Assignment of S.A.P.

M
on
Portfolio Management

Submited to Submited by
Prof. A.S.Chawla Karanvir Kalra(5830)

MBA-II(B)

School Of Management Studies

Punjabi University
Patiala
PORTFOLIO :-

Security Current Proportion Current Expected Expected Contribution

value of current price price holding to portfolio
(1) values of (3) (4) period expected
properties value 6=(5)*(2)
(2) 5=(4)/(3)
Ranbaxy 120000 .2400 440 500 1.136 .2726
Cairn 80000 .1600 344 400 1.162 .185
India
ITC 140000 .2800 168 205 1.22 .3416
POLARIS 60000 .1200 180 220 1.22 .1464
Indusind 100000 .2000 248 310 1.25 .2500
bank
total 1.000 1.1956

Total expected return from portfolio = 19.5%

1. Ranbaxy : INVESTMENT 120000 at price of 440 per share

Expected return approx 22%

share patren
 Bombay StockNational Stock
Month Exchange Exchange
(High) (Low) (High) (Low)
Apr-10 485.00 432.70 485.50 431.70
May-10 469.50 364.20 494.40 403.15
June-10 463.00 414.35 463.50 413.50
July-10 467.95 441.10 467.90 441.00
Aug-10 500.60 434.55 500.70 434.25
Sep-10 579.90 490.00 580.00 489.35
Oct-10 620.55 560.00 616.90 556.35
Nov-10 624.90 530.50 624.20 530.05
Dec-10 599.75 534.00 600.00 532.85
Jan-11 611.75 523.50 611.70 493.70
Feb-11 553.00 428.95 548.00 428.75
Mar-11 475.90 430.40 475.80 430.60

Market trend

Ratio analysis of Ranbaxy (dec2009)

Liquidity And Solvency Ratios

Current Ratio 1.18
Quick Ratio 0.89
Debt Equity Ratio 0.85
Long Term Debt Equity Ratio 0.68

Inventory Turnover Ratio 4.05

Debtors Turnover Ratio 3.74
Investments Turnover Ratio 4.05
Fixed Assets Turnover Ratio 2.00
Total Assets Turnover Ratio 0.66
Asset Turnover Ratio 2.00

Dividend

The Board of Directors of the Company in their Meeting held on February 22, 2011 has
recommended dividend of Rs.2 per equity share for the year ended December 31, 2010, for
approval of the shareholders at the ensuing Annual General Meeting. Post approval of the
shareholders, the dividend will be paid on May 16, 2011.

Share Transfer books for the purpose of dividend will remain closed from April 30, 2011 to May
09, 2011 (both days inclusive).

2. Cairn India (investment 80000 at share price 344)

Since high commodity price is a key reason for rising inflation, investing in companies that
produce natural resources can be a good idea

Expected return 16%

Ratio analysis (march 2010)

Current Ratio 1.85

Quick Ratio 1.84
Debt Equity Ratio 0.04
Long Term Debt Equity Ratio 0.04
1
Debtors Turnover Ratio
.90
Investments Turnover Ratio 3.26

52 weeks high low 376-266

Cairn in news

The group of ministers (GoM) on the Cairn India and Vedanta Resources USD 9.6 billion deal
will be notified shortly, and the first meeting is expected to take place later this week, reports
CNBC-TV18's Nayantara Rai and Aakanksha Sethi. The GoM is likely to submit its report in
two weeks, which should come as a good news for the two companies.
 3. ITC investment 140000 at 168 rs

Share pattern

Ratio analysis(march2010)

Current Ratio 0.92

Quick Ratio 0.39
Debt Equity Ratio 0.01
Long Term Debt Equity Ratio 0.01

Inventory Turnover Ratio 6.04

Debtors Turnover Ratio 24.31
Investments Turnover Ratio 6.04
Fixed Assets Turnover Ratio 1.58
Total Assets Turnover Ratio 1.33
Asset Turnover Ratio 1.58

Itc in news

Prabhudas Lilladher has come out with its earning estimates on consumer staples sector for the
quarter ended March 2011. According to the research firm, ITC March quarter sales are expected
to go up by 16.5% at Rs 5887.7 crore, year-on-year, (YoY) basis.

The company's net profit is expected to go up by 23.2% at Rs 1266.6 crore on YoY basis.

Recommendation (salil Sharma.analysist)

ITC can touch Rs 205 in the next 6 to 10 months time, says Salil Sharma, Technical Analyst,
Kapur Sharma & Co.

Sharma told CNBC-TV18, "As far as ITC is concerned it is a life time high for it. So any share
which is making a life time high definitely is a good buy on any corrective move. The problem
with ITC is that people have got use to getting good percentage gains. Here you can expect to
move up to Rs 180 to at best at Rs 205 in the next 6 to 10 months time. So that is what kind of
test the patience of investors but technically speaking they are one of those stronger shares."
 4. polaris : investment 60000

price 180

expected return 20%

Polaris in news
In Polaris seems a possibility of a good breakout happening. We have not had a weekly closing
above Rs 200-205 levels for the last 12 months. Broadly if you look at about a year’s chart of
Polaris, it’s been sideways range bound kind of a movement of the stock price between Rs 200
and 160. So if we get a closing above Rs 200-205, I think it will be very exciting; the signals are
there."
He further added, "My belief is that it is good stock to accumulate and go long at current levels,
look for targets of Rs 230-235 in the short-term and a stoploss of about Rs 197 should do well
for this stock."
Financials
As On(Months) 31-Dec-2010(3)
Sales of Products/Services 3482.78
Other Income 161.99
Total Income 3644.77
Total Expenses 2979.58
OPBDIT 665.19
Interest 0.54
Depreciation 68.40
Exceptional & Extraordinary Items 0.00
Prior Period Adjustments 0.00
Provision for Tax 83.28
After Tax Profit 512.98
Equity Capital 495.87
Reserves 8682.78
 5. Indusind bank (investment 100000 at share price 248 rs)

Expected return : 20%

Ratio analysis:- (march 2010)

Capital Adequacy Ratio 15.33

Advances / Loans Funds(%) 73.91
Debt Coverage Ratios
Credit Deposit Ratio 74.40
Investment Deposit Ratio 37.86
Cash Deposit Ratio 6.74
Total Debt to Owners Fund 12.35
Financial Charges Coverage Ratio 1.36
Financial Charges Coverage Ratio
1.22
Post Tax

Interest Income / Total Funds 9.91

Net Interest Income / Total Funds 4.09
Non Interest Income / Total Funds 0.63
Interest Expended / Total Funds 5.82
Operating Expense / Total Funds 2.63
Profit Before Provisions / Total Funds 1.94
Net Profit / Total Funds 1.12
Loans Turnover 0.17
Total Income / Capital Employed(%) 10.54

Indusind in news

By putting IndusInd Bank’s (IIB’s) core operating performance back on track through
implementation of various structural changes; management has created a strong platform for the
bank to enter the next phase of growth. The target now is to achieve scale along with
profitability. During FY11-13E, we expect IIB to grow its assets and profitability at a CAGR of
26.5% and 30.8%, respectively.”
“A turnaround in IIB’s core performance has clearly reflected in its return ratios, with return on
average assets (RoAAs) improving from 0.34% in FY08 to 1.45% currently (for the nine month
period). These RoAA’s are likely to expand further to 1.60% by FY13E on account of a)
expected margin expansion (to 3.7-3.8% by FY13E), b) control on credit costs and c) strong
thrust on core fee income. IIB’s asset quality witnessed substantial improvement even during the
crises period despite higher proportion of retail & SME assets. Stiff credit monitoring processes,
focus on recoveries and provision cover at ~70% puts IIB in a comfortable position.”
“Although the current valuations aptly capture the radical transformation seen in IIB’s core
operating performance, we believe the bank is a suitable candidate for further re-rating, given the
top management delivers as per their strategy in the next phase of growth. We observe that the
odds are highly in favour of IIB’s outperformance, given the management’s track record and
their focus on profitable growth. We expect the bank’s earnings to grow strongly at a CAGR of
30.8% during FY11-13E, coupled with further improvement in return ratios. The stock has
corrected by ~19% from its recent peak and provides an attractive entry point at the current
levels. We initiate coverage with ‘BUY’ and a 12-month forward price target of Rs 312 (2.85x
its FY13E ABV),” says Prabhudas Lilladher research report.

Current news

IndusInd Bank to buy Deutsche bank's Indian credit card biz