Fundamental Analysis of Scrips &amp Sector

FUNDAMENTAL ANALYSIS OF SCRIPS & SECTOR
CHAPTER-1
INTRODUCTION TO MOTILAL OSWAL
 HISTORY
 MILESTION
 MOST GUIDING PRINCIPLES & CORE
VALUES
1
Motilal Oswal Securities Ltd.
One of the top-ranking broking houses in India, with a dominant

position in both institutional and retail broking, Motilal Oswal
Securities Ltd. is amongst the best-capitalized firms in the broking
industry in terms of net worth.
Motilal Oswal Securities Ltd. was founded in 1987 as a small sub-

broking unit, with just two people running the show. Focus on
customer-first-attitude, ethical and transparent business practices
respect for professionalism, research-based value investing and
implementation of cutting-edge technology have enabled it to
blossom into a thousand-member team.
The institutional business unit has relationships with several leading

foreign institutional investors (FIIs) in the US, UK, Hong Kong and
Singapore. In a recent media report Motilal Oswal Securities Ltd. was
rated as one of the top-10 brokers in terms of business transacted for
FIIs.
The retail business unit provides equity investment solutions to more

than 1,50,000 investors through 650 outlets spanning 320 cities.
Motilal Oswal Securities Ltd. provides services like Advice-Based
Broking, Portfolio Management Services (PMS), E-Broking Services,
Depository Services, Commodities Trading, and IPO and Mutual
2
Fund Investment Advisory Services. Its Value PMS Scheme gave a

305% post-tax return for the period of February 2003 to August 2005.
Motilal Oswal Securities Let’s equity research has been consistently

ranked very highly in surveys conducted by leading international
publications like Asia Money and Institutional Investor. In Asia Money
Brokers Poll 2003 Motilal Oswal Securities Ltd. has been rated as the
Best Domestic Research House - Mega Funds, while in 2000 and
2002 it has been rated as the Best Domestic Equity Research House
and Second best amongst Indian Brokerage firms respectively. The
unique Wealth Creation Study, authored by Mr Raamdeo Agrawal,
Managing Director, is now in its tenth year. Investors keenly await the
annual study for the wealth of information it has on how companies
created wealth during the preceding five years.
The organization finds its strength in its team of young, talented and
confident individuals. Qualified professionals carry out different
functions under the able leadership of its promoters, Mr. Motilal
Oswal and Mr. Raamdeo Agrawal. Its stringent employee selection
process, focus on continuous training and adoption of best
management practices drive Motilal Oswal Securities Ltd. quest to
achieving its vision.
One thing that sets Motilal Oswal Securities Ltd. apart is its time-
tested and well-recognized equity research capability. With value
investing at the core of its investment philosophy, a strong research
team consistently provides high-performance ideas. These are in turn
converted to sound, personalized investment strategies, keeping in
3
view unique client needs. As a result, the Capital Market now

recognizes Motilal Oswal Securities Ltd. as synonymous to Solid
Research and Solid Advice.
MOST GUIDING PRINCIPLES & CORE VALUES.
• Customer interest is paramount

• Ethical and transparent business practices
• Respect for professionals, associates and business
partners
• Research based value investing
• Cutting edge technology to ensure world-class customer
service
4
MOST HISTORY & MILESTONES
The story of MOST goes back many years, when Mr. Motilal Oswal
and Mr. Raamdeo Agrawal met each other as students in a Mumbai
suburban hostel in the early eighties. Both the young chartered
accountants hailing from a rural & an unpretentious background had
a common dream viz 'to build a professional organization with strong
value systems, to provide reliable & honest investment advice to
investors'. Thus was born their first enterprise called "Prudential
Portfolio Services" in 1987.
2004 2003 2002 2001 2000 1999 1998 1996 1995 1994
1990 1987
» Presence expanded to 270 outlets in 150 cities and 20 states
» Value PMS delivers a whopping 160% post tax returns for the
2004period ended April 2004
» Bulls Eye PMS - A momentum based PMS launched
» Start of the Solid Research Solid Advice campaign
2003» MOSt Portfolio Management Services launched with Mr.
Raamdeo Agrawal as the Portfolio Manager. Uniquely
structured performance related fees.
» Inquire team is successful in capturing the uptrend in Banking,
Auto and Infrastructure sectors.
» 15,000 Depository clients acquired.
» 9 own branches setup at 7 cities to provide Equity Advisory
5
Services. More in the pipeline.

» 150 outlets in 110 cities across 18 states & one Union
Territory in India manned by 1000 people servicing over 15,000
Retail and Institutional Investors.
» Mr. Navin Agarwal, Head of Equity Research & Institutional
sales, is inducted in the Board of Directors
» MOSt consolidates its retail operations & upgrades its IT /
Back Office infrastructure to cater to its growing network of
2002
branches, Franchisees and Channel Partners.
» Retail network completes coverage of 100 cities in India.
» Direct servicing of HNI clients is initiated.
» 10,000 Depository clients acquired.
» Legendary marketing guru Shunu Sen’s services taken to
revitalise retail marketing strategy and branding efforts.
2001
» Starts offering Derivatives products and advisory services on
both BSE as well as NSE
» Both Mr. Motilal Oswal and Mr. Raamdeo Agrawal receive
Rashtriya Samman Patra from Central Board of Direct Taxes for
being amongst the top 50 tax payers in India from FY94-FY98
2000» Acquires its 100th Franchisee / Channel Partner and emerges
as a leading player in the Indian Broking Sector
» Becomes a Depository Participant of Central Depository
Services Limited (CDSIL)
6
» Mr. Raamdeo Agrawal starts attending legendary billionaire

investor Warren Buffett’s Annual General Meetings of
Berkshire Hathway Inc. He still continues to attend it every
year.
» The Wealth Creation Study started in 1996 culminates into
Wealth Creation Seminar and Awards function in 1998.
» First Stock Broking house to brand its services as a
research and advise based broker.
1999
» “Wealth Creation” Campaign started.
» www.MotilalOswal.com launched. First broking house in
India to go on the web.
» Becomes a Depository Participant of National Securities
Depository Limited (NSDL).
» Inducts Mr. Ivan Mathias, former country head of Watson
Wyatt Worldwide, on its Board to Directors to shape HR
initiatives.
» Mr. Motilal Oswal joins the Governing Board of The Stock
1998
Exchange, Mumbai.
» Wealth Creation Study started. First of its kind study initiated
1996to identify biggest and fastest wealth creating companies in
Indian Stock markets.
» ”Motilal Oswal” gets incorporated as Motilal Oswal Securities
1995
Ltd.
1994» MOSt acquires NSE Membership and plans for major
expansion of its retail network.
» Inquire (Indian Equity Research) is formally created at a 2500
sq. ft office in South Mumbai with bigger and better quality
infrastructure than the corporate office. Since then nearly 20%
7
of revenue is allocated to research. First Domestic Stock

broking house to have such a strong Research focus
» ”Motilal Oswal” enters Institutional Broking business.
» After just three years in the business, ”Motilal Oswal” is
formed through acquisition of membership on The Bombay
1990
Stock Exchange (BSE). Three more memberships taken in later
years.
» Mr. Motilal Oswal and Mr. Raamdeo Agrawal lay the
foundation of a great partnership by starting a sub-broking firm.
1987
The venture stands out from the rest due to their approach of
Research-based broking even when sub-brokers.
Mr. Raamdeo Agrawal is the co-promoter of Motilal Oswal Securities

Ltd. A member of the Institute of Chartered Accountants of India & an
equity research stalwart, he is the man behind the strong research
capability at MOST.
He is respected by all in the research and broking industry for his

valuable insights on issues related to equity research. His firm belief
in “Value-Investing”, as practiced by the legendary Warren Buffett
and Charlie Munger, forms the core of MOST investment philosophy.
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Management Team
MOST management team is regularly engaged in finding ways to

improve operational efficiencies and customer satisfaction.
You will find CAs, CFAs, ICWAs, CSs, MBAs and IT professionals
managing crucial functions, to bring you best products and services -
from research & advice to trade execution & settlement. At MOST we
practice meritocracy and each of the team members is provided
extensive training.
Training & Manpower Development
MOST conducts various training and development programs regularly

to enhance the capabilities of its team. As much as 5% of the salary
bill is spent on such programs, which is amongst the highest for a
broking organization in India. MOST is truly a learning organization
with lead being taken by the Directors, who regularly participate in top
management learning programs like Strategic Management Program
at Indian School of Business, Hyderabad, Strategy Summits with
Management Gurus like Tom Peters and Dr. Lester Throw, Dean,
Sloan School of Management, (MIT) and Brand Management
Seminar by Al Rise etc.
MOST Wealth Creation Study and Awards function
MOST Wealth Creation Study and Awards function has become a

key event in the Indian Capital Market. The Wealth Creation Study,
initiated, in 1996 is widely appreciated in the investment community
9
and the Indian Corporate Sector. This annual study identifies the
fastest and the biggest wealth creators in the Indian markets over the
last 5 years and felicitates them at a public event, attended by several
leading investors and equity specialists.
The 9th Wealth Creation Awards function was held at the Grand
Hyatt, Mumbai on January, 2005.
Foundation Day
Arising from its deep respect for Knowledge & Value Addition, MOST
celebrates its Foundation Day in a truly unique manner. Not only are
the top performing team members and Business Partners rewarded
for their contributions, but they are also provided training on important
subjects like Customer Profiling, Selling, and Investment Advising etc.
Lot of learning takes place through sharing of successful practices by
MOST Business Partners.
Wealth Creation Seminars
MOST conducts Wealth Creation Seminars across the country

regularly to educate individual investors about our research products,
derivatives market, investment strategies and latest opportunities in
the stock markets. Our senior executives, research analysts and
investment strategists address the audience and personally interact
with the investors.
10
CHAPTER – 2
CAPITAL MARKET
11
 INTRODUCTION
 COMPONENTS OF CAPITAL
MARKET
INTRODUCTION
Capital market deals with long-term funds. It supplies long-term and

medium funds. Capital market deals with ordinary shares, debenture,
bonds and stocks of corporations and securities of the government.
The funds which flow into the capital market come from various
institutions. Capital market provides a market mechanism for those
who have savings and to those who need funds for productive
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investments. It diverts resources from wasteful and unproductive

channels to productive investments. One of the prime indicators in
the growth of capital markets is the growth of joint stock companies
and enterprises.
In 1951 there were 28500 companies with paid-up capital of nearly

Rs.775 crores and as on 31-03-98 there were more than 200000
companies with Paid-up capital of nearly Rs.137959 crores.
COMPONENTS OF THE CAPITAL MARKET
In a capital market, banks and financial institution are important

companies. They act as catalysts in the economic development of
any country. This institution mobilizes financial savings from
households, corporate and other sector of the economy and channels
them into productive investments. They act as a reservoir of
recourses and from the backbone of the economic and financial
system. The main companies of capital market in India are:
1) Primary Market
2) Secondary market
Primary market
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Primary market is also called as new-issue market. The New Issue

market creates financial claims. The New Issue Market deals with
those securities which have been made available to the public for first
time. The new issue of shares is subscribed to the corporate sector
through the application forms before the closing date of the issue.
Secondary Market
The stock exchange, are the secondary markets. They cover public,
private and joint sector by providing facilities for the transferability of
shares held by the public. The stock-exchanges not only effect
purchase and sale of securities but also make a continuous valuation
of securities traded in the market. The stock exchange is a medium of
transfer of recourses for those securities which have already been
issued. The brokers, the investors, mutual funds and the financial
institution are the important constituents of the secondary market
consisting of regional stock exchanges, BSE.
CHAPTER-3
What is script analysis & Sector
14
MEANING OF SCRIP?
MEANING OF SECTORS?
BOMBAY STOCK EXCHANGE
NATIONAL STOCK EXCHANGE
 OTCEI (OVER THE COUNTER
EXCHANGE OF INDIA)
MEANING OF SCRIP
In language of stock market, scrip means the name of the company

by which the company recognizes into the stock market. There were
23 stock exchanges in security market. IN all these stock exchanges,
there were number of scrip in the stock market. But in present these
15
all stock exchanges are merged with NSE AND BSE. So that all
scripts are listed only under two stock changes. In NSE around 1830
scripts of equity are listed and overall 11360 scrip are listed. There is
one another stock exchange otcel (Over the Counter Exchange of
India). It is used only for over the counter trading.
Before a year, when all exchange were separate; then rules and
regulation of listing agreement were different in stock exchanges
such as for the listing in NSE, company has to require more than RS
10 crores net worth and also company has to paid dividend to their
shareholder continuously for last three years. In the BSE there are
listed those companies whose net worth across the RS 1 crore. But at
time when BSE started, only those companies are listed, who are
having more than RS 25000 net worth. Thus, all stock exchanges
having difficult rules and regulations.
These all scrip like, HLL, Infosys, Wipro, Tata Power, TISCO, Nirma,
Reliance Industry etc., are discriminated into various group in
accordance to their turnover, trading volume, net worth, Traders, etc.
these are many groups like a group, B1 groups, B2 group, Z group, T
group and in 2005 one another group is added group Severe group
having different features for holding scrip like
GROUP a having some features are as follow:

 The share should be fully paid –up
 The company’s paid up capital should be at least rs 5 crore
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 The number of share holder must be more than 20000

 The company’s shares should have market capitalization of at
least rs 10 crore
 The company should be a growth potential
GROUP Bhai shares those which are first listed will be kept in non
specified. None specified groups split into b1 and b2 groups. The
carry forward facility is not available to group b shares.
GROUP C only for odd lots deal. Only standard trading units i.e.,
prescribed round lots are traded on stock exchange.
MEANING OF SECTOR
The manufacturer of the some products is come together and
establishes of homogeneous groups and this group is called an
industry which is particular sector. There are many companies or
scrip that manufacturer the same products provide services are
comes and specified under the particular name that is called sector.
E.G. HLL specified under the FMCG sector, Infoysys, Wipro under
the IT sector.
There are many sectors in which many types of scrip are listed. Few
sectors among these are as follows.
 Software Sector
 Banking Sector
 FMCG Sector
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 Power Sector
 Garment Sector
 Automobile Sector
 Cement Sector
 Petrochemicals Sector
 Telecommunication Sector
 Pharmaceutical Sector
 Shipping Sector
 Agriculture Sector
 Steel Sector
 Fertilizer Sector
 IN all sector number of scrip are listed so it is easier to find out
any particular scrip from the market.
BOMBAY STOCK EXCHANGE (BSE)
The Sock Exchange Mumbai, popularly known as “BSE” was

established in 1975 as “The Native Share and Stock Brokers
18
association”. It is the oldest one in Asia, even older than the Tokyo
stock exchange, which was established in 1878. It is a voluntary non-
profit marking Association of Persons (AOP) and is currently engaged
in the process of converting itself into demutualised and corporate
entity. It has evolved over the years into its present status as the
premier Stock Exchange in the Country to have obtained permanent
recognition in 1956 from the Govt. pg India under the securities
Contracts (Regulation) Act, 1956.
The Exchange, while providing an efficient and transparent market for

trading in securities, debt and derivatives upholds the interests of the
investors. And ensures redressed of their grievances Board having
20 directors is the apex body, which decides the policies and
regulates the affairs of the exchange. The Governing Board consists
9 elected directors, who are from the broking community (one third of
them retire ever year by rotation), three SEBI nominees, six public
representatives and an Executive Director & Chief Executive Officer
and a Chief Operating Officer. The Executive Director as the Chief
Executive Officer is responsible for day-to-day administration of the
exchange and he is assisted by the chief operating considers judicial
& quasi matters in which the Governing Board has powers as an
Appellate Authority, matters regarding annulment of transactions,
admission, continuance and suspension of member-brokers,
declaration of a member-broker as defaulter, norms, procedures and
other matters relating to arbitration, fees, deposits, margins, and
other monies payable by the member-brokers to the exchange, etc.
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Turnover on the Exchange

 The average daily turnover of the Exchange during the financial
year 2000-2001 (April-March) was Rs.3984.19 crores and the
average number of daily trades was 5.69 lakhs.
 The average daily turnover of the exchange in the subsequent

two financial years, i.e., 2001-02 & 2002-03, has declined
considerably to Rs. 1248.15 crores and Rs. 1251.29 crores
respectively.
 The average number of daily trades recorded during 2001-02

and 2002-03 numbered 5.17 lakhs and 5.63 lakhs respectively.
NATIONAL STOCK EXCHANGE (NSE)

With the liberalization of the Indian economy, it was found inevitable
to lift the Indian stock market trading system on par with the
international standards. On the basis of the recommendations of high
powered Pertain Committee, the national Stock Exchange was
incorporated in 1992 by Industrial Development Bank of India (IDBI),
Industrial Credit and Investment Corporation of India (ICICI),
Industrial Finance Corporation of India (IFCI), all Insurance
Corporations, selected commercial banks and others.
Trading at NSE can be classified under two broad categories:
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(a)Wholesale market and

(b)Capital market.
Wholesale debt market operations are similar to money market

operations- institutions and corporate bodies enter into high value
transactions in financial instruments such as government
securities, treasury bills, public sector unit bonds, commercial
paper, certificate of deposit, etc.
There are two kinds of players in NSE:
(a)Trading members and

(b)Participants.
Recognized members of NSE are called trading members who

trade on behalf of themselves and their clients. Participants
include trading members and large players like banks who take
direct settlement responsibility.
Trading at NSE takes place through a fully automated screen

based trading mechanism which adopts the principle of an order-
driven market. Trading members can stay at their offices and
execute the trading, since they are linked through a
communication network. The prices at which the buyer and seller
are willing to transact will appear on the screen. When the prices
21
match the transaction will be completed and a confirmation slip will

be printed at the office of the trading member. NSE has several
advantages they are as follows:
 Investor can trade at the same price from anywhere in the

country since inter-market operations are streamlined
coupled with the countrywide access to the securities.
 Delays in communication, late payments and the

malpractice’s prevailing in the traditional trading mechanism
can be done away with greater operational efficiency and
informational transparency in the stock market operations,
with the support of total computerized network.
Unless stock markets provide professionalized service, small

investors and foreign investors will not be interested in capital
market operations. And capital market being one of the major
sources of long-term finance for industrial projects, India cannot
afford to damage the capital market path. In this regard NSE gains
vital importance in the Indian capital market system.
OVER THE COUNTER EXCHANGE OF INDIA (OTCEI)
The traditional trading mechanism prevailed in the Indian stock

markets gave way to many functional inefficiencies, such as, absence
of liquidity, lack of transparency, unduly long settlement periods and
22
benami transactions, which affected the small investors to a great

extent. To provide improved services to investors, the county’s first
ringlets, scripless, electronic stock exchange – OTCEI – was created
in 1992 by country’s premier financial institutions – unit trust of India
(UTI), industrial credit and investment corporation of India (ICICI),
industrial development bank of India (IDBI), SBI capital markets,
industrial finance corporation of India (IFCI), general insurance
corporation and its subsidiaries can bank financial services.
Trading at OTCEI is done over the centers spread across the

country. Securities traded on the OTCEI are classified into:
• Listed securities – the shares and debentures of the companies

listed on the OTC can be bought or sold at any OTC counter all
over the country and they should not be listed anywhere else
• Permitted securities – certain shares and debentures listed on
other exchanges and units of mutual funds are allowed to be
traded
• Initiated debentures – any equity holding at least one lakh
debentures of particular scrip can offer them for trading on the
OTC.
OTC has a unique feature of trading compared to other traditional
exchanges. That is, certificates of listed securities and initiated
debentures are not traded at OTC. The original certificate will be
safely with the custodian. But, a counter receipt is generated out at
the counter which substitutes the share certificate and is used for all
transactions.
23
In the case of permitted securities the system is similar to a

traditional stock exchange. The difference is that the delivery and
payment procedure will be completed within 14 days.
Compared to the traditional exchanges, OTC exchange network

has the following advantages:
• OTCEI has widely dispersed trading mechanism across

the country which provides greater liquidity and lesser risk
of intermediary charges.
• Greater transparency and accuracy of prices is obtained
due to the screen-based scrip less trading.
• Since the exact price of the transaction is shown on the
computer screen, the investor gets to know the exact
price at which s/he is trading.
• Faster settlement and transfer process compared to other
exchanges.
• In the case of on OTC issue (new issue), the allotment

procedure is completed in a month and trading
commences after a month of the issue closure, whereas it
takes a longer period for the same with respect to other
exchanges.
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Thus, with the superior trading mechanism coupled with information

transparency investors are gradually becoming aware of the
manifold advantages of the OTCEI.
Debentures are not traded at OTC. The original certificate will be

safely with the custodian. But, a counter receipt is generated out at
the counter which substitutes the share certificate and is used for all
transactions.
In the case of permitted securities, the system is similar to a

traditional stock exchange. The difference is that the delivery and
payment procedure will be completed within 14 days.
Compared to the traditional exchanges, OTC exchange network has

the following advantages:
OTCEI has widely dispersed trading mechanism across the county

which provides greater liquidity and lesser risk of intermediary
charges.
Greater transparency and accuracy of prices is obtained due to the

screen based scripless trading.
Since the exact price of the transaction is shown on the computer

screen, the investor gets to know the exact price at which she is
trading.
25
Faster settlement and transfer process compared to other

exchanges.
In the case of an OTC issue the allotment procedure is completed in

a month and trading commences after a month of the issue closure,
whereas it takes a longer period for the same with respect to other
exchanges.
Thus, with the superior trading mechanism coupled with information

transparency investors are gradually becoming aware of the
manifold advantages of the OTCEI.
CHAPTER-4
Fundamental analysis of FMCG and IT
26
Economic analysis
Industry analysis
Company analysis
ECONOMIC ANAYASIS OF FMCG
Inflation
After remaining on a southward curve for 15 weeks, wholesale price
index (WPI) based inflation rose to 4.95 per cent in the week ended
27
26 February, as against 4.85 per cent (a 9 month low) in the previous

week. The rise in the inflation level during the week was on account
of costlier manufactured items including edible oils. Also, the decline
in inflation in the corresponding week last year was responsible for a
base effect impact on inflation. After remaining above 6 per cent in
January and February 2004, WPI-based inflation had fallen to 5.21
per cent in the corresponding week last year.
Manufacturing inflation has not gone up at 4.2 per cent but inflation in
primary articles is at 1.7 per cent and primary food is at 3.1 per cent
during the week.
Inflation is expected to rise in march-may 2005, because of the low

base effect of last year’s inflation. In 2004-05, the government has
taken a number of steps, including cutting excise and customs duties
on certain products, raising the cash reserve ratio for banks and
allowing additional supply of sugar in the market in order to curb
inflation.
The rise in the index for manufactured product s was driven by a rise
in prices of food products.
Prices of rice bran oil rose 13 per cent, salt by 8 per cent, imported
edible oil by 3 per cent.
Government Policy
28
Reduction in corporate tax help although it’s accomplished by

decrease in the depreciation rates, as most companies in the FMCG
sector nave low asset base.
Five year tax holiday for new food processing units in fruits and
vegetable processing along with other benefits in budget 2004-05 has
bolstered the government resolution of encouraging growth in this
sector.
GDP
The GDP growth for the current year been projected at 6.9 %
outperforming the estimates of the economic agencies. The
agricultural production is expected to grow by a lower 1.1 % however
the fall in agricultural production will be made up by the higher
manufacturing growth of 8.9%.
ECONOMIC ANALYASIS OF IT
INDIA’S STRENGTH IN IT SECTOR
 Large growth potential
29
 Increasing outsourcing trend
 Export and global outsourcing will drive future growth
 Leveraging India advantages
 Rapidly improving infrastructure
 Indian technology production companies have demonstrated

capabilities to compete in the global market.
Government Policy
The duty cuts on telecom hardware and fiber will have a minimum
impact.
The new fringe benefits tax has been introduced at the rate of 30 %
of a specified portion of various benefits. It’s an irritant as it’s parable
by the employer.
NASSCOM, MAIT and other research firms such as IDC that suggest
that the industry could grow at CAGR of 40 % between now and
2008.
30
It is estimated that by March 2005 the IT industry will be worth a cool

$ 28.2 billion (RS 12080 crore) and the industry is expected to by 25-
30 % annually over the next year.
IT companies are happy at the importance given to the infrastructure

development by the government and the announcement that 7 million
jobs will be created by the IT sector 2009.
31
INDUSTRY ANALYASIS OF FMCG
AN-OVERVIEW
Fast moving consumer goods (FMCG) companies makers have

accelerated growth rate, both urban and rural markets, with small
towns driving growth in the markets. While the industry recorded an
annual growth in the of 3.4% in 2004, the quarter ended November,
2004 witnessed a growth of 6.2%. The top ten companies registered
sales of RS 33316 crore and the net profit is RS 3969 crore. The
FMCG major reported a 1% increase in its domestic FMCG sales to
2225 crore in the quarter ended December, 2004.
A part from these all the top ten companies’ give its best performance
sustained growth in net profit. In other way the HLL recorded a
growth higher than that of the industry average. While the ITC, nirma,
and nestle (I) success to hold its position in top.
In terms of the OPM (operating profit margin) its quite good

performance by nestle (I), ITC, and HLL and other way nirma, dabur
are just fall in compare to other companies in the industries.
FMCG major ITC glow again because its OPM improved significantly
to 36.9% and net profit continuously increase and reach to RS 1371
crore. While the nestle (I) sunshine performance in 2004 and OPM
improved 19.5%, net profit reaches to RS 206 crore.
32
The improve growth has encouraged companies like: HLL, dabur,

nirma, nestle, P&G to hike the price of detergent because of spiraling
inputs costs without fearing a negative impact. In calendar 2004
heavyweight categories like, biscuits grew by 9.9 % in volume terms,
shampoo by 7% and toothpastes by 7% while detergent grew 2.3%
for the quarter ended nov.2004 soaps grew by 5% against an
Annual growth of 1.3 % while biscuits grew by 11 % and shampoo

grew by 12 % with the very good monsoon in most of the part of the
country was helpful for Growth in the FMCG. But the effect of the
current Year monsoon and surcharge may prove injuries to the
tobacco companies well as increase the price of raw – material is
expected to be realized in the subsequent quarter and mainly in the
next fiscal.
33
Factor affecting FMCG Industry
Product line
The most of the FMCG companies have shifted manufacturing

operation to tax-exemption Zones. On an average most companies
have cut advertising expenses, which seems to have been a focus
area for cost reduction.
Demand and supply condition

According to the analyst the innovation in the industry have been
more in 2004 across categories compared to the previous year. For
the sample operating profit ahs actually declined 3.4 % and margin
have fallen to 21.8 % from 23.9%.
Raw Material and higher input costs.

Prices of both liner alkyl benzene (LAB) and soda ash have been
firming up. Sugar and wheat flour prices key raw materials for food
companies, have been increasing sharply. The prices of veritable oils
declined during the quarter but were higher compared to the
corresponding quarter last year. Prices of some raw materials like
copra, safflower and sunflower have eased down. Milk prices have
started softening from 2005 and are expected to remain flat up to
Mar-apr 2004 but may witness some increase in the summer months.
34
Total raw material costs increased by 11% during the quarter due to
higher price of chemical and packaging material.
The higher depreciation tag also points to new plants being

commissioned. Thus, the profit growth of FMCG companies is being
driven largely by their core business and other income has ceased to
an important contributor to net profit margins. The improved growth
has encouraged companies like HLL and P & G to hike prices of
detergents following spiraling input costs without fearing a negative
impact on consumer demand.
35
INDUSTRY ANALYSIS OF IT
AN-OVERVIEW
The Indian software industry has grown rapidly since the 1980s, with
revenues increasing from less than $ 100 million in 1985-86 to nearly
$ 8.4 billion by 2000-01. During this period, exports grew even faster,
with their share increasing from less than a third to nearly three
quarters of revenues. This essay will analyze the domestic conditions
under which this export led industry has grown.
Although global demand for software, sustained by the PC,

networking and internet revolutions of the 1970s, the 1980s and the
1990s respectively, played an important role in facilitating the growth
of the Indian industry, it was also available to other countries. India’s
main software market, India is hardly unique in possessing such labor
force characteristics. Indeed, global demand and the availability of
high skill, low wage workface are necessary, but not sufficient
condition. If they were sufficient conditions, one must explain why
India failed to take similar advantage, unlike her East Asian
counterparts such as Taiwan, South Korea and increasingly China, of
the globalization of semiconductor design and manufacturing since
the 1960s. In other words, the growth of India’s software industry
must be explained in terms of how shifting domestic policy conditions
allowed her to take advantage of global demand and her labor force
36
characteristics to become, along with Israel, the leading software

exporter by the end of the millennium.
Important large software players such as Infosys Wipro, satyam

Computer Services managed to beat the market expectation and
continuously grow. The important thing is stay in top of the computer
software company’s current ranking. Other big fishes Patni Computer
Systems, Emphasis BFL try to improve its position in industry and win
the confidence of investors.
Through the 107 large and small software companies managed to

see an improved sales growth in compare to just 34 companies are
under expectation and it’s near about 32%.
Out of all the 8 large computer software companies managed to see

an improved sales growth and reach to Rs. 15363.1 crore. Their
OPM have just increase from 26.2 % to 27.0 %.
Budget 2006 has all the ingredients for growing the domestic IT
market faster, the government focus on rationalization of custom duty
is positive step to stimulate domestic demand. The government
decision to hike teledensity across all villages by 2007 will positively
impact connectively, helping rural Indians to be part of the digital
revolution.
37
Industry Structure
The Indian software industry, a high growth sector, is fragmented,

with the top 10 Players accounting for less than 20 percent of the
total industry size in 2001. The IT Services industry is characterized
by players of varying sizes, providing solutions to Myriad verticals,
the Indian software and services industry had around 2,810
companies Operating within its domain.
The structure of the industry can be gauged from the following

table:
Annual turnover No.of

companies
Above Rs.1000 crore 5
Rs.500 crore- Rs. 1000 crore 5
Rs.250 crore- Rs . 500 crore 15
Below Rs. 10 crore 2,483
(Sources : www.nasscom.org)
Sunrise Industry and the Growth for the Millennium
38
 A growth of 20.4 % in rupee terms and 28 % in dollar terms

in exports during 2003- 04
 Achieved a CAGR of 30 % in turnover and 37 % in export

during last 5 tears.
 IT exports likely to grow by 26-28 % in dollar terms during

2004-05.
 Indian Industry Grow at over 32 % CAGR between 1999

and 2004.
Key factors behind growth in exports are:
 US IT investment boom
 Onsite staff supplementation growth fuelled by major

technology waves
 Offshore growth led by anchor MNC customers
 New emerging service lines (R & D services, BPO)
Significant Strengths in R & D
39
 175 of the Fortune 500 companies have R&D operation in

India
 A vast network of state-owned national research

laboratories
Provides world-class support
 IT R&D services currently account for more than 15 % of

total
IT exports.
Opportunity in Software Sector
YEAR 2008
Market
IT Service Export $28-30 bn
Software products $ 8-11 bn
IT Enabled Service $21-24 bn
Domestic Market $13-15 bn
Total $70-80 bn
Export $57-65 bn
(Sources : www.met.gov.in)
Strong Performance and Growth Potential
CAGR: 96-97 to 02-03: 24 % 02-03 to 08-09: 24 %
40
By 2008, India will build a US $ 40 billion Electronics Hardware

Industry
IT industry by the year 2008 IT export 35 % of India’s Total Export in

2008 from 21.3 % during 2003-04 Share of IT Software & Services
Industry in GDP IT Export Likely to be 7 % of GDP in 2008 From 2.64
% of GDP during 2003-04
Company Analysis
FMCG COMPANIES
ABOUT HLL
41
Hindustan lever ltd is the subsidiary of unlived Plc. Which holds a

53% stake in the company? It is India’s largest FMCG Company, with
a dominant presence in almost all consumer categories. The
company’s turnover at RS 100 bn is nearly half of the total branded
FMCG business in India. HLL’s brand equity remains unrivalled in
India.
The company has a diversified portfolio with products ranging from

personal and household care to foods and beverages to specially
chemicals. The company has a commanding market share in most
classes it operates, such as toilet soaps, detergents, skincare, hair
care, color cosmetics, etc. It is also the leading player in food
products such as packaged tea, coffee, ice cream and other culinary
products. The company divested its non core business and has
focused on FMCG in recent years. The non-FMCG business now
contributes only 8% to its revenues.
The revival in the FMCG markets after two years of
decline should augur well for HLL achieving top line growth. This
coupled with the recent price hike should lead to marginal
improvement in margins. The new ventures of water and salon
business are still in their nascent stages. Therefore, any incremental
increase in profitability will be form the HPC and beverages business.
INTERPRITATION
The FMCG major reported a 1 % increase in its domestic FMCG

sales to Rs 2225 crore in the quarter ended Dec., 2004 and a 36%
decline in profit an after tax to Rs. 357.6 Crore in the same period.
42
Prices in three major product segment – detergent, shampoo and

toothpaste – in which HLL operates have been brought down. The
reason was competition but the effect was quick rise in volume and a
reduction in the volume promotion the company was offering. The
only category that seems to have done well is that of beverage where
both tea and coffee are doing much batter and sales have risen.
About Nirma Limited
In scorching heat of 1969, a son of small-time farmer was trying to

mix Soda Ash and few other intermediaries, to make a detergent
produce. He was a qualified Science graduate and was working as
junior chemist in government laboratory. As a moonlighting activity,
he was making detergents in the 100 sq. ft back yard of his home,
using bare hands and bucket. Once the mixture is ready, he used to
pack them in polythene bag and was selling door-to-door. Gradually,
the product become well accepted in the consumer community, and
the rest is known to one and all… this is a success saga of a first
generation entrepreneur, on his way to create history in the Indian
marketplace – that was dr. karsanbahi Patel.
In a short span, he captured the domestic market, with a quality

product. He swiftly crafted low-to-medium consumer pockets – a
whole new consumer segment for detergent category. He took on
mighty multi-nationals and rewrote the marketing rules. In true sense,
he spearheaded the market revolution by offering innovative, ‘value-
43
for-money’ products, and changed the cloth-washing habit of Indian

housewives-the revolution called …nirma”
Nirma, the proverbial ‘rags to riches’ saga of dr. karsanbahi Patel, is a

classic example of the success of Indian entrepreneurship in the face
of stiff competition. Starting as one-man operation in 1969, today, it
has about 14,000 employee-base annual turnover is above Rs 25, 00
crore.
In a short apan, nirma created an entirely new market segment in

domestic marketplace, which is, eventually the largest consumer
pocket and quickly emerged as dominating market player – a position
it has never since relinquished.
The performance of Nirma during the decade of 1980s has been

lapelled as’ Marketing Miracle’ of an era. During this period, the
brand surged well ahead its nearest rival – Surf, which was well –
established detergent product by Hindustan Lever. It was a severing
battering for MNC as it records a sharp drop in its market value.
Nirma literally captured the market share by offering value based
marketing mix of four p’s that is Perfect match of product, Price,
Place and Promotion.
IT COMPANIES
Dreamt by a diminytive gentlement from IIT Kanpur and cofounded by
six other bodies in pune, the company is the epitome of excellence
44
and still continuing dreamj run of Indian companies in market all over
the world.
Mr N.R. Narayanmurthy dreamt by delivering world-class software

from Indian to clients worldwide. Mr Murthy six other colleagues
including the current CEO Nandan Nilekani strated Infosys in 1981.
The decade still 1991 was through although Infosys’s first
international; offices was opened in 1987 in USA. But in the early
nineties with liberalization of Indian economy. Infosys get the real
opportunity to grow globally . It grabbed the opportunity with alacrity
and never looked back since. Even during the last two year’s IT
meltdown, Infosys continued to grow.
It will be unrelieved by to Know that in 1991 after ten years in

existence , gross revenue of Infosys stood at a mere Rs 5 crore all of
ot of it came from really low-end piecemeal work. The suddenly the
company went public in 1992. The twelve year since have seen
Infosys growing from Rs 5 crore to Rs 3622 crore. And they have to
prove that shown how business should be done in India. In 1993, the
company heads its IPO of Rs 1.37 million shares at premium of rs
120.85. The fund was used to set up a new software development
facility at the Banglore city Financial Institution and Corporation.
Today more then 17000 employees in organization with rank no 1 the

“ Best Employer in Indian 2002 “ survey conducted by Hewitt
Associates for the Second consecutive year and first rank in
Business World’s survey of India’s most respected Company”.
45
This is Infosys. A faith that Indian also can make MNCs.
Infosys is the first Indian company to be listed on NASDAQ. Infosys

entered NASDAQ at $34 shooting up to an amazing $250 by the end
of the day.
For the future expansion , Infosys is focusing on financial products

and Avionics among other areas. The company’s product-FINACLE is
an intergrated core banking solution which is centralized multi-
currency and multi lauguage enabled software.
INTERPRITATION
In the software Industry the Infosys Tech. Ltd Is big name and
it’s directly and indirectly. In 2003 the net sales of the company wae
Rs 362226.90 million and in 2002 it was Rs 26035.90 it is clearly
shown that company’s net sales increase in 39.14% compare to the
last year. Equity Dividend Rate Was also increased to 400% to 540%
. The net profit of the company in 2003 also increased to 18.56%.
Abount Satyam Computer Service Ltd.
Satyam Computer Service Ltd (SCSL) is a leading global service

company , offering a wide a wide array of solution customized for a
46
key vertical and horizontals. From strategy consulting right through to

Implementing IT solution for customer , Satyam straddles the entire
IT space. It has excellent domin competencies in verticals such as
Automotive, Banking and Financial Service, Insurance and Helthcare,
Manufacturing , Telecom-Infrastructure-Media-Entertainment-
Semiconductors(TIMES). As a driverse end-to-end IT Solutions
provided, satyam offers a range of expertise aimed at helping
customers re-engineer and re-invent their business to compete
successfully customers ever-changing marktplace.
SCSL to report that the company has achieved Net Sales of Rs

20236.51 million in corporate to the one year before it was 17319.43
million . The company growth was driven by a double digit offshore
volume increase and stable prices. Revenue for quarter three in 2004
of Rs 891.26 crore was better than the guidencde of Rs 886 crore
EPS AT Rs 5.49 was highest than the guidance of Rs 5.47.
At Present , company have 372 active customer including 139

Fortune Globle 500 and forture US 500 corporations. Company
believe that the proporation of such customer to our total customer
base is one of the highest in the industy, reflectinthe strong brand.
Satyam has been ranked amongst the top 10 employers in India by
the CNBC.
INTERPRETATION
47
With customer IT Budgets expected to grow at a rate higher than last

year, the company believes that they are in a strong position to
garner a larger share of their IT spending . In light of the improved
prospects and better-than-expected performance for the current
year . Company revising revenue guidance upwards for fiscal 2005.
Company expectes revenue between Rs 3429 crore and Rs 3433
crore , implying an annual growth of Rs 34.9% to 35.1%.
48
CHAPTER - 5
TECHNICINAL ANALYSIS OF FMCG & IT

COMPANIES
49
FINANCIAL HIGHLIGHTS OF HLL
Year 2002 2003 2004

Gross Sales (Rs. Millions) 11781 10952 11096
By segment % of Sale
Soap ,Det Hou.hold care 40 45 44
Per. Prod 21 22 24
Food 33 30 29
Cham. , Agri., Fer. 3 2 2
Others 3 1 1
EBIT as % of Sales 14.0 17.6 18.4
Fixed Assents Turn Over 8.9 8.3 8.1
E.P.S of Rs. 1 @ 7.46 8.04 8.05
D.P.S of Rs 1 @ 5.0 5.5 5.5
PAT/Net Sales (%) 13.1 15.8 16.3
R.O.C.E (%) 62.4 59.4 60.2
R.O.N.W. (%) 53.9 48.4 82.8
INTERPRETATION
Looking at the growth pattern, the year 2001 was excellent , but year
2002 looks in is unfortunate for company because of poor economic
performance of country in that year but now FMCG company HLL
continuous grow and achieve its objective successfully. The
company’s Gross Sales grow just 1 % in 2003. However PAT is
Continuous to grow regardless sales effect which sounds good for
company. The personal care product sales increase near about 9 %
in the year 2003. EPS of the company was just fall 0.01% in 2002
50
EPS increased in 0.58 %. RONW increase 82.8 5 to 48.4%, it means

71.07 % in year 2003.
HLL STOCK PRICE INDEX
INTERPRETATION
Hindustan Lever (HLL)’s face value of the share Rs 1. The average
Capitalization of the company is Rs.32171 crore. The current price of
the one share is Rs 248. The average daily trading volume of share in
T+2 bases is 590955, the EPS of the 2003 is Rs 2.33 in Q2-2004 it
was decreased to Rs 40.36 % and again Q3-2004 it was decline to
Rs 0.66 but after that period now in company make profit and EPS
increase to Rs 1.42 it means increase in 115.15% in last quarter in
2004. The FII holding in company because FII play vital role in the
market and continuously buying the share.
NIRMA FINANCIAL HIGHLIGHTS
(Rs Millions)
PARTICULARS 2004 2003 2002
Sales 22,067.20 20,505.50 19302.00
Stock Adjustment 113.00 213.00 165.10
Raw Material Consumed 12,387.60 11,571.20 10,709.70
51
Power And Fuel 1,812.10 1,795.60 0.00

Employee Expenses 409.90 410.30 376.60
Other Expenses 1,841.30 1,614.60 3,065.80
Total Expenses 16,563.90 15,604.80 14,317.20
Operating Profit 5,503.30 4900.70 4984.80
Other Income 260.90 239.60 183.90
Total Interest 438.20 559.10 1,057.30
Net Depreciation 1,555.70 1,250.30 1222.90
Tax 1320.30 1038.60 1036.80
Net Profit/Loss 2468.00 2292.30 1853.70
Extra Ordinary item 0.00 -139.80 0.00
Prior Year Adjustment 0.00 0.00 -6.60
Adjustment Net Profit/Loss 2468.00 2152.50 1847.10
Equity Capital 793.80 793.80 793.80
EPS (Rupees) 31.09 27.12 23.27
Equity Dividend Rate (%) 40.00 0.00 35.00
OPM (%) 24.93 23.89 25.82
NPM (%) 11.18 10.49 9.56
INTERPRETATION
From the above company’s sales in RS 22067.20 millions in 2004,
Last year it was Rs 20505.50 millions. The Increase in compare to
last year is 7.61 %. The total expenses of the company are increase
6.15 % in 2004 in compare to the next year. The total net profit of the
company is 2468.00 millions it is increase to 14.66%. The EPS of the
company is increase to Rs 3.97 in 2004. So we are see that in future
the company’s net Profit is increase with the same the EPS Rate is
also increase’s and investor get more benefit from the company.
NIRMA LTD. STOCK PRICE INDEX
52
INTERPRETATION
Nirma ltd was value of the share is Rs 10. The average Capitalization
of the company is Rs 2658.83 crore. The current price of the one
share is 344.95. The average daily trading volume of share in T+2
bases and it is 2993, the difference of the one year 128 points. EPS
of the Q1-2004 was Rs 8.31 in Q-3-2004 it was Rs 5.73 it means
decrease in 45.02 % during six months. The Beta of the company is –
0.29. Looking at the graph pattern stock look very range bound and
as FMCG entertaining rural market, Nirma share has high potential to
grow.
53
Dabur Financial Highlight

(Rs. Millions)
Sales 11,479.80 12,323.00 11,631.90
Stock Adjustment 257.80 35.90 -168.60
Raw Material Consumed 2,147.80 2,328.40 2,234.70
Power And Fuel 0.00 0.00 0.00
Employee Expenses 703.10 882.60 774.60
Admin And Selling 1,549.50 1,549.40 0.00
Expenses
Other Expenses 5,571.20 6,263.20 7,725.40
Total Expenses 10,229.40 11,059.50 10,566.10
Operating Profit 1,250.40 1,263.50 1,065.80
Other Income 110.50 83.00 138.70
Total interest 69.00 170.80 239.50
Net depreciation 157.50 220.40 209.90
Tax 122.40 104.30 110.70
Net Profit/Loss 1,012.00 851.00 644.40
Extra ordinary item 0.00 0.00 0.00
Prior Year Adjustments 0.00 0.00 0.00
Adjusted Net Profit/Loss 1,012.00 851.00 644.40
Equity capital 286.20 285.70 285.60
EPS(Rupees) 3.54 2.98 2.26
OPM (%) 10.89 10.25 9.16
NPM (%) 8.81 6.90 5.53
INTERPRETATION
From above financial performance we can see that the sales of the
company decrease of Rs. 11479.8millions Due to very sharp
competitive market. The sales decrease by 6.85% as compare to the
text year. The EPS of the Company in 2004 increase Rs.3054. Even
though the company sales decline the other side the company’s EPS
54
Continuously increasing so it’s good for the investor their money in

particular company scrip because deserved Sale has minimal impact
on EPS.
DABUR (1) STOCK PRICE INDEX
(Sources: www.indiainfolin.com)
INTERPRETATION
Dabur (1) Ltd. Face value of the share in Rs.1. the average
capitalization of the company is Rs.3433.94 crore The current price of
the one share is Rs.119.90. the total share issued by the company
28.64 millions. The average Daily trading volume of shares in T+2
bases and it is 69021. The EPS of the Q1-2004 was Rs.0.93 but in
Q3-2004 It was increase to 62.37 %. The FII holding in company is
55
4.57%. The beta of the company is 0.54.Sine 6-04 stock has long ball
run e.g. share is steadily growing which show good prospects of
company in market.
INFOSYS FINANCIAL HIGHLIGHT
(Rs. Millions)
PARTICULAR 2003 2002 2001
Sales 36,226.90 26,035.90 19,005.60
Raw Material Consumed 0.00 0.00 0.00
Employee Expenses 16,771.20 11,178.70 0.00
56
Admin And Selling 5,373.50 3,441.40 2,648.90

Expenses
Other Expenses 1,361.80 1,069.50 8,708.30
Total Expenses 23,744.20 15,659.60 11,510.10
Operating Profit 12,482.70 10,376.30 7,495.50
Other income 996.10 664.10 593.70
Total interest 0.00 0.00 0.00
Net depreciation 1,889.50 1,606.50 1,128.90
Tax 2,010.00 1,354.30 727.10
Net Profit/Loss 9,579.30 8,079.60 6,233.20
Adjusted Net Profit/Loss 9,579.30 8,079.60 6,288.10
Equity capital 331.20 330.90 330.80
EPS(Rupees) 144.62 122.09 95.04
OPM (%) 34.45 39.85 39.43
NPM (%) 26.24 31.03 33.08
INTERPRETATION
From the above financial Performance the company’ s sales

increase to Rs. 36226.9 millions in 2004 which shows net addition
Rs. 10191 mn, last year it was increase top Rs.70303 millions. The
company’ s net profit reached to Rs. 9579.3 millions in 2004.The EPE
of the company in 2003 was 144.62.The future of the company
looking good because it care the investors and regularly give the
dividend to the holder.
INFOSYS TECH. STOCK PRICE INDEX
57
(Sources: www. Indiainfoline.com)
INTERPRETATION
Infosys Teach. Face value of the share is RS. 5. The average

Capitalization of the company is RS.58775.14 crore. The Current
price of the one share is RS.2960. The average daily trading volume
of shares in T+2 bases and it is 158340, The EPS of the Q1-2004
was increase RS.2.16 Q4 -2004 it was increasing sharply RS.5.97, it
means after nine months The EPS increasing 47.23 %. Total share
issued by the company is 41.75% it is crucial for the company
because the FLL continue played role in market and buying the share
of the company so that ultimately price of the share increase And the
investors get the benefit of that buzzing.
58
SATYAM FINACIAL HIGHLIGHTS

RS. (Millions)
Sales 20,236.51 17,319.43 12,199.85
Raw Material Consumed 0.00 0.00 0.00
Power And Fuel 0.00 0.00 0.00
Employee Expenses 9,804.60 7,890.64 4870.08
Other Expenses 4,246.59 3,617.16 2,879.53
Total expenses 14,051.19 11,507.80 7,749.61
Operating profit 6,185.32 5.811.62 4450.24
Other income 278.56 711.53 216.88
Net depreciation 1,241.83 1,174.58 964.60
Tax 616.04 351.33 195.75
Net Profit/Loss 4,598.80 4,901.29 3,161.64
Extra ordinary item - 1,524.58 - 407.53 1,701.25
Prior Year Adjustments 0.00 0.00 0.00
Adjusted Net Profit/Loss 3,074.22 4,493.75 4,862.89
Equity capital 626.09 629.08 562.38
59
EPS (rupees) 9.77 14.29 17.29

Equity dividend rate (%) 150.00 60.00 0.00
OPM (%) 30.56 33.55 3.47
NPM (%) 15.19 25.94 39.86
(Sources: www.indiainfoline.com)
INTERPRETATION
company grow in 2004 of Rs.2917.08 millions. The sales grew 17.84
% as compare to the previous year. The EPS of the company in
decline Rs. 4.52 in compare to 2002.it just because of ESP was
decreased sharply over 32% despite sales growth of 17%.
SATYAM COM.LTD.STOCK PRICE INDEX
60
(Sources: www.indiainfoline.com)
INTREPRETATION
Satyam COM. face value of the share isRs.10.the average

capitalization of the company is Rs.1868...73crore.the current price of
the one share is Rs.818. The average daily trading volume of shares
in T+2 bases and it is 69021.the EPS of the Q1-2005 was Rs.2.33 in
Q2-2005 it was decrease to 40.36% and again Q3-2005 it was
decline to Rs.o.66 but after that period now company make profit and
EPS increase to Rs.1.42 it means increase in 115.15% in last quarter
in 2004.The FII holding in company is 21.50%, it is good for the
company.
61
FINANCIAL HIGHLIGHTS OF WIPRO LTD.
(Rs. Millions)
SALES 51,685.00 40,327.00 34,677.00
Raw Material 8,209.00 7,243.00 7,896.00
Consumed
Employee Expenses 20,495.00 6,424.00 5,084.00
Admin And Selling 7,223.00 5,506.00 4,211.00
Expenses
Other Expenses 4,296.00 10,844.00 7,412.00
Net depreciation 1,516.00 1,380.00 1,419.00
Tax 1,674.00 1,211.00 840.00
Net Profit/Loss 9,149.00 8,395.00 8,661.00
Adjusted Net 9,149.00 8,395.00 8,661.00
Profit/Loss
Equity capital 1,398.00 465.00 465.00
EPS(Rupees) 13.09 34.98 37.25
Equity Dividend Rate 1,450.00 50.00 50.00
(%)
OPM (%) 22.17 25.56 29.05
NPM (%) 17.70 20.16 24.97
(Sources: www.indianinfoline.com)
INTERPRETATION
62
company grow in 2004 of Rs.51685 millions. The net sales grew
28.16%as compare to next year. The EPS of the company in 2004
decline Rs.21.89. The company is habited to put good growth in its
financial statement because of its well diversified product portfolio
e.g. from Agriculture to IT.
WIPRO LTD. STOCK PRICE INDEX
(SOURCES: www.Indiainfoline.Com)
63
INTERPRETATION
Wipro Ltd. Share faces value of Rs. 10. The average

Capitalization Of the company is Rs.4824.38 crore. The
current price of the one share is Rs 541.The average daily
trading volume of shares in T+2 bases and it is 124208, the
EPS of the Ql-2004 was Rs. 3.68 in Q2-2004 it was increase to
21.20 % and again Q3-2004 it was increase to Rs.5.59 it
means 25.33 % increase compare to last quarter but after that
period now company's EPS decrease to Rs. 0.88. The FII
holding in company is 11.25 %.
64
CHAPTER – 6
FINDINGS & LIMITATION
FMGC INDUSTRY
65
With two successive years of under Performance there

emerges an element of circumspection while building expectations
for 2005. Nevertheless, we believe that the pricing environment is
gradually improving for detergent companies.
• While the companies suffered in terms of profitability, the price

war did manage to grow volumes in these categories. The
companies continue to attack costs by either relocating to tax free
zones or looking at various productivity improvement measures.
• Another important development that took place in 2004 was
that most FMCG majors undertook capacity expansion plans. This
has not happened over the past 5 to 7 years. It does point to
improved demand expectation by the sector majors.
• For investors, a key thing to note is that with markets at all time
highs and interest rates looking to strengthen, the equity risk profile
has increased over the short term. In such a scenario, FMCG is likely
to be a good defensive bet. More importantly, expectations of a
demand revival are not factored into most forward projections.
• It is a given that the consuming class pie in India is growing.
While consumer durables and housing have clearly taken a front
seat in the mirror the GDP growth trend over the long term. The
environment will no doubt, continue to be competitive, but volume
growth may more than make up for it for stronger companies.
FINDINGS FOR MOTILAL OSWAL
66
• In Motilal Oswal the computers which is installed by company is

very old so that speed of the computer is very less that's why
the work load of staff is continuous increase.
• The facility which is provided by to client is excellent and it is

found that in annual meeting of broker there is no complaints
was registered by anyone.
LIMITATION
• This project report is prepared for limited two months period.
• This project is concerned with only five companies of both the
Sectors e.g., FMCG & IT.
• Scripts Analysis of this report considers the price fluctuation of
Price only one year.
• Financial data are considered on the base of just last three
Year’s information.
• Whatever assumptions have been taken for scrip analysis may
differ from actual result.
• Market is ultimately driven by sentiments of investors, so even
Good story suggested in report May not work in market.
67
CHAPTER –7
–
SUGGESTION
SUGGESTIONS FOR MOTILAL OSWAL
 There should be reducing wastage of manpower and also office appliance.
 There should be given proper attention of the brokers and other Staff
member's problem and try to reduce it immediately.
 There is no proper department head for watching the activity of the Broker
and staff member so keep one head for monitoring the Activity.
 There should be reducing wastage of manpower and also office appliance.
 There should be given proper attention of the brokers and other Staff
member's problem and try to reduce it immediately.
 There is no proper department head for watching the activity of the Broker
and staff member so keep one head for monitoring the Activity.
SUGGESTION FOR INVESTORS
 The investor should be clear in his objectives of income, capital

Appreciation, short-term or long-term gains etc.
 The success of investors depends on personal preparation, hard Work

involved in the collection of relevant information, Knowledge and research
and analysis.
 After sufficient study and preparation, the investor should act like Rag-
pickers in the market, picking up scrip on a selective basis.
 Investors should as far as possible deal with registered members of

recognized stock exchanges.
Investors should examine carefully the detailed prospectus before

Subscribing to the new issue of companies.
CHAPTER – 8
BIBILIOGRAPHY
BIBILIOGRAPHY
BOOKS
 Prof.V.Gangadhar,Investment Management,1st Edition

 V.K.Bhalla, Investment Management,10th Edition
Magazines & News Papers
 Capital Market-2005
 Economic Times
 Financial Express
Websites
 www.indiainfoline.com
 www.nseindia.com
 www.met.gov.in
 www.nasscom.com

Fundamental Analysis of Scrips &amp Sector

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Fundamental Analysis of Scrips &amp Sector

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FUNDAMENTAL ANALYSIS OF SCRIPS & SECTOR

INTRODUCTION TO MOTILAL OSWAL

Motilal Oswal Securities Ltd.

One of the top-ranking broking houses in India, with a dominant

Motilal Oswal Securities Ltd. was founded in 1987 as a small sub-

The institutional business unit has relationships with several leading

The retail business unit provides equity investment solutions to more

Fund Investment Advisory Services. Its Value PMS Scheme gave a

Motilal Oswal Securities Let’s equity research has been consistently

view unique client needs. As a result, the Capital Market now

MOST GUIDING PRINCIPLES & CORE VALUES.

• Customer interest is paramount

MOST HISTORY & MILESTONES

Services. More in the pipeline.

» Mr. Raamdeo Agrawal starts attending legendary billionaire

of revenue is allocated to research. First Domestic Stock

Mr. Raamdeo Agrawal is the co-promoter of Motilal Oswal Securities

He is respected by all in the research and broking industry for his

MOST management team is regularly engaged in finding ways to

Training & Manpower Development

MOST conducts various training and development programs regularly

MOST Wealth Creation Study and Awards function

MOST Wealth Creation Study and Awards function has become a

Wealth Creation Seminars

MOST conducts Wealth Creation Seminars across the country

Capital market deals with long-term funds. It supplies long-term and

investments. It diverts resources from wasteful and unproductive

In 1951 there were 28500 companies with paid-up capital of nearly

COMPONENTS OF THE CAPITAL MARKET

In a capital market, banks and financial institution are important

Primary market is also called as new-issue market. The New Issue

In language of stock market, scrip means the name of the company

GROUP a having some features are as follow:

 The number of share holder must be more than 20000

BOMBAY STOCK EXCHANGE (BSE)

The Sock Exchange Mumbai, popularly known as “BSE” was

The Exchange, while providing an efficient and transparent market for

Turnover on the Exchange

 The average daily turnover of the exchange in the subsequent

 The average number of daily trades recorded during 2001-02

NATIONAL STOCK EXCHANGE (NSE)

Trading at NSE can be classified under two broad categories:

(a)Wholesale market and

Wholesale debt market operations are similar to money market

There are two kinds of players in NSE:

(a)Trading members and

Recognized members of NSE are called trading members who

Trading at NSE takes place through a fully automated screen

match the transaction will be completed and a confirmation slip will

 Investor can trade at the same price from anywhere in the

 Delays in communication, late payments and the

Unless stock markets provide professionalized service, small

OVER THE COUNTER EXCHANGE OF INDIA (OTCEI)

The traditional trading mechanism prevailed in the Indian stock

benami transactions, which affected the small investors to a great

Trading at OTCEI is done over the centers spread across the

• Listed securities – the shares and debentures of the companies

In the case of permitted securities the system is similar to a

Compared to the traditional exchanges, OTC exchange network

• OTCEI has widely dispersed trading mechanism across

• In the case of on OTC issue (new issue), the allotment

Thus, with the superior trading mechanism coupled with information