N0 of Total NO materialize % of total number Shares
No shareholder shareholders of shares d form of shares pledgedencumbered
% of
share % of Number
s shares of % No. of
(A+B) (A+B+C) shares shares
(A) Shareholding of Promoter and Promoter Group
-1 Indian
Individuals/
Hindu
Undivided
(a) Family 0 0 0 0 0 0 0

Central / State
(b) Government 0 0 0 0 0 0 0

Bodies
(c) Corporate 54 2.77E+08 2.77E+08 31.33 31.21 0 0
Financial
Institutions/
(d) Banks 0 0 0 0 0 0 0
(e) Any Other (specify)
Trusts 2 1031460 1031460 0.12 0.12 0 0

Sub-Total (A)
(1) 56 2.78E+08 2.78E+08 31.45 31.33 0 0
-2 Foreign

Individuals
(a) (NRIs/ FIs) 0 0 0 0 0 0 0

Bodies
(b) Corporate 0 0 0 0 0 0 0

102
(c) Institutions 0 0 0 0 0 0 0
(d) Any Other (specify)
0 0 0 0 0 0 0

Sub-Total (A)
(2) 0 0 0 0 0 0 0

Total
Shareholding
of Promoter
and Promoter
Group (A)=
(A)(1)+(A)(2) 56 2.78E+08 2.78E+08 31.45 31.33 0 0
(B) Public shareholding
-1 Institutions

Mutual Funds/
(a) UTI 268 28409325 28337237 3.21 3.2 NA NA
Financial
Institutions/
(b) Banks 392 4113136 3877056 0.47 0.46 NA NA

Central
Government/
State
(c) Government(s) 7 121659 10382 0.01 0.01 NA NA

Venture Capital
(d) Funds 0 0 0 0 0 NA NA

Insurance
(e) Companies 65 1.91E+08 1.91E+08 21.64 21.56 NA NA

Foreign
Institutional
(f) Investors 587 1.38E+08 1.38E+08 15.56 15.5 NA NA

Foreign Venture
Capital
(g) Investors 0 0 0 0 0 NA NA
(h) Any Other (specify)

Foreign
Institutional
Investors - Dr 9 11185375 11185375 1.27 1.26 NA NA

Foreign Bodies -
Dr 8 288237 288237 0.03 0.03 NA NA

Sub-Total (B)
(1) 1336 3.73E+08 3.72E+08 42.19 42.02 NA NA
-2 Non-institutions

103
 Bodies
(a) Corporate 7849 36174171 30255780 4.09 4.08 NA NA
(b) Individuals

Individual
shareholders
holding nominal
share capital up
(i) to Rs. 1 lakh 911920 1.71E+08 1.4E+08 19.35 19.27 NA NA

Individual
shareholders
holding nominal
share capital in
excess of Rs. 1
(ii) lakh 1204 25774651 23018091 2.92 2.91 NA NA
(c) Any Other (specify)
Foreign
Corporate
Bodies 7 6150 5025 0 0 NA NA

Sub-Total(B)
(2) 920980 2.33E+08 1.93E+08 26.36 26.26 NA NA

Total Public
Shareholding
(B)= (B)(1)+
(B)(2) 922316 6.06E+08 5.66E+08 68.55 68.28 NA NA

TOTAL(A)+(B) 922372 8.84E+08 8.44E+08 100 99.61 0 0

Shares held
by Custodians
and against
which
Depository
Receipts have
(C) been issued 1 3399581 3399581 0.38 NA NA

GRAND TOTAL
(A)+(B)+(C) 922373 8.9E+08 8.5E+08 100 0 0

104
 CAPITAL HISTORY OF TATA STEEL

Period Instrument Authorized Issued -PAIDUP-

Capital Capital
From To (Rs. cr) (Rs. cr) Shares Face Capital
(nos) Value
Equity
2009 2010 Share 214.75 214.75 887214196 10 214.75
Equity
2008 2009 Share 214.75 214.75 730592471 10 214.75
Equity
2007 2008 Share 214.75 214.75 730584320 10 214.75
Equity
2006 2007 Share 214.75 214.75 580472856 10 214.75
Equity
2005 2006 Share 214.75 214.75 553472856 10 214.75
Equity
2004 2005 Share 214.75 214.75 553472856 10 214.75
Equity
2003 2004 Share 214.75 214.75 367771901 10 214.75
Equity
2002 2003 Share 214.75 214.75 367771901 10 214.75

105
 BALANCE SHEET

Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2007 Mar 2006

SOURCES OF FUNDS :

Share Capital 887.41 6203.45 6203.30 580.67 553.67

Reserves & Surplus 36074.53 23973.05 21103.08 13515.49 9201.63
Total Shareholders Funds 36961.94 30176.50 27306.38 14096.16 9755.30
Secured Loans 2259.32 3913.05 3520.58 3758.92 2191.74
Unsecured Loans 22979.88 23033.13 14501.11 5886.41 324.41
Total Debt 25239.20 26946.18 18021.69 9645.33 2516.15
Total Liabilities 62201.14 57122.68 45328.07 23741.49 12271.45

APPLICATION OF FUNDS :

Gross Block 22306.07 20057.01 16479.59 16029.49 15407.17

Less: Accum. Depreciation 10143.63 9062.47 8223.48 7486.37 6699.85
Net Block 12162.44 10994.54 8256.11 8543.12 8707.32
Capital Work in Progress 3843.59 3487.68 4367.45 2497.44 1157.73
Investments 44979.67 42371.78 4103.19 6106.18 4069.96

Current Assets, Loans & Advances :

Inventories 3077.75 3480.47 2604.98 2332.98 2174.75

Sundry Debtors 434.83 635.98 543.48 631.63 539.40
Cash and Bank Balance 3234.14 1590.60 465.04 7681.35 288.39
Loans and Advances 6678.55 6339.27 34560.40 4025.95 2006.21
Total Current Assets 13425.27 12046.32 38173.90 14671.91 5008.75
Current Liabilities 9863.31 8965.52 5742.87 5242.15 4564.14
Provisions 2346.52 2917.19 3984.82 3037.54 2361.44
Total Current Liabilities 12209.83 11882.71 9727.69 8279.69 6925.58
Net Current Assets 1215.44 163.61 28446.21 6392.22 -1916.83
Miscellaneous Expenses not w/o 0.00 105.07 155.11 202.53 253.27

Total Assets 62201.14 57122.68 45328.07 23741.49 12271.45

Contingent Liabilities 4728.40 3921.78 2756.54 5072.96 2209.45

106
 P&L ACCOUNT

Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2007 Mar 2006

Sales Turnover 26757.80 26843.73 22189.55 19762.57 17140.24

Other Income 1287.91 651.51 975.08 568.31 356.24
Stock Adjustments -134.97 289.27 38.73 82.47 104.91
Total Income 27910.74 27784.51 23203.36 20413.35 17601.39
Raw Materials 5663.82 6068.78 3743.14 3572.06 3024.38
Excise Duty 1816.95 2495.21 2537.02 2304.18 2004.83
Power & Fuel Cost 1383.44 1222.48 1048.11 1027.84 897.57
Other Manufacturing Expenses 3509.37 3195.88 2611.20 2500.00 2090.67
Employee Cost 2354.08 2295.41 1803.87 1598.96 1397.39
Selling and Administration Expenses 2044.45 1831.48 1601.78 1491.57 1373.71
Miscellaneous Expenses 1319.07 1240.41 1203.74 822.57 735.89
Less: Preoperative Expenditure Capitalised 326.11 343.65 175.50 236.02 112.62
Profit before Interest, Depreciation & Tax 10145.67 9778.51 8830.00 7332.19 6189.57
Interest & Financial Charges 1848.19 1489.50 929.03 251.25 174.51
Profit before Depreciation & Tax 8297.48 8289.01 7900.97 7080.94 6015.06
Depreciation 1083.18 973.40 834.61 819.29 775.10
Profit Before Tax 7214.30 7315.61 7066.36 6261.65 5239.96
Tax 2167.50 2113.87 2379.33 2039.50 1733.58
Profit After Tax 5046.80 5201.74 4687.03 4222.15 3506.38
Adjustment below Net Profit 12.28 0.00 0.00 0.00 0.00
P & L Balance brought forward 9496.70 6387.46 4593.98 2976.16 1790.21
Appropriations 1783.13 2092.50 2893.55 2604.33 2320.43
P & L Bal. carried down 12772.65 9496.70 6387.46 4593.98 2976.16
Equity Dividend 709.77 1168.95 1168.93 943.91 719.51
Preference Dividend 45.88 109.45 22.19 0.00 0.00
Corporate Dividend Tax 122.80 214.10 202.43 160.42 100.92
Equity Dividend (%) 80.00 160.00 160.00 155.00 130.00
Earning Per Share (Rs.) 54.97 66.75 61.06 69.95 61.51
Book Value 416.51 338.04 298.70 240.22 176.19
Extraordinary Items 624.85 220.24 312.43 -83.74 -1.23

107
 CASHFLOWS

Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2007 Mar 2006

Cash and Cash Equivalents at Begining of the year 1592.89 465.04 7681.35

Net Cash from Operating Activities 8369.22 7397.22 6254.20

Net Cash Used In Investing Activities -5254.84 -9428.08 -29318.58

Net Cash Used In Financing Activities -1473.13 3156.42 15848.07

Net Inc/(Dec) In Cash And Cash 1641.25 1125.56 -7216.31

Cash And Cash Equivalents At End Of The Year 3234.14 1590.60 465.04

RATIO ANALYSIS

Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2007

Debt-Equity Ratio 0.78 0.78 0.67 0.51

Long Term Debt-Equity Ratio 0.78 0.78 0.66 0.50
Current Ratio 1.05 2.30 2.88 1.27
Fixed Assets 1.26 1.47 1.37 1.26
Inventory 8.16 8.82 8.99 8.77
Debtors 49.98 45.52 37.77 33.75
Interest Cover Ratio 4.42 5.91 8.61 25.92
Operating Profit Margin(%) 34.58 36.43 39.79 37.10
Profit Before Interest And Tax Margin(%) 30.53 32.80 36.03 32.96
PBDTM (%) 27.67 30.88 35.61 35.83
Cash Profit Margin(%) 20.57 23.00 24.88 25.51
Adjusted Net Profit Margin(%) 16.53 19.38 21.12 21.36
Return On Capital Employed(%) 13.70 17.23 23.27 36.63
Return On Net Worth(%) 14.19 21.88 25.97 35.40

108
 JINDAL STELL

Statement showing Shareholding Pattern

109
 NO of
shares held Total
in de shareholding as a
Category of NO of Total NO materialize % of total number Shares
No shareholder shareholders of shares d form of shares pledgedencumbered
% of
share % of Number
s shares of % No. of
(A+B) (A+B+C) shares shares
A Shareholding of Promoter and Promoter Group
-1 Indian
Individuals/
Hindu
Undivided
(a) Family 24 12937462 6437572 1.39 1.39 0 0

Central / State
(b) Government(s) 0 0 0 0 0 0 0

Bodies
(c) Corporate 21 4.6E+08 3.47E+08 49.27 49.27 0 0
Financial
Institutions/
(d) Banks 0 0 0 0 0 0 0
(e) Any Other (specify)
0 0 0 0 0 0 0

Sub-Total (A)
(1) 45 4.73E+08 3.54E+08 50.66 50.66 0 0
-2 Foreign

Individuals
(a) (NRIls/ F Is) 1 527400 527400 0.06 0.06 0 0

Bodies
(b) Corporate 10 71997600 71997600 7.71 7.71 0 0

(c) Institutions 0 0 0 0 0 0 0
(d) Any Other (specify)
0 0 0 0 0 0 0

Sub-Total (A)
(2) 11 72525000 72525000 7.77 7.77 0 0

Total
Shareholding
of Promoter
and Promoter
Group (A)=
(A)(1)+(A)(2) 56 5.46E+08 4.26E+08 58.43 58.43 0 0
B Public shareholding
-1 Institutions

Mutual Funds/
(a) UTI 131 22274682 22154602 2.39 2.39 NA NA

110
 CAPITAL HISTORY OF JINDAL
Period Instrument Authorized Issued -PAIDUP-
Capital Capital
From To (Rs. cr) (Rs. cr) Shares Face Capital
(nos) Value
Equity
2008 2009 Share 20 15.47 154652683 1 15.47
Equity
2007 2008 Share 20 15.4 153961340 1 15.4
Equity
2006 2007 Share 20 15.4 30792268 5 15.4
Equity
2005 2006 Share 20 15.4 30792268 5 15.4
Equity
2004 2005 Share 20 15.4 30792268 5 15.4
Equity
2003 2004 Share 20 15.4 30792268 5 15.4
Equity
2002 2003 Share 20 14.63 14631134 10 14.63
Equity
2001 2002 Share 20 12.9 12896112 10 12.9
Equity
2000 2001 Share 20 12.71 12712262 10 12.71

111
 BALANCE SHEET

Mar
Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2006
2007

SOURCES OF FUNDS :

Share Capital 93.12 16.47 16.40 16.40 16.40

Reserves & Surplus 6652.88 5398.85 3708.86 2462.01 1823.26
Total Shareholders Funds 6746.00 5415.32 3725.26 2478.41 1839.66
Secured Loans 4235.16 2105.49 1783.39 2115.61 1780.77
Unsecured Loans 4148.10 2857.16 2079.96 1392.11 964.60
Total Debt 8383.26 4962.65 3863.35 3507.72 2745.37
Total Liabilities 15129.26 10377.97 7588.61 5986.13 4585.03

APPLICATION OF FUNDS :

Gross Block 8814.21 7362.90 5918.94 4929.03 3243.05

Less: Accum. Depreciation 2110.15 1617.00 1183.11 781.75 542.33
Net Block 6704.06 5745.90 4735.83 4147.28 2700.72
Capital Work in Progress 6435.28 2318.01 660.48 937.84 1146.27
Investments 1067.11 1233.40 1036.19 709.82 430.30

Current Assets, Loans & Advances :

Inventories 1328.50 1209.96 980.56 642.44 568.65

Sundry Debtors 622.36 391.46 287.38 320.31 299.54
Cash and Bank Balance 60.10 308.96 577.91 52.97 31.30
Loans and Advances 3954.47 3278.90 1508.21 819.59 606.32
Total Current Assets 5965.43 5189.28 3354.06 1835.31 1505.81
Current Liabilities 3701.93 3125.83 1619.15 1261.88 926.67
Provisions 1343.71 985.81 581.94 385.48 272.14
Total Current Liabilities 5045.64 4111.64 2201.09 1647.36 1198.81
Net Current Assets 919.79 1077.64 1152.97 187.95 307.00

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Miscellaneous Expenses not w/o 3.02 3.02 3.14 3.24 0.74
Total Assets 15129.26 10377.97 7588.61 5986.13 4585.03
Contingent Liabilities 6665.56 3201.35 2121.86 1578.03 679.59

P&L ACCOUNT

Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2007 Mar 2006

Sales Turnover 7887.62 8450.86 6115.27 3899.81 2877.46

Other Income 222.01 198.53 140.92 72.34 37.25
Stock Adjustments 19.91 97.74 202.89 56.86 183.98
Total Income 8129.54 8747.13 6459.08 4029.01 3098.69
Raw Materials 2405.34 2732.64 1359.83 783.38 450.35
Excise Duty 527.99 780.62 763.49 396.71 312.91
Power & Fuel Cost 391.80 353.94 407.91 341.27 428.89
Other Manufacturing Expenses 1200.51 1165.29 820.84 502.98 394.59
Employee Cost 143.44 146.41 125.30 80.46 72.81
Selling and Administration Expenses 398.90 497.12 397.27 383.39 323.99
Miscellaneous Expenses 310.31 368.50 387.75 86.62 66.09
Less: Preoperative Expenditure Capitalised 0.00 0.00 0.00 0.00 0.00
Profit before Interest, Depreciation & Tax 2751.25 2702.61 2196.69 1454.20 1049.06
Interest & Financial Charges 331.66 267.89 243.02 173.19 102.24
Profit before Depreciation & Tax 2419.59 2434.72 1953.67 1281.01 946.82
Depreciation 512.16 433.03 451.51 336.47 219.17
Profit Before Tax 1907.43 2001.69 1502.16 944.54 727.65
Tax 427.75 465.21 265.20 241.55 154.71
Profit After Tax 1479.68 1536.48 1236.96 702.99 572.94
Adjustment below Net Profit 0.00 0.00 -0.01 0.00 0.00
P & L Balance brought forward 4318.95 3047.80 2002.59 1433.06 955.83
Appropriations 319.80 265.33 191.74 133.46 95.71
P & L Bal. carried down 5478.83 4318.95 3047.80 2002.59 1433.06
Equity Dividend 116.52 85.33 62.02 55.43 46.19
Preference Dividend 0.00 0.00 0.00 0.00 0.00

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 Corporate Dividend Tax 4.28 0.00 10.55 8.87 6.48
Equity Dividend (%) 125.00 550.00 400.00 360.00 300.00
Earning Per Share (Rs.) 15.84 99.32 79.64 225.36 183.92
Book Value 72.20 348.23 241.84 804.35 596.97
Extraordinary Items -1.49 -0.02 3.55 -4.89 -0.83

FINANCIAL RATIOS

Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2007

Debt-Equity Ratio 1.10 0.97 1.19 1.45

Long Term Debt-Equity Ratio 0.93 0.91 1.06 1.23
Current Ratio 1.00 1.25 1.11 0.88
Fixed Assets 0.98 1.27 1.13 0.95
Inventory 6.21 7.72 7.54 6.44
Debtors 15.56 24.90 20.13 12.58
Interest Cover Ratio 6.75 8.47 7.18 6.45
Operating Profit Margin(%) 34.88 31.98 35.92 37.29
Profit Before Interest And Tax Margin(%) 28.39 26.86 28.54 28.66
PBDTM (%) 30.68 28.81 31.95 32.85
Cash Profit Margin(%) 25.25 23.31 27.61 26.65
Adjusted Net Profit Margin(%) 18.76 18.18 20.23 18.03
Return On Capital Employed(%) 17.56 25.27 25.72 21.15
Return On Net Worth(%) 24.34 33.63 39.89 32.58

CASHFLOWS

Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2007 Mar 2006

Cash and Cash Equivalents at Begining of the year 308.96 577.91 52.97

Net Cash from Operating Activities 2403.08 2383.67 1411.78

Net Cash Used In Investing Activities -5811.69 -3086.50 -927.48

Net Cash Used In Financing Activities 3159.75 433.88 40.64

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Net Inc/(Dec) In Cash And Cash -248.86 -268.95 524.94

Cash And Cash Equivalents At End Of The Year 60.10 308.96 577.91

CHAPTER: 5
5.1 Findings & Suggestion
5.2 Conclusion
5.3 Glossary

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 Findings And Suggestions

Ultratech Cement Ltd

1. The sales turnover is increased by 7.94% FY10 and net profit in the
FY10 is 11.87%as compared to previous year.
2. Capital work in progress is decreased to 61.74 as compared in previous year
and profit before and depreciation .
3. Assets has increased 8.16% FR10

ACC Ltd

1.Price of the share increased to 33.40% in FY10 compared to previous year.

2 Profits are increased in FY10 i.e., 32.50 as compared to previous year
4. Sundry debtors has reduced to 2.25%
5. Assets has increased by 21.70% in FY10 compared to previous year

Tata steel

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1. Net sales has increased in FY10 i.e., 5.95%compared to previous year
2. Profits has reduced by 2.98% due to the operating income
3. Unsecured loans has reduced to 47.71%
4. Assets has increased by 8.89%FY10

Jindal steel and power

1. Debtors has increased to 59.07 compared to previous year

2. Liabilities has increased 46.173%
3. Sales has reducedto 6.66%FY10 and profits has reduced to3.71 as compared
to previous year

Ultra-tech Cement Ltd:

1. There is a marginal increase of sales the company which is a good sign for
future existance.
2. There is a decrease in the secured and un secured loans which is healthy sign
for company

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 3. The over financial position of the company is satisfactory

Acc cement:

1. The sales has increased marginally

2. There is a huge increase in the profits which is good sign for the company
3. Sundry debtors has reduced marginally ,so the company must try to collect the
debs in time

Tata steel:
1. A little increase in sales which effects the profits of the company
2. Product mix and productivity improve realization; it is advised to improve the
product mix and sales to get better position in the industry.

.Jindal steel and power:

1. The profits and sales has reduced ,the company must try to concentrate on
sales.

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2. The sales turnover is decreased because of increase in the cost, so it is
suggested that the sales are improved by decreasing the cost of the product.
3. There is a huge increase in debtors the company must try to collect their debts
in time.
4. The overall performance of the company is low when compared to other
companies and it is suggested that to improve production and to increase further
performance

Conclusion

In this project, two industries were considered i.e., cement industryand steel
industry for Equity Analysis. The comparison among the two industries is done
with regard to sales multiple and price earnings multiple for 5years.

So it can be concluded that the better option for the investors is to invest in
cement industry .i.e., to give a first preference to cement industry and second
preference to steel industry. (This preference is only when, the comparison is
wsamong these two industries. The result may be different when all the industries
are considered).

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 BIBLIOGRAPHY

1. INVESTMENTS
- William F. Sharpe, Gordon J. Alexander & Jeffery V. Baily

2. Security Analysis and Portfolio Management

- Punithavathy Pandian

3. Financial Management
- M Y Khan and P K Jain

Web References

http://www.nseindia.com

http://www.bseindia.com

http://www.investsmartindia.com
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http://www.moneycontrol .com

GLOSSARY

1. Earnings per Share (EPS) = Earnings after Interest and Tax (EAIT) – Pref.Dev

No. of Equity Shares

Higher the better

2. Dividend Payout Ratio = (Dividend per Share / No. of Equity Shares) x 100
A high DPR indicates a liberal distribution policy and a low DPR reflects
conservative distribution policy of the company.

3. P/E Ratio = Market price of Share / Earnings per Share

A high P/R reflects high earnings potential of the company and vice-versa.

4. Return on Networth = [Net Profit (NP) / Share Holders Funds] x 100

Higher the better

5. Total Assets Turnover Ratio = Sales / Total Assets

6. Gross Profit Margin = [Gross Profit / Net Sales] x 100

7. Net Profit Ratio = [Net Profit / Net Sales] x 100

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8. Book Value per share = Net worth / No. of equity shares

9. Growth in Profitability = (Current year PAT / Base Year PAT) x 100

PAT – Profit after Tax

10. Growth in Sales = (Current year Sales / Base Year Sales) x 100

11. Operating profit margin = EBIDTA / Sales

Earning before Interest & Tax (EBIT) EBITDA – Depreciation

12. Interest Cover Ratio = EBIDTA / Interest

13. Market Capitalization = Share Price (March end) x No. of Equity Shares

14. Net Worth = Equity Share Capital +Total Reserves and Surplus - Revaluation
Reserve - Miscellaneous Expenditure

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