A STUDY on EQUITY ANALYSIS At INDIA INFOLINE LIMITED (Report submitted to JNTU in partial fulfillment of the requirement for the

award of Master of Business Administration Submitted b! SHAMEEM BEGUM Roll No: 08N31E0048 Under the "uidan#e of Mr. K Har Kr !"#a A!!o$. %ro&'!!or F #a#$'

MALLA REDDY (OLLEGE OF ENGINEERING ) TE(HNOLOGY (Affiliated to JNTU$ %!derabad Se#underabad & '( )**+& )*'*

Equity Analysis

DE(LARATION

, de#lare that this pro-e#t report entitled *EQUITY ANALYSIS+ is ori"inal and bonafide wor. of m! own in the partial fulfillment of the requirements for the award of the De"ree of MASTER OF BUSINESS ADMINISTRATION and submitted to the Department of Mana"ement$ MALLAREDDY (OLLEGE OF ENGINEERING AND TE(HNOLOGY$ Se#underabad/

The data that has been #olle#ted b! me is trul! authenti# and #ontains true and #omplete information/

SHAMEEM BEGUM

Equity Analysis

SUMMARY
The automobile industr!$ one of the #ore se#tors$ has under"one metamorphosis with the ad0ent of new business and manufa#turin" pra#ti#es in the li"ht of liberali1ation and "lobali1ation/ The se#tor seems to be optimisti# of postin" stron" sales in the #ouple of !ears in the 0iew of a reasonable sur"e in demand/ The ,ndian automobile mar.et is "earin" towards international standards to meet the needs of the "lobal automobile "iants and be#ome a "lobal hub/

A detailed anal!sis of Automobile industr! has been #o0ered in respe#t of past "rowth and performan#e/ Under this pro-e#t to better understand the ,ndustr! , ha0e used 2undamental tools to ma.e it more authenti# and meanin"ful/ An e#onom!&industr!&#ompan! (3/,/4 approa#h has been followed under 2undamental Anal!sis whi#h #o0ers effe#t of Re#ession$ the impa#t of inflation$ 2D,5s$ 36port$ and 7D8 et#/ on Automobile ,ndustr!/ The ,ndustr! Anal!sis has been done with the help of S9:T anal!sis and industr! life #!#le/ 2or 4ompan! Anal!sis as a part of 2undamental tool we ha0e under"one with the #omparati0e anal!sis of TATA Motors the leadin" #ompan!$ Maruti Su1u.i ,ndia5s lar"est 4ar manufa#turer and Mahindra and Mahindra alon" with the help of ratio anal!sis/ The fundamental aspe#t #onsists of finan#ial and Non&2inan#ial anal!sis of these #ompanies/ At the end #on#lusion and re#ommendations ha0e been spe#ified so as to ma.e the pro-e#t wor. more meanin"ful and purposeful/

Equity Analysis

A(KNO,LEDGEMENT

A##omplishment of a tas. with desired su##ess #alls for dedi#ation towards wor. and promptin" "uidan#e$ #o&operation and deliberation from seniors/ At the outset$ , would li.e to than. Mr/ ;/ %ari ;rishna$ Asso#iate 8rofessor$ Mallaredd! 4olle"e of 3n"ineerin" and Te#hnolo"! for his support and professional approa#h in "uidin" me throu"h the #areful details of the pro-e#t/ , am 0er! "rateful to m! #ompan! "uides$ Mr/ Subramaniam and Mr/ Asho. who not onl! helped me on this topi# but also helped me to understand the nuan#es of #apital mar.et/ ,n spite of ha0in" a 0er! bus! s#hedule$ the! made sure in e0er! wa! that we a#quire the best possible e6posure and .nowled"e durin" our pro-e#t/ , would be failin" in m! dut! if , do no e6press m! deep sense of "ratitude to Sri ;/R/; Murth!$ %/:/D/ and all the fa#ult! members for their 0aluable ad0i#e and "uidan#e in this pro-e#t/ , am also than.ful to our #olle"e 8rin#ipal$ Dr/</Si0a ;umar Redd!/

SHAMEEM BEGUM

Equity Analysis

(ONTENTS
("a-.'r No. Na/' o& ."' $o#$'-. ,ntrodu#tion Need of the stud! :b-e#ti0es of the stud! , S#ope of the stud! Methodolo"! of the stud! ?imitations of the stud! ,, ,,, ,< < <, <,, Re0iew of ?iterature ,ndustr! 8rofile 4ompan! 8rofile Data anal!sis and interpretation 2indin"s$ Su""estions and 4on#lusion Biblio"raph! %a0' No. ' ) = ( > @ A&)) )=&() (=&>) >=&A= A(&+* +'

Equity Analysis

(HA%TER I 1 INTRODU(TION

Equity Analysis

INTRODU(TION
,ndia is a de0elopin" #ountr!/ Nowada!s man! people are interested to in0est in finan#ial mar.ets espe#iall! on equities to "et hi"h returns$ and to sa0e ta6 in honest wa!/ 3quities are pla!in" a ma-or role in #ontribution of #apital to the business from the be"innin"/ Sin#e the introdu#tion of shares #on#ept$ lar"e numbers of in0estors are showin" interest to in0est in sto#. mar.et/ ,n an industr! pla"ued with s.epti#ism and a sto#. mar.et in#reasin"l! diffi#ult to predi#t and #ontend with$ if one loo.s hard enou"h there ma! still be a "enuine aid for the Da! Trader and Short Term ,n0estor/ The pri#e of a se#urit! represents a #onsensus/ ,t is the pri#e at whi#h one person a"rees to bu! and another a"rees to sell/ The pri#e at whi#h an in0estor is willin" to bu! or sell depends primaril! on his e6pe#tations/ ,f he e6pe#ts the se#urit!Bs pri#e to rise$ he will bu! itC if the in0estor e6pe#ts the pri#e to fall$ he will sell it/ These simple statements are the #ause of a ma-or #hallen"e in fore#astin" se#urit! pri#es$ be#ause the! refer to human e6pe#tations/ As we all .now firsthand$ humans e6pe#tations are neither easil! quantifiable nor predi#table/ ,f pri#es are based on in0estor e6pe#tations$ then .nowin" what a se#urit! should sell for (i/e/$ fundamental anal!sis be#omes less important than .nowin" what other in0estors e6pe#t it to sell for/ ThatBs not to sa! that .nowin" what a se#urit! should sell for isnBt important&&it is/ But there is usuall! a fairl! stron" #onsensus of a sto#.Bs future earnin"s that the a0era"e in0estor #annot dispro0e 2undamental anal!sis and te#hni#al anal!sis #an #o&e6ist in pea#e and #omplement ea#h other/ Sin#e all the in0estors in the sto#. mar.et want to ma.e the ma6imum profits possible$ the! -ust #annot afford to i"nore either fundamental or te#hni#al anal!sis/

Equity Analysis

NEED OF THE STUDY

To start an! business #apital pla!s ma-or role/ 4apital #an be a#quired in two wa!s b! issuin" shares or b! ta.in" debt from finan#ial institutions or borrowin" mone! from finan#ial institutions/ The owners of the #ompan! ha0e to pa! re"ular interest and prin#ipal amount at the end/ Sto#. is ownership in a #ompan!$ with ea#h share of sto#. representin" a tin! pie#e of ownership/ The more shares !ou own$ the more of the #ompan! !ou own/ The more shares !ou own$ the more di0idends !ou earn when the #ompan! ma.es a profit/ ,n the finan#ial world$ ownership is #alled *E23 .4+. Ad0anta"es of sellin" sto#.D A #ompan! #an raise more #apital than it #ould borrow/ A #ompan! does not ha0e to ma.e periodi# interest pa!ments to #reditors/ A #ompan! does not ha0e to ma.e prin#ipal pa!ments

Sto#.Eshares pla! a ma-or role in a#quirin" #apital to the business in return in0estors are paid di0idends to the shares the! own/ The more shares !ou own the more di0idends !ou re#ei0e/ The role of equit! anal!sis is to pro0ide information to the mar.et/ An effi#ient mar.et relies on informationD a la#. of information #reates ineffi#ien#ies that result in sto#.s bein" misrepresented (o0er or under 0alued / This is 0aluable be#ause it fills information "aps so that ea#h indi0idual in0estor does not need to anal!1e e0er! sto#. thereb! ma.in" the mar.ets more effi#ient/

Equity Analysis

OB5E(TI6ES OF THE STUDY

The ob-e#ti0e of this pro-e#t is to deepl! anal!1e our ,ndian Automobile ,ndustr! for in0estment purpose b! monitorin" the "rowth rate and performan#e on the basis of histori#al data/

The main ob-e#ti0es of the 8ro-e#t stud! areD

Detailed anal!sis of Automobile industr! whi#h is "earin" towards international standards

Anal!1e the impa#t of qualitati0e fa#tors on industr!5s and #ompan!5s prospe#ts

4omparati0e anal!sis of three tou"h #ompetitors TATA Motors$ Maruti Su1u.i and Mahindra and Mahindra throu"h fundamental anal!sis/

Su""estin" as to whi#h #ompan!5s shares would be best for an in0estor to in0est/

Equity Analysis

S(O%E OF THE STUDY

The s#ope of the stud! is identified after and durin" the stud! is #ondu#ted/ The pro-e#t is based on tools li.e fundamental anal!sis and ratio anal!sis/ 2urther$ the stud! is based on information of last fi0e !ears/

The anal!sis is made b! ta.in" into #onsideration fi0e #ompanies i/e/ TATA Motors$ Maruti Su1u.i and Mahindra and Mahindra/

The s#ope of the stud! is limited for a period of fi0e !ears/ The s#ope is limited to onl! the fundamental anal!sis of the #hosen sto#.s/

Equity Analysis

METHODOLOGY
Resear#h desi"n or resear#h methodolo"! is the pro#edure of #olle#tin"$ anal!1in" and interpretin" the data to dia"nose the problem and rea#t to the opportunit! in su#h a wa! where the #osts #an be minimi1ed and the desired le0el of a##ura#! #an be a#hie0ed to arri0e at a parti#ular #on#lusion/ The methodolo"! used in the stud! for the #ompletion of the pro-e#t and the fulfillment of the pro-e#t ob-e#ti0es/

The sample of the sto#.s for the purpose of #olle#tin" se#ondar! data has been sele#ted on the basis of Random Samplin"/ The sto#.s are #hosen in an unbiased manner and ea#h sto#. is #hosen independent of the other sto#.s #hosen/ The sto#.s are #hosen from the automobile se#tor/

The sample si1e for the number of sto#.s is ta.en as = for fundamental anal!sis of sto#.s as fundamental anal!sis is 0er! e6hausti0e and requires detailed stud!/

Equity Analysis

LIMITATIONS

This stud! has been #ondu#ted purel! to understand 3quit! anal!sis for in0estors/ The stud! is restri#ted to three #ompanies based on 2undamental anal!sis/ The stud! is limited to the #ompanies ha0in" equities/ Detailed stud! of the topi# was not possible due to limited si1e of the pro-e#t/ There was a #onstraint with re"ard to time allo#ation for the resear#h stud! i/e/ for a period of (> da!s/

Su""estions and #on#lusions are based on the limited data of fi0e !ears/

Equity Analysis

(HA%TER II 1 RE6IE, OF LITERATURE

Equity Analysis

SE(URITY ANALYSIS
,n0estment su##ess is prett! mu#h a matter of #areful sele#tion and timin" of sto#. pur#hases #oupled with perfe#t mat#hin" to an indi0iduals ris. toleran#e/ ,n order to #arr! out sele#tion$ timin" and mat#hin" a#tions an in0estor must #ondu#t deep se#urit! anal!sis/

,n0estors pur#hase equit! shares with two basi# ob-e#ti0esC '/ )/ To ma.e #apital profits b! sellin" shares at hi"her pri#es/ To earn di0idend in#ome/

These two fa#tors are affe#ted b! a host of fa#tors/ An in0estor has to #arefull! understand and anal!1e all these fa#tors/ There are basi#all! two approa#hes to stud! se#urit! pri#es and 0aluation i/e/ fundamental anal!sis and te#hni#al anal!sis

The 0alue of #ommon sto#. is determined in lar"e measure b! the performan#e of the firm that issued the sto#./ ,f the #ompan! is health! and #an demonstrate stren"th and "rowth$ the 0alue of the sto#. will in#rease/ 9hen 0alues in#rease then pri#es follow and returns on an in0estment will in#rease/ %owe0er$ -ust to .eep the sa00! in0estor on their toes$ the mi6 is #ompli#ated b! the ris. fa#tors in0ol0ed/ 2undamental anal!sis e6amines all the dimensions of ris. e6posure and the probabilities of return$ and mer"es them with broader e#onomi# anal!sis and "reater industr! anal!sis to formulate the 0aluation of a sto#./

Equity Analysis

FUNDAMENTAL ANALYSIS
2undamental anal!sis is a method of fore#astin" the future pri#e mo0ements of a finan#ial instrument based on e#onomi#$ politi#al$ en0ironmental and other rele0ant fa#tors and statisti#s that will affe#t the basi# suppl! and demand of whate0er underlies the finan#ial instrument/ ,t is the stud! of e#onomi#$ industr! and #ompan! #onditions in an effort to determine the 0alue of a #ompan!5s sto#./ 2undamental anal!sis t!pi#all! fo#uses on .e! statisti#s in #ompan!5s finan#ial statements to determine if the sto#. pri#e is #orre#tl! 0alued/ The term simpl! refers to the anal!sis of the e#onomi# well&bein" of a finan#ial entit! as opposed to onl! its pri#e mo0ements/

2undamental anal!sis is the #ornerstone of in0estin"/ The basi# philosoph! underl!in" the fundamental anal!sis is that if an in0estor in0ests re/' in bu!in" a share of a #ompan!$ how mu#h e6pe#ted returns from this in0estment he has/

The fundamental anal!sis is to appraise the intrinsi# 0alue of a se#urit!/ ,t insists that no one should pur#hase or sell a share on the basis of tips and rumors/ The fundamental approa#h #alls upon the in0estors to ma.e his bu! or sell de#ision on the basis of a detailed anal!sis of the information about the #ompan!$ about the industr!$ and the e#onom!/ ,t is also .nown as Ftop&down approa#hG/ This approa#h attempts to stud! the e#onomi# s#enario$ industr! position and the #ompan! e6pe#tations and is also .nown as *'$o#o/ $1 #73!.r41$o/-a#4 a--roa$" 8EI( a--roa$"9+/

Equity Analysis

Thus the EI( a--roa$" in0ol0es three stepsD '/ )/ =/ 3#onomi# anal!sis ,ndustr! anal!sis 4ompan! anal!sis

Equity Analysis

'/ E(ONOMI( ANALYSIS

The le0el of e#onomi# a#ti0it! has an impa#t on in0estment in man! wa!s/ ,f the e#onom! "rows rapidl!$ the industr! #an also be e6pe#ted to show rapid "rowth and 0i#e 0ersa/ 9hen the le0el of e#onomi# a#ti0it! is low$ sto#. pri#es are low$ and when the le0el of e#onomi# a#ti0it! is hi"h$ sto#. pri#es are hi"h refle#tin" the prosperous outloo. for sales and profits of the firms/ The anal!sis of ma#ro e#onomi# en0ironment is essential to understand the beha0ior of the sto#. pri#es/

The #ommonl! anal!1ed ma#ro e#onomi# fa#tors are as followsD

Gro!! Do/'!. $ %ro73$. 8GD%9: 7D8 indi#ates the rate of "rowth of the e#onom!/ ,t represents the a""re"ate 0alue of the "oods and ser0i#es produ#ed in the e#onom!/ ,t #onsists of personal #onsumption e6penditure$ "ross pri0ate domesti# in0estment and "o0ernment e6penditure on "oods and ser0i#es and net e6ports of "oods and ser0i#es/ The "rowth rate of e#onom! points out the prospe#ts for the industrial se#tor and the return in0estors #an e6pe#t from in0estment in shares/ The hi"her "rowth rate is more fa0orable to the sto#. mar.et/

Sa: #0! a#7 #:'!./'#.: ,t is ob0ious that "rowth requires in0estment whi#h in turn requires substantial amount of domesti# sa0in"s/ Sto#. mar.et is a #hannel throu"h whi#h the sa0in"s are made a0ailable to the #orporate bodies/ Sa0in"s are distributed o0er 0arious assets li.e equit! shares$ deposits$ mutual funds$ real estate and bullion/ The sa0in"s and in0estment patterns of the publi# affe#t the sto#. to a "reat e6tent/

Equity Analysis

I#&la. o#: Alon" with the "rowth of 7D8$ if the inflation rate also in#reases$ then the real "rowth would be 0er! little/ The effe#ts of inflation on #apital mar.ets are numerous/ An in#rease in the e6pe#ted rate of inflation is e6pe#ted to #ause a nominal rise in interest rates/ Also$ it in#reases un#ertaint! of future business and in0estment de#isions/ As inflation in#reases$ it results in e6tra #osts to businesses$ thereb! squee1in" their profit mar"ins and leadin" to real de#lines in profitabilit!/

I#.'r'!. ra.'!: The interest rate affe#ts the #ost of finan#in" to the firms/ A de#rease in interest rate implies lower #ost of finan#e for firms and more profitabilit!/ More mone! is a0ailable at a lower interest rate for the bro.ers who are doin" business with borrowed mone!/ A0ailabilit! of #heap funds en#oura"es spe#ulation and rise in the pri#e of shares/

Ta; !.r3$.3r': 30er! !ear in Mar#h$ the business #ommunit! ea"erl! awaits the 7o0ernment5s announ#ement re"ardin" the ta6 poli#!/ 4on#essions and in#enti0es "i0en to a #ertain industr! en#oura"e in0estment in that parti#ular industr!/ Ta6 relief5s "i0en to sa0in"s en#oura"e sa0in"s/ The t!pe of ta6 e6emption has impa#t on the profitabilit! of the industries/

I#&ra!.r3$.3r' &a$ l . '!: ,nfrastru#ture fa#ilities are essential for the "rowth of industrial and a"ri#ultural se#tor/ A wide networ. of #ommuni#ation s!stem is a must for the "rowth of the e#onom!/ Re"ular suppl! of power without an! power #ut would

Equity Analysis

boost the produ#tion/ Ban.in" and finan#ial se#tors also should be sound enou"h to pro0ide adequate support to the industr!/ 7ood infrastru#ture fa#ilities affe#t the sto#. mar.et fa0orabl!/

<. INDUSTRY ANALYSIS An industr! is a "roup of firms that ha0e similar te#hnolo"i#al stru#ture of produ#tion and produ#e similar produ#ts and ,ndustr! anal!sis is a t!pe of business resear#h that fo#uses on the status of an industr! or an industrial se#tor (a broad industr! #lassifi#ation$ li.e Hmanufa#turin"H / ,rrespe#ti0e of spe#ifi# e#onomi# situations$ some industries mi"ht be e6pe#ted to perform better$ and share pri#es in these industries ma! not de#line as mu#h as in other industries/ This identifi#ation of e#onomi# and industr! spe#ifi# fa#tors influen#in" share pri#es will help in0estors to identif! the shares that fit indi0idual e6pe#tations

I#73!.r4 L &' (4$l': The industr! life #!#le theor! is "enerall! attributed to Julius 7rodens.!/ The life #!#le of the industr! is separated into four well defined sta"es/ Pioneering stage: The prospe#ti0e demand for the produ#t is promisin" in this sta"e and the te#hnolo"! of the produ#t is low/ The demand for the produ#t attra#ts man! produ#ers to produ#e the parti#ular produ#t/ There would be se0ere #ompetition and onl! fittest #ompanies sur0i0e this sta"e/ The produ#ers tr! to de0elop brand name$ differentiate the produ#t and #reate a produ#t ima"e/ ,n this situation$ it is diffi#ult to sele#t #ompanies for in0estment be#ause the sur0i0al rate is un.nown/ Equity Analysis

Rapid growth stage: This sta"e starts with the appearan#e of sur0i0in" firms from the pioneerin" sta"e/ The #ompanies that ha0e withstood the #ompetition "row stron"l! in mar.et share and finan#ial performan#e/ The te#hnolo"! of the produ#tion would ha0e impro0ed resultin" in low #ost of produ#tion and "ood qualit! produ#ts/ The #ompanies ha0e stable "rowth rate in this sta"e and the! de#lare di0idend to the shareholders/ ,t is ad0isable to in0est in the shares of these #ompanies/

Maturity and stabilization stage: the "rowth rate tends to moderate and the rate of "rowth would be more or less equal to the industrial "rowth rate or the "ross domesti# produ#t "rowth rate/ S!mptoms of obsoles#en#e ma! appear in the te#hnolo"!/ To .eep "oin"$ te#hnolo"i#al inno0ations in the produ#tion pro#ess and produ#ts should be introdu#ed/ The in0estors ha0e to #losel! monitor the e0ents that ta.e pla#e in the maturit! sta"e of the industr!/

Decline stage: demand for the parti#ular produ#t and the earnin"s of the #ompanies in the industr! de#line/ ,t is better to a0oid in0estin" in the shares of the low "rowth industr! e0en in the boom period/ ,n0estment in the shares of these t!pes of #ompanies leads to erosion of #apital/

Gro=." o& ."' #73!.r4: The histori#al performan#e of the industr! in terms of "rowth and profitabilit! should be anal!1ed/ The past 0ariabilit! in return and "rowth in rea#tion to ma#ro e#onomi# fa#tors pro0ide an insi"ht into the future/

Equity Analysis

Na.3r' o& $o/-'. . o#: Nature of #ompetition is an essential fa#tor that determines the demand for the parti#ular produ#t$ its profitabilit! and the pri#e of the #on#erned #ompan! s#rips/ The #ompaniesB abilit! to withstand the lo#al as well as the multinational #ompetition #ounts mu#h/ ,f too man! firms are present in the or"ani1ed se#tor$ the #ompetition would be se0ere/ The #ompetition would lead to a de#line in the pri#e of the produ#t/ The in0estor before in0estin" in the s#rip of a #ompan! should anal!1e the mar.et share of the parti#ular #ompan!Bs produ#t and should #ompare it with the top fi0e #ompanies/

S,OT a#al4! !: S9:T anal!sis represents the stren"th$ wea.ness$ opportunit! and threat for an industr!/ 30er! in0estor should #arr! out a S9:T anal!sis for the #hosen industr!/ Ta.e for instan#e$ in#rease in demand for the industr!5s produ#t be#omes its stren"th$ presen#e of numerous pla!ers in the mar.et$ i/e/ #ompetition be#omes the threat to a parti#ular #ompan!/ The pro"ress in R I D in that industr! is an opportunit! and entr! of multinationals in the industr! is a threat/ ,n this wa! the fa#tors are to be arran"ed and anal!1ed/

Equity Analysis

=/ (OM%ANY ANALYSIS
,n the #ompan! anal!sis the in0estor assimilates the se0eral bits of information related to the #ompan! and e0aluates the present and future 0alues of the sto#./ The ris. and return asso#iated with the pur#hase of the sto#. is anal!1ed to ta.e better in0estment de#isions/ The present and future 0alues are affe#ted b! a number of fa#tors/

(o/-'. . :' '70' o& ."' $o/-a#4: Ma-or industries in ,ndia are #omposed of hundreds of indi0idual #ompanies/ Thou"h the number of #ompanies is lar"e$ onl! few #ompanies #ontrol the ma-or mar.et share/ The #ompetiti0eness of the #ompan! #an be studied with the help of the followin"C Market share: The mar.et share of the annual sales helps to determine a #ompan!5s relati0e #ompetiti0e position within the industr!/ ,f the mar.et share is hi"h$ the #ompan! would be able to meet the #ompetition su##essfull!/ The #ompanies in the mar.et should be #ompared with li.e produ#t "roups otherwise$ the results will be misleadin"/ Growth of sales: The rapid "rowth in sales would .eep the shareholder in a better position than one with sta"nant "rowth rate/ ,n0estors "enerall! prefer si1e and "rowth in sales be#ause the lar"er si1e #ompanies ma! be able to withstand the business #!#le rather than the #ompan! of smaller si1e/ Stability of sales: ,f a firm has stable sales re0enue$ it will ha0e more stable earnin"s/ The fall in the mar.et share indi#ates the de#linin" trend of #ompan!$

Equity Analysis

e0en if the sales are stable/ %en#e the stabilit! of sales should be #ompared with its mar.et share and the #ompetitor5s mar.et share/

Ear# #0! o& ."' $o/-a#4: Sales alone do not in#rease the earnin"s but the #osts and e6penses of the #ompan! also influen#e the earnin"s/ 2urther$ earnin"s do not alwa!s in#rease with in#rease in sales/ The #ompan!5s sales mi"ht ha0e in#reased but its earnin"s per share ma! de#line due to rise in #osts/ %en#e$ the in0estor should not onl! depend on the sales$ but should anal!1e the earnin"s of the #ompan!/

F #a#$ al a#al4! !: The best sour#e of finan#ial information about a #ompan! is its own finan#ial statements/ This is a primar! sour#e of information for e0aluatin" the in0estment prospe#ts in the parti#ular #ompan!5s sto#./ 2inan#ial statement anal!sis is the stud! of a #ompan!5s finan#ial statement from 0arious 0iewpoints/ The statement "i0es the histori#al and #urrent information about the #ompan!5s operations/ %istori#al finan#ial statement helps to predi#t the future and the #urrent information aids to anal!1e the present status of the #ompan!/ The two main statements used in the anal!sis are Balan#e sheet and 8rofit and ?oss A##ount/

The balan#e sheet is one of the finan#ial statements that #ompanies prepare e0er! !ear for their shareholders/ ,t is li.e a finan#ial snapshot$ the #ompan!Bs finan#ial situation at a moment in time/ ,t is prepared at the !ear end$ listin" the #ompan!Bs #urrent assets and liabilities/ ,t helps to stud! the #apital stru#ture of the #ompan!/ ,t is better for the in0estor to a0oid a #ompan! with e6#essi0e debt #omponent in its #apital stru#ture/

Equity Analysis

2rom the balan#e sheet$ liquidit! position of the #ompan! #an also be assessed with the information on #urrent assets and #urrent liabilities/

Ra. o a#al4! !: Ratio is a relationship between two fi"ures e6pressed mathemati#all!/ 2inan#ial ratios pro0ide numeri#al relationship between two rele0ant finan#ial data/ 2inan#ial ratios are #al#ulated from the balan#e sheet and profit and loss a##ount/ The relationship #an be either e6pressed as a per#ent or as a quotient/ Ratios summari1e the data for eas! understandin"$ #omparison and interpretations/

Ratios for in0estment purposes #an be #lassified into profitabilit! ratios$ turno0er ratios$ and le0era"e ratios/ 8rofitabilit! ratios are the most popular ratios sin#e in0estors prefer to measure the present profit performan#e and use this information to fore#ast the future stren"th of the #ompan!/ The most often used profitabilit! ratios are return on assets$ pri#e earnin"s multiplier$ pri#e to boo. 0alue$ pri#e to #ash flow$ and pri#e to sales$ di0idend !ield$ return on equit!$ present 0alue of #ash flows$ and profit mar"ins/

a9 R'.3r# o# A!!'.! 8ROA9 R:A is #omputed as the produ#t of the net profit mar"in and the total asset turno0er ratios/ ROA > 8N'. %ro& .?To.al #$o/'9 ; 8To.al #$o/'?To.al A!!'.!9

This ratio indi#ates the firmBs strate"i# su##ess/ 4ompanies #an ha0e one of two strate"iesD #ost leadership$ or produ#t differentiation/ R:A should be risin" or .eepin" pa#e with the #ompan!Bs #ompetitors if the #ompan! is su##essfull! pursuin" either of

Equity Analysis

these strate"ies$ but how R:A rises will depend on the #ompan!Bs strate"!/ R:A should rise with a su##essful #ost leadership strate"! be#ause the #ompan!5s in#reasin" operatin" effi#ien#!/ An e6ample is an in#reasin"$ total asset$ turno0er ratio as the #ompan! e6pands into new mar.ets$ in#reasin" its mar.et share/ The #ompan! ma! a#hie0e leadership b! usin" its assets more effi#ientl!/ 9ith a su##essful produ#t differentiation strate"!$ R:A will rise be#ause of a risin" profit mar"in/

@9 R'.3r# o# I#:'!./'#. 8ROI9 R:, is the return on #apital in0ested in business$ i/e/$ if an in0estment Rs ' #rore in men$ ma#hines$ land and material is made to "enerate Rs/ )> la.hs of net profit$ then the R:, is )>J/ The #omputation of return on in0estment is as followsD

R'.3r# o# I#:'!./'#. 8ROI9 > 8N'. -ro& .?E23 .4 #:'!./'#.!9 ; 100

As this ratio re0eals how well the resour#es of a firm are bein" used$ hi"her the ratio$ better are the results/ The return on shareholder5s in0estment should be #ompared with the return of other similar firms in the same industr!/ The inert&firm #omparison of this ratio determines whether the in0estments in the firm are attra#ti0e or not as the in0estors would li.e to in0est onl! where the return is hi"her/

$9 R'.3r# o# E23 .4 Return on equit! measures how mu#h an equit! shareholderBs in0estment is a#tuall! earnin"/ The return on equit! tells the in0estor how mu#h the in0ested rupee is earnin"

Equity Analysis

from the #ompan!/ The hi"her the number$ the better is the performan#e of the #ompan! and su""ests the usefulness of the pro-e#ts the #ompan! has in0ested in/ The #omputation of return on equit! is as followsD

R'.3r# o# '23 .4 > 8N'. -ro& . .o o=#'r!?:al3' o& ."' !-'$ & $ o=#'rA! (o#.r @3. o# .o ."' @3! #'!!9 ; 100

The ratio is more meanin"ful to the equit! shareholders who are in0ested to .now profits earned b! the #ompan! and those profits whi#h #an be made a0ailable to pa! di0idend to them/

79 Ear# #0! -'r S"ar' 8E%S This ratio determines what the #ompan! is earnin" for e0er! share/ 2or man! in0estors$ earnin"s are the most important tool/ 38S is #al#ulated b! di0idin" the earnin"s (net profit b! the total number of equit! shares/ The #omputation of 38S is as followsD

Ear# #0! -'r !"ar' > N'. -ro& .?N3/@'r o& !"ar'! o3.!.a#7 #0

The 38S is a "ood measure of profitabilit! and when #ompared with 38S of similar other #ompanies$ it "i0es a 0iew of the #omparati0e earnin"s or earnin"s power of a firm/ 38S #al#ulated for a number of !ears indi#ates whether or not earnin" power of the #ompan! has in#reased/

Equity Analysis

'9 D : 7'#7 -'r S"ar' 8D%S9 The e6tent of pa!ment of di0idend to the shareholders is measured in the form of di0idend per share/ The di0idend per share "i0es the amount of #ash flow from the #ompan! to the owners and is #al#ulated as followsD

D : 7'#7 -'r !"ar' > To.al 7 : 7'#7 -a4/'#. ? N3/@'r o& !"ar'! o3.!.a#7 #0

The pa!ment of di0idend #an ha0e se0eral interpretations to the shareholder/ The distribution of di0idend #ould be thou"ht of as the distribution of e6#ess profitsEabnormal profits b! the #ompan!/ :n the other hand$ it #ould also be ne"ati0el! interpreted as la#. of in0estment opportunities/ ,n all$ di0idend pa!out "i0es the e6tent of inflows to the shareholders from the #ompan!/

&9 D : 7'#7 %a4o3. Ra. o 2rom the profits of ea#h #ompan! a #ash flow #alled di0idend is distributed amon" its shareholders/ This is the #ontinuous stream of #ash flow to the owners of shares$ apart from the pri#e differentials (#apital "ains in the mar.et/ The return to the shareholders$ in the form of di0idend$ out of the #ompan!Bs profit is measured throu"h the pa!out ratio/ The pa!out ratio is #omputed as followsD

%a4o3. Ra. o > 8D : 7'#7 -'r !"ar' ? Ear# #0! -'r !"ar'9 B 100 The per#enta"e of pa!out ratio #an also be used to #ompute the per#enta"e of retained earnin"s/ The profits a0ailable for distribution are either paid as di0idends or retained

Equity Analysis

internall! for business "rowth opportunities/ %en#e$ when di0idends are not de#lared$ the entire profit is plou"hed ba#. into the business for its future in0estments/

09 D : 7'#7 Y 'l7 Di0idend !ield is #omputed b! relatin" the di0idend per share to the mar.et pri#e of the share/ The mar.et pla#e pro0ides opportunities for the in0estor to bu! the #ompan!Bs share at an! point of time/ The pri#e at whi#h the share has been bou"ht from the mar.et is the a#tual #ost of the in0estment to the shareholder/ The mar.et pri#e is to be ta.en as the #um&di0idend pri#e/ Di0idend !ield relates the a#tual #ost to the #ash flows re#ei0ed from the #ompan!/ The #omputation of di0idend !ield is as follows

D : 7'#7 4 'l7 > 8D : 7'#7 -'r !"ar' ? MarC'. -r $' -'r !"ar'9 B 100

%i"h di0idend !ield ratios are usuall! interpreted as under0alued #ompanies in the mar.et/ The mar.et pri#e is a measure of future dis#ounted 0alues$ while the di0idend per share is the present return from the in0estment/ %en#e$ a hi"h di0idend !ield implies that the share has been under pri#ed in the mar.et/ :n the other hand a low di0idend !ield need not be interpreted as o0er0aluation of shares/ A #ompan! that does not pa! out di0idends will not ha0e a di0idend !ield and the real measure of the mar.et pri#e will be in terms of earnin"s per share and not throu"h the di0idend pa!ments/

Equity Analysis

"9 %r $'?Ear# #0! Ra. o 8%?E9 The 8E3 multiplier or the pri#e earnin"s ratio relates the #urrent mar.et pri#e of the share to the earnin"s per share/ This is #omputed as followsD

%r $'?'ar# #0! ra. o > (3rr'#. /arC'. -r $' ? Ear# #0! -'r !"ar'

This ratio is #al#ulated to ma.e an estimate of appre#iation in the 0alue of a share of a #ompan! and is widel! used b! in0estors to de#ide whether or not to bu! shares in a parti#ular #ompan!/ Man! in0estors prefer to bu! the #ompan!Bs shares at a low 8E3 ratio sin#e the "eneral interpretation is that the mar.et is under0aluin" the share and there will be a #orre#tion in the mar.et pri#e sooner or later/ A 0er! hi"h 8E3 ratio on the other hand implies that the #ompan!Bs shares are o0er0alued and the in0estor #an benefit b! sellin" the shares at this hi"h mar.et pri#e/

9 D'@.1.o1E23 .4 Ra. o Debt&3quit! ratio is used to measure the #laims of outsiders and the owners a"ainst the firm5s assets/ D'@.1.o1'23 .4 ra. o > O3.! 7'r! F3#7! ? S"ar'"ol7'r! F3#7!

The debt&equit! ratio is #al#ulated to measure the e6tent to whi#h debt finan#in" has been used in a business/ ,t indi#ates the proportionate #laims of owners and the outsiders a"ainst the firm5s assets/ The purpose is to "et an idea of the #ushion a0ailable to outsiders on the liquidation of the firm/

Equity Analysis

(HA%TER III 1 INDUSTRY %ROFILE

Equity Analysis

FINAN(IAL MARKETS
2inan#e is the pre&requisite for modern business and finan#ial institutions pla! a 0ital role in the e#onomi# s!stem/ ,t is throu"h finan#ial mar.ets and institutions that the finan#ial s!stem of an e#onom! wor.s/ 2inan#ial mar.ets refer to the institutional arran"ements for dealin" in finan#ial assets and #redit instruments of different t!pes su#h as #urren#!$ #heques$ ban. deposits$ bills$ bonds$ equities$ et#/

2inan#ial mar.et is a broad term des#ribin" an! mar.etpla#e where bu!ers and sellers parti#ipate in the trade of assets su#h as equities$ bonds$ #urren#ies and deri0ati0es/ The! are t!pi#all! defined b! ha0in" transparent pri#in"$ basi# re"ulations on tradin"$ #osts and fees and mar.et for#es determinin" the pri#es of se#urities that trade/

7enerall!$ there is no spe#ifi# pla#e or lo#ation to indi#ate a finan#ial mar.et/ 9here0er a finan#ial transa#tion ta.es pla#e$ it is deemed to ha0e ta.en pla#e in the finan#ial mar.et/ %en#e finan#ial mar.ets are per0asi0e in nature sin#e finan#ial transa#tions are themsel0es 0er! per0asi0e throu"hout the e#onomi# s!stem/ 2or instan#e$ issue of equit! shares$ "rantin" of loan b! term lendin" institutions$ deposit of mone! into a ban.$ pur#hase of debentures$ sale of shares and so on/

,n a nutshell$ finan#ial mar.ets are the #redit mar.ets #aterin" to the 0arious needs of the indi0iduals$ firms and institutions b! fa#ilitatin" bu!in" and sellin" of finan#ial assets$ #laims and ser0i#es/

Equity Analysis

(LASSIFI(ATION OF FINAN(IAL MARKETS

F #a#$ al /arC'.!

Or0a# D'7 /arC'.!

U#or0a# D'7 /arC'.!

(a- .al MarC'.!

Mo#'4 MarC'.!

Mo#'4 L'#7'r!E I#7 0'#3o! Ba#C'r!

I#73!.r al S'$3r . '! MarC'.

(all Mo#'4 MarC'.

%r /ar4 MarC'.

(o//'r$ al B ll MarC'.

S'$o#7ar4 /arC'.

Tr'a!3r4 B ll MarC'.

Go:'r#/'#. S'$3r . '! MarC'. Lo#01.'r/ loa# /arC'.

Equity Analysis

(a- .al MarC'. The #apital mar.et is a mar.et for finan#ial assets whi#h ha0e a lon" or indefinite maturit!/ 7enerall!$ it deals with lon" term se#urities whi#h ha0e a period of abo0e one !ear/ ,n the widest sense$ it #onsists of a series of #hannels throu"h whi#h the sa0in"s of the #ommunit! are made a0ailable for industrial and #ommer#ial enterprises and publi# authorities/ As a whole$ #apital mar.et fa#ilitates raisin" of #apital/

The ma-or fun#tions performed b! a #apital mar.et areD '/ Mobili1ation of finan#ial resour#es on a nation&wide s#ale/ )/ Se#urin" the forei"n #apital and .now&how to fill up defi#it in the required resour#es for e#onomi# "rowth at a faster rate/ =/ 3ffe#ti0e allo#ation of the mobili1ed finan#ial resour#es$ b! dire#tin" the same to pro-e#ts !ieldin" hi"hest !ield or to the pro-e#ts needed to promote balan#ed e#onomi# de0elopment/

4apital mar.et #onsists of primar! mar.et and se#ondar! mar.et/ Primary market: 8rimar! mar.et is a mar.et for new issues or new finan#ial #laims/ %en#e it is also #alled as New ,ssue Mar.et/ ,t basi#all! deals with those se#urities whi#h are issued to the publi# for the first time/ The mar.et$ therefore$ ma.es a0ailable a new blo#. of se#urities for publi# subs#ription/ ,n other words$ it deals with raisin" of fresh #apital b! #ompanies either for #ash or for #onsideration other than #ash/ The best e6ample #ould be ,nitial 8ubli# :fferin" (,8: where a firm offers shares to the publi# for the first time/

Equity Analysis

Secondary market: Se#ondar! mar.et is a mar.et where e6istin" se#urities are traded/ ,n other words$ se#urities whi#h ha0e alread! passed throu"h new issue mar.et are traded in this mar.et/ 7enerall!$ su#h se#urities are quoted in the sto#. e6#han"e and it pro0ides a #ontinuous and re"ular mar.et for bu!in" and sellin" of se#urities/ This mar.et #onsists of all sto#. e6#han"es re#o"ni1ed b! the "o0ernment of ,ndia/

Mo#'4 MarC'. Mone! mar.ets are the mar.ets for short&termE hi"hl! liquid debt se#urities/ Mone! mar.et se#urities are "enerall! 0er! safe in0estments whi#h return relati0el! low interest rate that is most appropriate for temporar! #ash stora"e or short term time needs/ ,t #onsists of a number of sub&mar.ets whi#h #olle#ti0el! #onstitute the mone! mar.et namel! #all mone! mar.et$ #ommer#ial bills mar.et$ a##eptan#e mar.et$ and Treasur! bill mar.et/

D'r :a. :'! MarC'. The deri0ati0es mar.et is the finan#ial mar.et for deri0ati0es$ finan#ial instruments li.e futures #ontra#ts or options$ whi#h are deri0ed from other forms of assets/ A deri0ati0e is a se#urit! whose pri#e is dependent upon or deri0ed from one or more underl!in" assets/ The deri0ati0e itself is merel! a #ontra#t between two or more parties/ ,ts 0alue is determined b! flu#tuations in the underl!in" asset/ The most #ommon underl!in" assets in#lude sto#.s$ bonds$ #ommodities$ #urren#ies$ interest rates and mar.et inde6es/ The important finan#ial deri0ati0es are the followin"D

Equity Analysis

Forwards: 2orwards are the oldest of all the deri0ati0es/ A forward #ontra#t refers to an a"reement between two parties to e6#han"e an a"reed quantit! of an asset for #ash at a #ertain date in future at a predetermined pri#e spe#ified in that a"reement/ The promised asset ma! be #urren#!$ #ommodit!$ instrument et#/

Futures: 2uture #ontra#t is 0er! similar to a forward #ontra#t in all respe#ts e6#eptin" the fa#t that it is #ompletel! a standardi1ed one/ ,t is nothin" but a standardi1ed forward #ontra#t whi#h is le"all! enfor#eable and alwa!s traded on an or"ani1ed e6#han"e/

ptions: A finan#ial deri0ati0e that represents a #ontra#t sold b! one part! (option writer to another part! (option holder / The #ontra#t offers the bu!er the ri"ht$ but not the obli"ation$ to bu! (#all or sell (put a se#urit! or other finan#ial asset at an a"reed&upon pri#e (the stri.e pri#e durin" a #ertain period of time or on a spe#ifi# date (e6er#ise date / 4all options "i0e the option to bu! at #ertain pri#e$ so the bu!er would want the sto#. to "o up/ 8ut options "i0e the option to sell at a #ertain pri#e$ so the bu!er would want the sto#. to "o down/

Swaps: ,t is !et another e6#itin" tradin" instrument/ ,nfa#t$ it is the #ombination of forwards b! two #ounterparties/ ,t is arran"ed to reap the benefits arisin" from the flu#tuations in the mar.et K either #urren#! mar.et or interest rate mar.et or an! other mar.et for that matter/

Equity Analysis

For' 0# E;$"a#0' MarC'. ,t is a mar.et in whi#h parti#ipants are able to bu!$ sell$ e6#han"e and spe#ulate on #urren#ies/ 2orei"n e6#han"e mar.ets are made up of ban.s$ #ommer#ial #ompanies$ #entral ban.s$ in0estment mana"ement firms$ hed"e funds$ and retail fore6 bro.ers and in0estors/ The fore6 mar.et is #onsidered to be the lar"est finan#ial mar.et in the world/ ,t is a worldwide de#entrali1ed o0er&the&#ounter finan#ial mar.et for the tradin" of #urren#ies/ Be#ause the #urren#! mar.ets are lar"e and liquid$ the! are belie0ed to be the most effi#ient finan#ial mar.ets/ ,t is important to reali1e that the forei"n e6#han"e mar.et is not a sin"le e6#han"e$ but is #onstru#ted of a "lobal networ. of #omputers that #onne#ts parti#ipants from all parts of the world/ (o//o7 . '! MarC'. ,t is a ph!si#al or 0irtual mar.etpla#e for bu!in"$ sellin" and tradin" raw or primar! produ#ts/ 2or in0estorsB purposes there are #urrentl! about >* ma-or #ommodit! mar.ets worldwide that fa#ilitate in0estment trade in nearl! '** primar! #ommodities/ 4ommodities are split into two t!pesD hard and soft #ommodities/ %ard #ommodities are t!pi#all! natural resour#es that must be mined or e6tra#ted ("old$ rubber$ oil$ et#/ $ whereas soft #ommodities are a"ri#ultural produ#ts or li0esto#. (#orn$ wheat$ #offee$ su"ar$ so!beans$ por.$ et#/

Equity Analysis

INDIAN FINAN(IAL MARKETS

,ndia 2inan#ial mar.et is one of the oldest in the world and is #onsidered to be the fastest "rowin" and best amon" all the mar.ets of the emer"in" e#onomies/

The histor! of ,ndian #apital mar.ets dates ba#. )** !ears toward the end of the '+th #entur! when ,ndia was under the rule of the 3ast ,ndia 4ompan!/ The de0elopment of the #apital mar.et in ,ndia #on#entrated around Mumbai where no less than )** to )>* se#urities bro.ers were a#ti0e durin" the se#ond half of the 'Lth #entur!/ The finan#ial mar.et in ,ndia toda! is more de0eloped than man! other se#tors be#ause it was or"ani1ed lon" before with the se#urities e6#han"es of Mumbai$ Ahmadabad and ;ol.ata were established as earl! as the 'Lth #entur!/ B! the earl! 'L@*s the total number of se#urities e6#han"es in ,ndia rose to ei"ht$ in#ludin" Mumbai$ Ahmadabad and ;ol.ata apart from Madras$ ;anpur$ Delhi$ Ban"alore and 8une/ Toda! there are )' re"ional se#urities e6#han"es in ,ndia in addition to the #entrali1ed NS3 (National Sto#. 36#han"e and :T43, (:0er the 4ounter 36#han"e of ,ndia / %owe0er the sto#. mar.ets in ,ndia remained sta"nant due to strin"ent #ontrols on the mar.et e#onom! that allowed onl! a handful of monopolies to dominate their respe#ti0e se#tors/ The #orporate se#tor wasnBt allowed into man! industr! se"ments$ whi#h were dominated b! the state #ontrolled publi# se#tor resultin" in sta"nation of

Equity Analysis

the e#onom! ri"ht up to the earl! 'LL*s/ Thereafter when the ,ndian e#onom! be"an liberali1in" and the #ontrols be"an to be dismantled or eased outC the se#urities mar.ets witnessed a flurr! of ,8:5s that were laun#hed/ This resulted in man! new #ompanies a#ross different industr! se"ments to #ome up with newer produ#ts and ser0i#es/

A remar.able feature of the "rowth of the ,ndian e#onom! in re#ent !ears has been the role pla!ed b! its se#urities mar.ets in assistin" and fuellin" that "rowth with mone! rose within the e#onom!/ This was in mar.ed #ontrast to the initial phase of "rowth in man! of the fast "rowin" e#onomies of 3ast Asia that witnessed hu"e doses of 2D, (2orei"n Dire#t ,n0estment spurrin" "rowth in their initial da!s of mar.et de#ontrol/ Durin" this phase in ,ndia mu#h of the or"ani1ed se#tor has been affe#ted b! hi"h "rowth as the finan#ial mar.ets pla!ed an all&in#lusi0e role in sustainin" finan#ial resour#e mobili1ation/ Man! 8SUs (8ubli# Se#tor Underta.in"s that de#ided to offload part of their equit! were also helped b! the well&or"ani1ed se#urities mar.et in ,ndia/

The laun#h of the NS3 (National Sto#. 36#han"e and the :T43, (:0er the 4ounter 36#han"e of ,ndia durin" the mid 'LL*s b! the "o0ernment of ,ndia was meant to usher in an easier and more transparent form of tradin" in se#urities/ The NS3 was #on#ei0ed as the mar.et for tradin" in the se#urities of #ompanies from the lar"e&s#ale se#tor and the :T43, for those from the small&s#ale se#tor/ 9hile the NS3 has not -ust done well to "row and e0ol0e into the 0irtual ba#.bone of #apital mar.ets in ,ndia the :T43, stru""led and is !et to show an! si"n of "rowth and de0elopment/ The inte"ration of ,T into the #apital mar.et infrastru#ture has been parti#ularl! smooth in

Equity Analysis

,ndia due to the #ountr!5s world #lass ,T industr!/ This has pushed up the operational effi#ien#! of the ,ndian sto#. mar.et to "lobal standards and as a result the #ountr! has been able to #apitali1e on its hi"h "rowth and attra#t forei"n #apital li.e ne0er before/

The re"ulatin" authorit! for #apital mar.ets in ,ndia is the S3B, (Se#urities and 36#han"e Board of ,ndia / S3B, #ame into prominen#e in the 'LL*s after the #apital mar.ets e6perien#ed some turbulen#e/ ,t had to ta.e drasti# measures to plu" man! loopholes that were e6ploited b! #ertain mar.et for#es to ad0an#e their 0ested interests/ After this initial phase of stru""le S3B, has "rown in stren"th as the re"ulator of ,ndia5s #apital mar.ets and as one of the #ountr!5s most important institutions/

Equity Analysis

FINAN(IAL MARKET REGULATIONS

Re"ulations are an absolute ne#essit! in the fa#e of the "rowin" importan#e of #apital mar.ets throu"hout the world/ The de0elopment of a mar.et e#onom! is dependent on the de0elopment of the #apital mar.et/ The re"ulation of a #apital mar.et in0ol0es the re"ulation of se#uritiesC these rules enable the #apital mar.et to fun#tion more effi#ientl! and impartiall!/ A well re"ulated mar.et has the potential to en#oura"e additional in0estors to parta.e$ and #ontribute in$ furtherin" the de0elopment of the e#onom!/ The #hief #apital mar.et re"ulator! authorit! is Se#urities and 36#han"e Board of ,ndia (S3B, / SEBI is the re"ulator for the se#urities mar.et in ,ndia/ ,t is the ape6 bod! to de0elop and re"ulate the sto#. mar.et in ,ndia ,t was formed offi#iall! b! the 7o0ernment of ,ndia in 'LL) with S3B, A#t 'LL) bein" passed b! the ,ndian 8arliament/ 4haired b! 4 B Bha0e$ S3B, is headquartered in the popular business distri#t of Bandra&;urla #omple6 in Mumbai$ and has Northern$ 3astern$ Southern and 9estern re"ional offi#es in New Delhi$ ;ol.ata$ 4hennai and Ahmedabad/ ,n pla#e of 7o0ernment 4ontrol$ a statutor! and autonomous re"ulator! board with defined responsibilities$ to #o0er both de0elopment I re"ulation of the mar.et$ and independent powers has been set up/

T"' @a! $ o@F'$. :'! o& ."' Boar7 ='r' 7'#. & '7 a!:

to prote#t the interests of in0estors in se#uritiesC to promote the de0elopment of Se#urities Mar.etC to re"ulate the se#urities mar.et and

Equity Analysis

2or matters #onne#ted therewith or in#idental thereto/

Sin#e its in#eption S3B, has been wor.in" tar"etin" the se#urities and is attendin" to the fulfillment of its ob-e#ti0es with #ommendable 1eal and de6terit!/ The impro0ements in the se#urities mar.ets li.e #apitali1ation requirements$ mar"inin"$ establishment of #learin" #orporations et#/ redu#ed the ris. of #redit and also redu#ed the mar.et/

S3B, has introdu#ed the #omprehensi0e re"ulator! measures$ pres#ribed re"istration norms$ the eli"ibilit! #riteria$ the #ode of obli"ations and the #ode of #ondu#t for different intermediaries li.e$ ban.ers to issue$ mer#hant ban.ers$ bro.ers and sub& bro.ers$ re"istrars$ portfolio mana"ers$ #redit ratin" a"en#ies$ underwriters and others/ ,t has framed b!e&laws$ ris. identifi#ation and ris. mana"ement s!stems for 4learin" houses of sto#. e6#han"es$ sur0eillan#e s!stem et#/ whi#h has made dealin" in se#urities both safe and transparent to the end in0estor/

Another si"nifi#ant e0ent is the appro0al of tradin" in sto#. indi#es (li.e SI8 4NM Nift! I Sense6 in )***/ A mar.et ,nde6 is a #on0enient and effe#ti0e produ#t be#ause of the followin" reasonsD

,t a#ts as a barometer for mar.et beha0iorC ,t is used to ben#hmar. portfolio performan#eC ,t is used in deri0ati0e instruments li.e inde6 futures and inde6 optionsC ,t #an be used for passi0e fund mana"ement as in #ase of ,nde6 2unds/

Equity Analysis

Two broad approa#hes of S3B, is to inte"rate the se#urities mar.et at the national le0el$ and also to di0ersif! the tradin" produ#ts$ so that there is an in#rease in number of traders in#ludin" ban.s$ finan#ial institutions$ insuran#e #ompanies$ mutual funds$ primar! dealers et#/ to transa#t throu"h the 36#han"es/ ,n this #onte6t the introdu#tion of deri0ati0es tradin" throu"h ,ndian Sto#. 36#han"es permitted b! S3B, in )*** AD is a real landmar./ S3B, has en-o!ed su##ess as a re"ulator b! pushin" s!stemi# reforms a""ressi0el! and su##essi0el! (e/"/ the qui#. mo0ement towards ma.in" the mar.ets ele#troni# and paperless rollin" settlement on TN) bases / S3B, has been a#ti0e in settin" up the re"ulations as required under law/

STO(K EG(HANGES IN INDIA

Sto#. 36#han"es are an or"ani1ed mar.etpla#e$ either #orporation or mutual or"ani1ation$ where members of the or"ani1ation "ather to trade #ompan! sto#.s or other se#urities/ The members ma! a#t either as a"ents for their #ustomers$ or as prin#ipals for their own a##ounts/ As per the Se#urities 4ontra#ts Re"ulation A#t$ 'L>@ a sto#. e6#han"e is an asso#iation$ or"ani1ation or bod! of indi0iduals whether in#orporated or not$ established for the purpose of assistin"$ re"ulatin" and #ontrollin" business in bu!in"$ sellin" and dealin" in se#urities/

Equity Analysis

Sto#. e6#han"es fa#ilitate for the issue and redemption of se#urities and other finan#ial instruments in#ludin" the pa!ment of in#ome and di0idends/ The re#ord .eepin" is #entral but trade is lin.ed to su#h ph!si#al pla#e be#ause modern mar.ets are #omputeri1ed/ The trade on an e6#han"e is onl! b! members and sto#. bro.er do ha0e a seat on the e6#han"e/ L !. o& S.o$C E;$"a#0'! # I#7 a Bomba! Sto#. 36#han"e National Sto#. 36#han"e :T4 36#han"e of ,ndia R'0 o#al S.o$C E;$"a#0'! '/ Ahmedabad )/ Ban"alore =/ Bhubaneswar (/ 4al#utta >/ 4o#hin @/ 4oimbatore A/ Delhi +/ 7uwahati L/ %!derabad '*/ Jaipur ''/ ?udhiana ')/ Madh!a 8radesh '=/ Madras '(/ Ma"adh '>/ Man"alore '@/ Meerut 'A/ 8une '+/ Saurashtra ;ut#h 'L/ Uttar 8radesh )*/ <adodara

Equity Analysis

BOMBAY STO(K EG(HANGE

A 0er! #ommon name for all traders in the sto#. mar.et$ BS3$ stands for Bomba! Sto#. 36#han"e/ ,t is the oldest mar.et not onl! in the #ountr!$ but also in Asia/ ,n the earl! da!s$ BS3 was .nown as HThe Nati0e Share I Sto#. Bro.ers Asso#iation/H ,t was established in the !ear '+A> and be#ame the first sto#. e6#han"e in the #ountr! to be re#o"ni1ed b! the "o0ernment/ ,n 'L>@$ BS3 obtained a permanent re#o"nition from the 7o0ernment of ,ndia under the Se#urities 4ontra#ts (Re"ulation A#t$ 'L>@/

,n the past and e0en now$ it pla!s a pi0otal role in the de0elopment of the #ountr!Bs #apital mar.et/ This is re#o"ni1ed worldwide and its inde6$ S3NS3M$ is also tra#.ed worldwide/ 3arlier it was an Asso#iation of 8ersons (A:8 $ but now it is a demutualised and #orporatised entit! in#orporated under the pro0isions of the 4ompanies A#t$ 'L>@$ pursuant to the BS3 (4orporatisation and Demutuali1ation S#heme$ )**> notified b! the Se#urities and 36#han"e Board of ,ndia (S3B, /

BSE 6 ! o# The 0ision of the Bomba! Sto#. 36#han"e is to H3mer"e as the premier ,ndian sto#. e6#han"e b! establishin" "lobal ben#hmar.s/H

BSE Ma#a0'/'#. Bomba! Sto#. 36#han"e is mana"ed professionall! b! Board of Dire#tors/ ,t #omprises of eminent professionals$ representati0es of Tradin" Members and the Mana"in" Dire#tor/ The Board is an in#lusi0e one and is shaped to benefit from the mar.et intermediaries parti#ipation/

The Board e6er#ises #omplete #ontrol and formulates lar"er poli#! issues/ The da!& to&da! operations of BS3 are mana"ed b! the Mana"in" Dire#tor and its s#hool of professional as a mana"ement team/

BSE N'.=orC The 36#han"e rea#hes ph!si#all! to ('A #ities and towns in the #ountr!/ The framewor. of it has been desi"ned to safe"uard mar.et inte"rit! and to operate with transparen#!/ ,t pro0ides an effi#ient mar.et for the tradin" in equit!$ debt instruments and deri0ati0es/ ,ts online tradin" s!stem$ popularl! .nown as B:?T$ is a proprietar! s!stem and it is BS AALL&)&)**) #ertified/ The B:?T networ. was e6panded$ nationwide$ in 'LLA/ The sur0eillan#e and #learin" I settlement fun#tions of the 36#han"e are ,S: L**'D)*** #ertified/

BSE Fa$.! BS3 as a brand is s!non!mous with #apital mar.ets in ,ndia/ The BS3 S3NS3M is the ben#hmar. equit! inde6 that refle#ts the robustness of the e#onom! and finan#e/ ,t was the K 2irst in ,ndia to introdu#e 3quit! Deri0ati0es 2irst in ,ndia to laun#h a 2ree 2loat ,nde6 2irst in ,ndia to laun#h USO 0ersion of BS3 Sense6 2irst in ,ndia to laun#h 36#han"e 3nabled ,nternet Tradin" 8latform 2irst in ,ndia to obtain ,S: #ertifi#ation for Sur0eillan#e$ 4learin" I Settlement BBS3 :n&?ine Tradin" S!stem5 (B:?T has been awarded the "loball! re#o"ni1ed the ,nformation Se#urit! Mana"ement S!stem standard BSAALL&)D)**)/ 2irst to ha0e an e6#lusi0e fa#ilit! for finan#ial trainin" Mo0ed from :pen :ut#r! to 3le#troni# Tradin" within -ust >* da!s

!S" with its long history of capital market de#elopment is fully geared to continue its contributions to further the growth of the securities markets of the country$ thus helping %ndia increases its sphere of influence in international financial markets&

NATIONAL LIMITED

STO(K

EG(HANGE

OF

INDIA

The National Sto#. 36#han"e of ,ndia ?imited has "enesis in the report of the %i"h 8owered Stud! 7roup on 3stablishment of New Sto#. 36#han"es$ whi#h re#ommended promotion of a National Sto#. 36#han"e b! finan#ial institutions (2,5s to pro0ide a##ess to in0estors from all a#ross the #ountr! on an equal footin"/ Based on the re#ommendations$ NS3 was promoted b! leadin" 2inan#ial ,nstitutions at the behest of the 7o0ernment of ,ndia and was in#orporated in No0ember 'LL) as a ta6& pa!in" #ompan! unli.e other sto#. 36#han"e in the #ountr!/ :n its re#o"nition as a sto#. e6#han"e under the Se#urities 4ontra#ts (Re"ulation A#t$ 'L>@ in April 'LL=$ NS3 #ommen#ed operations in the 9holesale Debt Mar.et (9DM se"ment in June 'LL(/ The 4apital Mar.et (3quities se"ment #ommen#ed operations in No0ember 'LL( and operations in Deri0ati0es se"ment #ommen#ed in June )***/ NSE GROU% Na. o#al S'$3r . '! (l'ar #0 (or-ora. o# L.7. 8NS((L9 ,t is a wholl! owned subsidiar!$ whi#h was in#orporated in Au"ust 'LL> and #ommen#ed #learin" operations in April 'LL@/ ,t was formed to build #onfiden#e in #learin" and settlement of se#urities$ to promote and maintain the short and #onsistent

settlement #!#les$ to pro0ide a #ounter&part! ris. "uarantee and to operate a ti"ht ris. #ontainment s!stem/

NSE.IT L.7. ,t is also a wholl! owned subsidiar! of NS3 and is its ,T arm/ This arm of the NS3 is uniquel! positioned to pro0ide produ#ts$ ser0i#es and solutions for the se#urities industr!/ NS3/,T primaril! fo#uses on in the area of tradin"$ bro.er front&end and ba#.&offi#e$ #learin" and settlement$ web&based$ insuran#e$ et#/ Alon" with this$ it also pro0ides #onsultan#! and implementation ser0i#es in Data 9arehousin"$ Business 4ontinuit! 8lans$ Site Maintenan#e and Ba#.ups$ Stratus Mainframe 2a#ilit! Mana"ement$ Real Time Mar.et Anal!sis I 2inan#ial News/

I#7 a I#7'; S'r: $'! ) %ro73$.! L.7. 8IISL9 ,t is a -oint 0enture between NS3 and 4R,S,? ?td/ to pro0ide a 0ariet! of indi#es and inde6 related ser0i#es and produ#ts for the ,ndian 4apital mar.ets/ ,t was set up in Ma! 'LL+/ ,,S? has a #onsultin" and li#ensin" a"reement with the Standard and 8oorBs (SI8 $ worldBs leadin" pro0ider of in0estible equit! indi#es$ for #o&brandin" equit! indi#es/

Na. o#al S'$3r . '! D'-o! .or4 L.7. 8NSDL9 NS3 -oined hands with ,DB, and UT, to promote demateriali1ation of se#urities/ This step was ta.en to sol0e problems related to tradin" in ph!si#al se#urities/ ,t #ommen#ed operations in No0ember 'LL@/

NSE Fa$.! ,t uses satellite #ommuni#ation te#hnolo"! to ener"i1e parti#ipation from around (** #ities in ,ndia/ NS3 #an handle up to ' million trades per da!/ ,t is one of the lar"est intera#ti0e <SAT based sto#. e6#han"es in the world/ The NS3& networ. is the lar"est pri0ate wide area networ. in ,ndia and the first e6tended 4& Band <SAT networ. in the world/ 8resentl! more than L*** users are tradin" on the real time&online NS3 appli#ation/ Toda!$ NS3 is one of the lar"est e6#han"es in the world and still for"in" ahead/ At NS3$ we are #onstantl! wor.in" towards #reatin" a more transparent$ 0ibrant and inno0ati0e #apital mar.et/

O6ER THE (OUNTER EG(HANGE OF INDIA

:T43, was in#orporated in 'LL* as a se#tion )> #ompan! under the #ompanies A#t 'L>@ and is re#o"ni1ed as a sto#. e6#han"e under se#tion ( of the se#urities 4ontra#ts Re"ulation A#t$ 'L>@/ The e6#han"e was set up to aid enterprisin" promotes in raisin" finan#e for new pro-e#ts in a #ost effe#ti0e manner and to pro0ide in0estors with a transparent and effi#ient mode of tradin" Modeled alon" the lines of the NASDAP mar.et of USA$ :T43, introdu#ed man! no0el #on#epts to the ,ndian #apital mar.ets su#h as s#reen&based nationwide tradin"$ sponsorship of #ompanies$

mar.et ma.in" and s#rip less tradin"/ As a measure of su##ess of these efforts$ the 36#han"e toda! has ''> listin"s and has assisted in pro0idin" #apital for enterprises that ha0e "one on to build su##essful brands for themsel0es li.e <,8 Ad0anta$ Sonora Tiles I Brilliant mineral water$ et#/

N''7 &or OT(EI: Studies b! NASS4:M$ software te#hnolo"! par.s of ,ndia$ the 0enture #apitals funds and the "o0ernment5s ,T tas.s 2or#e$ as well as risin" interest in ,T$ 8harma#euti#al$ Biote#hnolo"! and Media shares ha0e repeatedl! emphasi1ed the need for a national sto#. mar.et for inno0ation and hi"h "rowth #ompanies/

,nno0ati0e #ompanies are #riti#al to de0elopin" e#onomi#s li.e ,ndia$ whi#h is under"oin" a ma-or te#hnolo"i#al re0olution/ 9ith their abilities to "enerate emplo!ment opportunities and #ontribute to the e#onom!$ it is essential that these #ompanies not onl! e6pand e6istin" operations but also set up new units/ The .e! issue for these #ompanies is raisin" timel!$ #ost effe#ti0e and lon" term #apital to sustain their operations and enhan#e "rowth/ Su#h #ompanies$ parti#ularl! those that ha0e been in operation for a short time$ are unable to raise funds throu"h the traditional finan#in" methods$ be#ause the! ha0e not !et been e0aluated b! the finan#ial world/

(HA%TER I6 1 (OM%ANY %ROFILE

INDIA INFOLINE LIMITED

,ndia ,nfoline is a one&stop finan#ial ser0i#es shop$ most respe#ted for qualit! of its information$ personali1ed ser0i#e and #uttin"&ed"e te#hnolo"!/ 6 ! o# :ur 0ision is to be the most respe#ted #ompan! in the finan#ial ser0i#es spa#e/

I#7 a I#&ol #' Gro3The ,ndia ,nfoline "roup$ #omprisin" the holdin" #ompan!$ ,ndia ,nfoline ?imited and its wholl!&owned subsidiaries$ in#lude the entire finan#ial ser0i#es spa#e with offerin"s ran"in" from 3quit! resear#h$ 3quities and deri0ati0es tradin"$ 4ommodities tradin"$ 8ortfolio Mana"ement Ser0i#es$ Mutual 2unds$ ?ife ,nsuran#e$ 2i6ed deposits$ 7o, bonds and other small sa0in"s instruments to loan produ#ts and ,n0estment ban.in"/

,ndia ,nfoline also owns and mana"es the websites www/indiainfoline/#om and www/>paisa/#om/ The #ompan! has a networ. of o0er )'** business lo#ations (bran#hes and sub&bro.ers spread a#ross more than (>* #ities and towns/ The "roup #aters to appro6imatel! a million #ustomers/

2ounded in 'LL> b! Mr/ Nirmal Jain (4hairman and Mana"in" Dire#tor as an independent business resear#h and information pro0ider$ the #ompan! "raduall! e0ol0ed into a one&stop finan#ial ser0i#es solutions pro0ider/

,ndia ,nfoline re#ei0ed re"istration for a housin" finan#e #ompan! from the National %ousin" Ban. and re#ei0ed the Q2astest "rowin" 3quit! Bro.in" %ouse & ?ar"e firms5 in ,ndia b! Dun I Bradstreet in )**L/ ,t also re#ei0ed the ,nsuran#e bro.in" li#ense from ,RDAC re#ei0ed the 0enture #apital li#enseC re#ei0ed in prin#iple appro0al to sponsor a mutual fundC re#ei0ed QBest bro.er& ,ndia5 award from 2inan#e AsiaC QMost ,mpro0ed Bro.era"e& ,ndia5 award from Asia mone!/

(OM%ANY STRU(TURE ,ndia ,nfoline ?imited is listed on both the leadin" sto#. e6#han"es in ,ndia$ 0i1/ the Sto#. 36#han"e$ Mumbai (BS3 and the National Sto#. 36#han"e (NS3 and is also a member of both the e6#han"es/ ,t is en"a"ed in the businesses of 3quities bro.in"$ 9ealth Ad0isor! Ser0i#es and 8ortfolio Mana"ement Ser0i#es/ ,t offers bro.in" ser0i#es in the 4ash and Deri0ati0es se"ments of the NS3 as well as the 4ash se"ment of the BS3/ ,t is re"istered with NSD? as well as 4DS? as a depositor! parti#ipant$ pro0idin" a one&stop solution for #lients tradin" in the equities mar.et/ ,t has re#entl! laun#hed its ,n0estment ban.in" and ,nstitutional Bro.in" business/

A S3B, authori1ed 8ortfolio Mana"erC it offers 8ortfolio Mana"ement Ser0i#es to #lients/ These ser0i#es are offered to #lients as different s#hemes$ whi#h are based on differin" in0estment strate"ies made to refle#t the 0aried ris.&return preferen#es of #lients/

I#7 a I#&ol #' M'7 a a#7 R'!'ar$" S'r: $'! L / .'7 The ser0i#es represent a stron" support that dri0es the bro.in"$ #ommodities$ mutual fund and portfolio mana"ement ser0i#es businesses/ ,t underta.es equities resear#h whi#h is a#.nowled"ed b! none other than 2orbes as BBest of the 9ebB and BRa must read for in0estors in AsiaB/ ,ndia ,nfolineBs resear#h is a0ailable not -ust o0er the internet but also on international wire ser0i#es li.e Bloomber" (4odeD ,,?? $ Thomson 2irst 4all and ,nternet Se#urities where ,ndia ,nfoline is amon"st the most read ,ndian bro.ers/ I#7 a I#&ol #' (o//o7 . '! L / .'7. ,ndia ,nfoline 4ommodities 80t ?imited is en"a"ed in the business of #ommodities bro.in"/ Their e6perien#e in se#urities bro.in" empowered them with the requisite

s.ills and te#hnolo"ies to allow them to offer #ommodities bro.in" as a #ontra& #!#li#al alternati0e to equities bro.in"/ ,t en-o!s memberships with the M4M and N4D3M$ two leadin" ,ndian #ommodities e6#han"es$ and re#entl! a#quired membership of D74M/ ,t has a multi&#hannel deli0er! model$ ma.in" it amon" the sele#t few to offer online as well as offline tradin" fa#ilities/ I#7 a I#&ol #' MarC'. #0 ) S'r: $'! ,ndia ,nfoline Mar.etin" and Ser0i#es ?imited is the holdin" #ompan! of ,ndia ,nfoline ,nsuran#e Ser0i#es ?imited and ,ndia ,nfoline ,nsuran#e Bro.ers ?imited/ ,ndia ,nfoline ,nsuran#e Ser0i#es ?imited is a re"istered 4orporate A"ent with the ,nsuran#e Re"ulator! and De0elopment Authorit! (,RDA / ,t is the lar"est 4orporate A"ent for ,4,4, 8rudential ?ife ,nsuran#e 4o ?imited$ whi#h is ,ndiaBs lar"est pri0ate ?ife ,nsuran#e 4ompan!/ ,ndia ,nfoline was the first #orporate a"ent to "et li#ensed b! ,RDA in earl! )**'/ ,ndia ,nfoline ,nsuran#e Bro.ers ?imited ,ndia ,nfoline ,nsuran#e Bro.ers ?imited is a newl! formed subsidiar! whi#h will #arr! out the business of ,nsuran#e bro.in"/

I#7 a I#&ol #' I#:'!./'#. S'r: $'! L / .'7 4onsolidated shareholdin"s of all the subsidiar! #ompanies en"a"ed in loans and finan#in" a#ti0ities under one subsidiar!/ Re#entl!$ :rient 7lobal$ a Sin"apore&based in0estment institution in0ested USD A@/A million for a ))/>J sta.e in ,ndia ,nfoline ,n0estment Ser0i#es/ This will help fo#used e6pansion and #apital raisin" in the said

subsidiaries for 0arious lendin" businesses li.e loans a"ainst se#urities$ SM3 finan#in"$ distribution of retail loan produ#ts$ #onsumer finan#e business and housin" finan#e business/ ,ndia ,nfoline ,n0estment Ser0i#es 8ri0ate ?imited #onsists of the followin" step&down subsidiaries/ ,ndia ,nfoline Distribution 4ompan! ?imited (distribution of retail loan produ#ts Mone!line 4redit ?imited (#onsumer finan#e ,ndia ,nfoline %ousin" 2inan#e ?imited (housin" finan#e

IIFL 8A! a9 %r :a.' L / .'7 ,,2? (Asia 8ri0ate ?imited is wholl! owned subsidiar! whi#h has been in#orporated in Sin"apore to pursue finan#ial se#tor a#ti0ities in other Asian mar.ets/ 2urther to obtainin" the ne#essar! re"ulator! appro0als$ the #ompan! has been initiall! #apitali1ed at ' million Sin"apore dollars/

IIFL MANAGEMENT THE MANAGEMENT TEAM

Mr. N r/al 5a #E ("a r/a# ) Ma#a0 #0 D r'$.or Nirmal Jain$ MBA (,,M$ Ahmadabad and a 4hartered and 4ost A##ountant$ founded ,ndia5s leadin" finan#ial ser0i#es #ompan! ,ndia ,nfoline ?td/ in 'LL>$ pro0idin" "loball! a##laimed finan#ial ser0i#es in equities and #ommodities bro.in"$ life insuran#e and mutual funds distribution$ amon" others/

Mr. R 6'#Ca.ara/a#E E;'$3. :' D r'$.or R <en.ataraman$ #o&promoter and 36e#uti0e Dire#tor of ,ndia ,nfoline ?td/$ is a B/ Te#h (3le#troni#s and 3le#tri#al 4ommuni#ations 3n"ineerin"$ ,,T ;hara"pur and an MBA (,,M Ban"alore / %e -oined the ,ndia ,nfoline board in Jul! 'LLL/

THE BOARD OF DIRE(TORS

Apart from Nirmal Jain and R <en.ataraman$ the Board of Dire#tors of ,ndia ,nfoline ?td/ #omprises: Mr. N l'!" 6 Ca/!'4E I#7'-'#7'#. D r'$.or Mr/ <i.amse!$ Board member sin#e 2ebruar! )**> & a pra#ti#in" 4hartered A##ountant and partner (;him-i ;un0er-i I 4o/$ 4hartered A##ountants $ a member firm of %?B ,nternational$ headed the audit

department till 'LL* and thereafter also handles finan#ial ser0i#es$ #onsultan#!$ in0esti"ations$ mer"ers and a#quisitions$ 0aluations et# Mr Sa. %al K"a..arE No# E;'$3. :' D r'$.or Mr Sat 8al ;hattar$ & Board member sin#e April )**' & 8residential 4oun#il of Minorit! Ri"hts member$ 4hairman of the Board of Trustee of Sin"apore Business 2ederation$ is also a life trustee of S,NDA$ a non profit bod!$ helpin" the under&pri0ile"ed ,ndians in Sin"apore/ %e -oined the ,ndia ,nfoline board in April )**'/ Mr Kra#. S #"aE I#7'-'#7'#. D r'$.or Mr/ ;ranti Sinha S Board member sin#e Januar! )**> S #ompleted his masters from the A"ra Uni0ersit! and started his #areer as a 4lass , offi#er with ?ife ,nsuran#e 4orporation of ,ndia/ Mr Ar3# K. %3r:arE I#7'-'#7'#. D r'$.or Mr/ A/;/ 8ur0ar K Board member sin#e Mar#h )**+ K #ompleted his Masters de"ree in #ommer#e from Allahabad Uni0ersit! in 'L@@ and a diploma in Business Administration in 'L@A/

%RODU(TS ) SER6I(ES E23 . '! ,ndia ,nfoline pro0ided the prospe#t of resear#hed in0estin" to its #lients$ whi#h was hitherto restri#ted onl! to the institutions/ Resear#h for the retail in0estor did not e6ist prior to ,ndia ,nfoline/ ,ndia ,nfoline le0era"ed te#hnolo"! to brin" the #on0enien#e of tradin" to the in0estor5s lo#ation of preferen#e (residen#e or offi#e throu"h #omputeri1ed a##ess/ ,ndia ,nfoline made it possible for #lients to 0iew transa#tion #osts and led"er updates in real time/ The 4ompan! is amon" the few finan#ial intermediaries in ,ndia to offer a #omplement of online and offline bro.in"/ The 4ompanies networ. of bran#hes also allows #ustomers to pla#e orders on phone or 0isit our bran#hes for tradin"/ (o//o7 . '! ,ndia ,nfoline5s e6tension into #ommodities tradin" re#on#iles its strate"i# intent to emer"e as a one stop solutions finan#ial intermediar!/ ,ts e6perien#e in se#urities bro.in" has empowered it with requisite s.ills and te#hnolo"ies/ The 4ompanies #ommodities business pro0ides a #ontra&#!#li#al alternati0e to equities bro.in"/ The 4ompan! was amon" the first to offer the fa#ilit! of #ommodities tradin" in ,ndia5s !oun" #ommodities mar.et (the M4M #ommen#ed operations in )**= / A0era"e monthl! turno0er on the #ommodit! e6#han"es in#reased from Rs */=( bn to Rs )*/*) bn/

I#!3ra#$' An entr! into this se"ment helped #omplete the #lientBs produ#t bas.etC #on#urrentl!$ it "raduated the 4ompan! into a one stop retail finan#ial solutions pro0ider/ To ensure ma6imum rea#h to #ustomers a#ross ,ndia$ it has emplo!ed a multi pron"ed approa#h and rea#hes out to #ustomers 0ia our Networ.$ Dire#t and Affiliate #hannels/ ,ndia ,nfoline was the first #orporate in ,ndia to "et the a"en#! li#ense in earl! )**'/ I#:'!. O#l #' ,ndia ,nfoline has made in0estin" in Mutual funds and primar! mar.et so effortless/ :nl! re"istration is needed/ No paperwor. no queues and No re"istration #har"es/ ,ndia ,nfoline offers a host of mutual fund #hoi#es under one roof$ ba#.ed b! in&depth resear#h and ad0i#e from resear#h house and tools #onfi"ured as in0estor friendl!/ ,'al." Ma#a0'/'#. The .e! to a#hie0in" a su##essful ,n0estment 8ortfolio is to ha0e a #arefull! planned finan#ial strate"! based on a thorou"h understandin" of the #lientBs in0estment needs and ris. appetite/ The ,,2? 8ri0ate 9ealth Mana"ement Team of finan#ial e6perts will re#ommend an appropriate finan#ial strate"! to effe#ti0el! meet #ustomer5s in0estment requirements/

A!!'. Ma#a0'/'#. ,ndia ,nfoline is a leadin" pan&,ndia mutual fund distribution house asso#iated with leadin" asset mana"ement #ompanies/ ,t operates primaril! in the retail se"ment le0era"in" its e6istin" distribution networ. to rea#h prospe#ti0e #lients/ ,t has re#ei0ed the in&prin#iple appro0al to set up a mutual fund/ %or.&ol o Ma#a0'/'#. ,,2? 8ortfolio Mana"ement Ser0i#e is a produ#t wherein an equit! in0estment portfolio is #reated to suit the in0estment ob-e#ti0es of a #lient/ ,ndia ,nfoline in0ests the #lient5s resour#es into sto#.s from different se#tors$ dependin" on #lient5s ris.&return profile/ This ser0i#e is parti#ularl! ad0isable for in0estors who #annot afford to "i0e time or donBt ha0e that e6pertise for da!&to&da! mana"ement of their equit! portfolio/ N'=!l'..'r! As a subs#riber to the Dail! Mar.et Strate"!$ #lient5s "et resear#h reports of ,ndia ,nfoline resear#h team on a priorit! basis/ The ,ndiainfoline 9ee.l! Newsletter is the flashba#. for the wee. "one b!/ A wee.l! outloo. #oupled with the best of the web stories from ,ndiainfoline and lin.s to important in0estment ideas$ ?eader Spea. and features is deli0ered in the #lient5s inbo6 e0er! 2rida! e0enin"/

(HA%TER 6 DATA ANALYSIS ) INTER%RETATIONS

ANALYSIS OF AUTOMOBILE INDUSTRY

:0er a period of more than two de#ades the ,ndian Automobile industr! has been dri0in" its own "rowth throu"h phases/ 9ith #omparati0el! hi"her rate of e#onomi# "rowth rate inde6 a"ainst that of "reat "lobal powers$ ,ndia has be#ome a hub of domesti# and e6ports business/ The automobile se#tor has been #ontributin" its share to the shinin" e#onomi# performan#e of ,ndia in the re#ent !ears/ To understand this industr! for the purpose of in0estment we need to anal!1e it b! the followin" approa#hD F3#7a/'#.al A#al4! ! (3/,/4 Approa#h a/ 3#onom! anal!sis b/ ,ndustr! anal!sis #/ 4ompan! anal!sis

F3#7a/'#.al A#al4! !

2undamental anal!sis is the stud! of e#onomi#$ industr! and #ompan! #onditions in an effort to determine the 0alue of a #ompan! s sto#./ 2undamental anal!sis t!pi#all! fo#uses on .e! statisti#s in #ompan! s finan#ial statements to determine if the sto#. pri#e is #orre#tl! 0alued/

Most fundamental information fo#uses on e#onomi#$ industr! and #ompan! statisti#s/ The t!pi#al approa#h to anal!1in" a #ompan! in0ol0es three basi# stepsD

'/ Determine the #ondition of the "eneral e#onom!/ )/ Determine the #ondition of the industr!/ =/ Determine the #ondition of the #ompan!/

1. E(ONOMY ANALYSIS
3#onomi# anal!sis is the anal!sis of for#es operatin" the o0erall e#onom! a #ountr!/ 3#onomi# anal!sis is a pro#ess whereb! stren"ths and wea.nesses of an e#onom! are anal!1ed/ 3#onomi# anal!sis is important in order to understand e6a#t #ondition of an e#onom!/ GD% a#7 A3.o/o@ l' I#73!.r4 ,n absolute terms$ ,ndia is '@th in the world in terms of nominal fa#tor! output/ The ser0i#e se#tor is "rowin" rapidl! in the past few !ears/ This is the pie& #hart showin" #ontributions of different se#tors in ,ndian e#onom!/

Toda!$ automobile se#tor in ,ndia is one of the .e! se#tors of the e#onom! in terms of the emplo!ment/ Dire#tl! and indire#tl! it emplo!s more than '* million people and if we add the number of people emplo!ed in the auto&#omponent and auto an#illar! industr! then the number "oes e0en hi"her/ As the world e#onom! slipped into re#ession hittin" the demand hard and the ban.in" se#tor ta.es #onser0ati0e approa#h towards lendin" to #orporate se#tor$ the 7D8 "rowth has down"raded it to A/' per #ent for )**+&*L and it has in#reased to +/@J in )*'* b! o0er#omin" the setba#.s of re#ession/ R'$'!! o#

Auto industr! in ,ndia had been hit hard b! on"oin" "lobal finan#ial re#ession/ But it is in a "ood shape now/ Mu#h of this optimism resulted from renewed interest bein" shown in ,ndia auto industr! b! reputed o0erseas #ar ma.ers/ Nissan Motors whi#h is a well .nown Japanese #ar ma.in" #ompan! re"arded ,ndia automobile mar.et as a "lobal #ar manufa#turin" hub for future and in0ested hu"e amount in our mar.et/ There are some other automobile #ompanies of world who ha0e shown interest in ,ndia auto mar.et/ Ma-or names amon" these are 7eneral Motors$ S.oda Auto and Mer#edes&Ben1/ These #ompanies ha0e ma-or plans lined up for ,ndia auto industr!/ These are few si"ns of the re0olutioni1ed auto industr! after re#ession/

I#&la. o# The rise in inflation will ha0e ad0erse impa#t on the industr! that will not onl! see interest rates "ettin" further hardened but also a drop in demand due to the squee1e in pur#hasin" power/ The effe#t of inflation has affe#ted e0er! se#tor whi#h is related to #ar manufa#turin" and produ#tion/ The in#rease in the pri#e of fuel and the steel due to inflation has led to a slower "rowth rate of the #ar industr! in ,ndia/ For' 0# D r'$. I#:'!./'#. The automobile se#tor in the ,ndian industr! is one of the hi"h performin" se#tors of the ,ndian e#onom!/ This has #ontributed lar"el! in ma.in" ,ndia a prime destination for man! international pla!ers in the automobile industr! who wish to set up their businesses in ,ndia/ Automati# appro0al for forei"n equit! in0estment up to '** per #ent of manufa#ture of automobiles and #omponent is permitted/ E;-or.! Despite re#ession$ the ,ndian automobile mar.et #ontinues to perform better than most of the other industries in the e#onom! in #omin" futureC more and more MN45s #omin" in ,ndia to setup their 0entures whi#h #learl! shows the s#ope of e6pansion/ Durin" April&Januar! )*'*$ o0erall automobile e6ports re"istered a "rowth rate of '=/)( per#ent/

<. INDUSTRY ANALYSIS (AUT:M:B,?3

The automobile industr! in ,ndia is the ninth lar"est in the world with an annual produ#tion of o0er )/= million units in )**+/ ,n )**L$ ,ndia emer"ed as AsiaBs fourth lar"est e6porter of automobiles$ behind Japan$ South ;orea and Thailand/ The Automobile ,ndustr! is one of the fastest "rowin" se#tors in ,ndia/ The in#rease in the demand for #ars$ and other 0ehi#les$ powered b! the in#rease in the in#ome is the primar! "rowth dri0er of the automobile industr! in ,ndia/ ,n )**L$ estimated rate of "rowth of ,ndia Auto industr! is "oin" to be LJ /The ,ndian automobile se#tor is far from bein" saturated$ lea0in" ample opportunit! for 0olume "rowth/

S'0/'#.a. o# o& A3.o/o@ l' I#73!.r4 The automobile industr! #omprises of %ea0! 0ehi#les (tru#.s$ buses$ tempos$ tra#tors C

passen"er #arsC Two&wheelersC 4ommer#ial <ehi#lesC and Three&wheelers/ 2ollowin" is the se"mentation that how mu#h ea#h se#tor #omprises of whole ,ndian Automobile ,ndustr!/ I#73!.r4 l &' $4$l' The industrial life #!#le is a term used for #lassif!in" industr! life o0er time/ ,ndustr! life #!#le #lassifi#ation "enerall! "roups industries into one of four sta"esD pioneer$ "rowth$ maturit! and de#line/ ,n the pioneer phase$ the produ#t has not been widel! a##epted or adopted/ Business strate"ies are de0elopin"$ and there is hi"h ris. of

failure/ %owe0er$ su##essful #ompanies #an "row at e6traordinar! rates/ The ,ndian automobile se#tor has passed this sta"e quite su##essfull!/ The industr! is "rowin" rapidl!$ often at an a##eleratin" rate of sales and earnin"s "rowth. ,ndian Automoti0e ,ndustr! is boomin" with a "rowth rate of around '> J annuall!/ The "rowth rate of the automobile industr! in ,ndia is "reater than the 7D8 "rowth rate of the e#onom!$ so the automobile se#tor #an be 0er! well be said to be in the "rowth phase/ S=o. a#al4! !: A s#an of the internal and e6ternal en0ironment is an important part of the strate"i# plannin" pro#ess/ 3n0ironmental fa#tors internal to the firm usuall! #an be #lassified as stren"ths (S or wea.nesses (9 $ and those e6ternal to the firm #an be #lassified as opportunities (: or threats (T / Su#h an anal!sis of the strate"i# en0ironment is referred to as a S9:T anal!sis/ S9:T anal!sis of the ,ndian automobile se#tor "i0es the followin" pointsD '& Strengths ?ar"e domesti# mar.et Sustainable labor #ost ad0anta"e 4ompetiti0e auto #omponent 0endor base 7o0ernment in#enti0es for manufa#turin" plants Stron" en"ineerin" s.ills in desi"n et#

(& )eaknesses ?ow labor produ#ti0it!

%i"h interest #osts and hi"h o0erheads ma.e the produ#tion un#ompetiti0e

<arious forms of ta6es push up the #ost of produ#tion

?ow in0estment in Resear#h and De0elopment

,nfrastru#ture bottlene#.

*&

pportunities ,n#reasin" #hallen"es in #onsumer demands$ te#hnolo"! de0elopment$ and "lobali1ation/ %ea0! thrust on minin" and #onstru#tion a#ti0it! ,n#rease in the in#ome le0el 4ut in e6#ise duties

(/ T"r'a.! ,"noran#e of Resear#h I de0elopment Risin" interest rates

4ut throat #ompetition

3. (OM%ANY ANALYSIS
The #ompan! anal!sis shows the lon"&term stren"ht of the #ompan! that what is the finan#ial position of the #ompan! in the mar.et$ where it stands amon" its #ompetitors and who are the .e! dri0ers of the #ompan!$ what are the future plans of

the #ompan!$ what are the poli#ies of "o0ernment towards the #ompan! and how the sta.e of the #ompan! di0ested amon" different "roups of people/ %ere$ , ha0e ta.en three #ompanies namel! TATA Motors$ Maruti Su1u.i and Mahindra and Mahindra for the purpose of fundamental anal!sis/

Tata Motors ?imited is ,ndiaBs lar"est automobile #ompan!$ with #onsolidated re0enues of Rs/ L)$>'L #rores (USD )* billion in )**L&'*/ ,t is the leader in #ommer#ial 0ehi#les in ea#h se"ment$ and amon" the top three in passen"er 0ehi#les with winnin" produ#ts in the #ompa#t$ midsi1e #ar and utilit! 0ehi#le se"ments/ The #ompan! is the worldBs fourth lar"est tru#. manufa#turer$ and the worldBs se#ond lar"est bus manufa#turer/

Maruti Su1u.i is a subsidiar! of Su1u.i Motor 4orporation Japan/ More than half the numbers of #ars sold in ,ndia wear Maruti Su1u.i bad"e/ The! offer a full ran"e of #ars K from entr! le0el Maruti +** I Alto to st!lish hat#hba#. Rit1$ A star$ Swift$ 9a"on R$ 3stillo and sedans D1ire$ SM( and Sports Utilit! <ehi#le 7rand <itara/ Sin#e in#eption$ it has produ#ed and sold o0er A/> million 0ehi#les in ,ndia and e6ported o0er >**$*** units to 3urope and other #ountries/ ,ts turno0er for the fis#al )**+&*L stood at Rs/ )*=$>+= Million I 8rofit after Ta6 at Rs/ ')$'+A Million/

The Mahindra 7roup5s Automoti0e Se#tor is in the business of manufa#turin" and mar.etin" utilit! 0ehi#les and li"ht #ommer#ial 0ehi#les$ in#ludin" three&wheelers/ ,t is the mar.et leader in utilit! 0ehi#les in ,ndia sin#e in#eption$ and #urrentl! a##ounts for about half of ,ndia5s mar.et for utilit! 0ehi#les/ The Automoti0e Se#tor #ontinues to be a leader in the utilit! 0ehi#le se"ment with a di0erse portfolio that in#ludes mass transport as well as new "eneration 0ehi#les li.e S#orpio$ Bolero and the re#entl! laun#hed M!lo/

TATA MOTORS 1 Bala#$' !"''. Bala#$' S"''. o& Ta.a Mo.or!

Mar '05 Sources of funds Total Share Capital Equity Share Capital Share Applicatio !o ey "e#er$e# "e$aluatio "e#er$e# Networth Secure& 'oa # ( #ecure& 'oa # Tota !e"t Tota #$a"$ $t$es %&& $cat$on of funds )ro## *loc+ 'e##: Accu,. -epreciatio Net ' oc( Capital .or+ i /ro0re## )n*est+ents 1 $e torie# Su &ry -e2tor# Ca#h a & *a + *ala ce Total Curre t A##et# 'oa # a & A&$a ce# 3i4e& -epo#it# Total CA% 'oa # 5 A&$a ce# -e66ere& Cre&it Curre t 'ia2ilitie# /ro$i#io # Total C' 5 /ro$i#io # Net ,urrent %ssets Tota %ssets Co ti 0e t 'ia2ilitie# *oo+ 7alue 8"#9 6%611.95 3%454.28 3,157.67 538.84 2,912.06 1%601.36 811.32 345.26 2%757.94 2%831.16 1%659.78 7%248.88 0.00 6%142.74 1%126.06 7%268.80 -19.92 6,606.81 1%450.32 113.65 7%971.55 4%401.51 3,570.04 951.19 2,015.15 2%012.24 715.78 327.66 3%055.68 5%964.61 791.77 9%812.06 0.00 6%673.61 1%215.04 7%888.65 1,923.41 8,473.91 2%185.63 143.94 8%775.80 4%894.54 3,881.26 2%513.32 2,477.00 2%500.95 782.18 535.78 3%818.91 6%208.53 290.98 10%318.42 0.00 6%956.88 1%364.32 8%321.20 1,997.22 10,878.89 5%196.07 177.59 10%830.83 5%443.52 5,387.31 5%064.96 4,910.27 2%421.83 1%130.73 750.14 4%302.70 4%831.36 1%647.17 10%781.23 0.00 10%040.37 1%989.43 12%029.80 -1,248.57 14,120.02 5%590.83 202.70 13%905.17 6%259.90 7,645.27 6%954.04 12,968.13 2%229.81 1%555.20 638.17 4%423.18 5%909.75 503.65 10%836.58 0.00 10%968.95 1%877.26 12%846.21 -2,009.63 25,559.83 5%433.07 240.64 361.79 361.79 0.00 3%749.60 0.00 4,111.39 489.81 2%005.61 2,495.42 6,606.81 382.87 382.87 0.00 5%127.81 26.39 5,537.07 822.76 2%114.08 2,936.84 8,473.91 385.41 385.41 0.00 6%458.39 25.95 6,869.75 2%022.04 1%987.10 4,009.14 10,878.89 385.54 385.54 0.00 7%428.45 25.51 7,839.50 2%461.99 3%818.53 6,280.52 14,120.02 514.05 514.05 0.00 11%855.15 25.07 12,394.27 5%251.65 7%913.91 13,165.56 25,559.83 Mar '06 Mar '07 Mar '08 Mar '09

TATA MOTORS H %ro& . ) Lo!! a$$o3#. %ro& . ) Lo!! a$$o3#. o& Ta.a Mo.or!
Mar '05 )nco+e Sale# Tur o$er E4ci#e -uty :et Sale# Other Income Stoc+ A&;u#t,e t# Tota )nco+e ./&end$ture "a= !aterial# /o=er 5 3uel Co#t E,ployee Co#t >ther !a u6acturi 0 E4pe #e# Selli 0 a & A&,i E4pe #e# !i#cella eou# E4pe #e# /reoperati$e E4p Capitali#e& Total E4pe #e# 0&erat$n1 2rof$t /*-1T 1 tere#t /*-T -epreciatio >ther .ritte >66 /ro6it *e6ore Ta4 E4tra<or&i ary ite,# /*T 8/o#t E4tra<or& 1te,#9 Ta4 3e&orted Net 2rof$t Total 7alue A&&itio /re6ere ce -i$i&e & Equity -i$i&e & Corporate -i$i&e & Ta4 2er share data 4annua $sed5 Share# i i##ue 8la+h#9 .arn$n1 2er Share 43s5 Equity -i$i&e & 8?9 *oo+ 7alue 8"#9 12%245.28 237.81 1%039.34 592.64 890.21 620.27 <282.43 15%343.12 2,000.05 2%404.03 234.30 2%169.73 450.16 67.12 1%652.45 <1.54 1%650.91 415.50 1,236.95 3%097.84 0.00 452.19 63.42 3%617.52 34.19 125.00 113.65 14%633.02 258.51 1%143.13 671.31 1%061.07 740.99 <308.85 18%199.18 2,146.36 2%998.77 350.24 2%648.53 520.94 73.78 2%053.81 0.00 2%053.81 524.93 1,528.88 3%566.16 0.00 497.94 69.84 3%828.34 39.94 130.00 143.94 19%879.56 327.41 1%367.83 872.95 1%505.23 1%051.49 <577.05 24%427.42 2,586.51 3%700.89 455.75 3%245.14 586.29 85.02 2%573.83 <0.07 2%573.76 660.37 1,913.46 4%547.86 0.00 578.07 98.25 3%853.74 49.65 150.00 177.59 20%891.33 325.19 1%544.57 904.95 2%197.49 964.78 <1%131.40 25%696.91 3,030.52 3%764.69 471.56 3%293.13 652.31 64.35 2%576.47 0.00 2%576.47 547.55 2,028.92 4%805.58 0.00 578.43 81.25 3%855.04 52.63 150.00 202.70 18%801.37 304.94 1%551.39 866.65 1%652.31 1%438.89 <916.02 23%699.53 1,723.10 2%644.39 704.92 1%939.47 874.54 51.17 1%013.76 15.29 1%029.05 12.50 1,001.26 4%898.16 0.00 311.61 34.09 5%140.08 19.48 60.00 240.64 20%262.61 3%063.44 17%199.17 403.98 144.00 17,747.15 Mar '06 23%490.55 3%401.92 20%088.63 852.41 256.91 21,197.95 Mar '07 31%089.69 4%425.44 26%664.25 1%114.38 349.68 28,128.31 Mar '08 33%123.54 4%355.63 28%767.91 734.17 <40.48 29,461.60 Mar '09 28%538.20 2%877.53 25%660.67 921.29 <238.04 26,343.92

MARUTI SUIUKI H Bala#$' S"''.

Bala#$' S"''. o& Mar3. S3D3C I#7 a

Mar '05 Sources 0f 6unds Total Share Capital Equity Share Capital Share Applicatio !o ey "e#er$e# "e$aluatio "e#er$e# Networth Secure& 'oa # ( #ecure& 'oa # Tota !e"t Tota #$a"$ $t$es %&& $cat$on 0f 6unds )ro## *loc+ 'e##: Accu,. -epreciatio Net ' oc( Capital .or+ i /ro0re## )n*est+ents 1 $e torie# Su &ry -e2tor# Ca#h a & *a + *ala ce Total Curre t A##et# 'oa # a & A&$a ce# 3i4e& -epo#it# Total CA% 'oa # 5 A&$a ce# -e66ere& Cre&it Curre t 'ia2ilitie# /ro$i#io # Total C' 5 /ro$i#io # Net ,urrent %ssets !i#cella eou# E4pe #e# Tota %ssets Co ti 0e t 'ia2ilitie# *oo+ 7alue 8"#9 5%053.10 3%179.40 1,873.70 42.10 1,516.60 666.60 599.50 79.40 1%345.50 801.90 950.00 3%097.40 0.00 1%454.20 389.20 1%843.40 1,254.00 0.00 4,686.40 893.60 151.56 4%954.60 3%259.40 1,695.20 92.00 2,051.20 881.20 654.80 51.60 1%587.60 933.10 1%350.00 3%870.70 0.00 1%704.80 480.00 2%184.80 1,685.90 0.00 5,524.30 1%289.70 188.73 6%146.80 3%487.10 2,659.70 238.90 3,409.20 713.20 747.40 114.80 1%575.40 1%072.60 1%308.00 3%956.00 0.00 2%288.60 490.50 2%779.10 1,176.90 0.00 7,484.70 2%094.60 237.23 7%285.30 3%988.80 3,296.50 736.30 5,180.70 1%038.00 655.50 324.00 2%017.50 1%173.00 0.00 3%190.50 0.00 2%718.90 369.50 3%088.40 102.10 0.00 9,315.60 2%734.20 291.28 8%720.60 4%649.80 4,070.80 861.30 3,173.30 902.30 918.90 239.00 2%060.20 1%809.80 1%700.00 5%570.00 0.00 3%250.90 380.70 3%631.60 1,938.40 0.00 10,043.80 1%901.70 323.45 144.50 144.50 0.00 4%234.30 0.00 4,378.80 307.60 0.00 307.60 4,686.40 Mar '06 144.50 144.50 0.00 5%308.10 0.00 5,452.60 71.70 0.00 71.70 5,524.30 Mar '07 144.50 144.50 0.00 6%709.40 0.00 6,853.90 63.50 567.30 630.80 7,484.70 Mar '08 144.50 144.50 0.00 8%270.90 0.00 8,415.40 0.10 900.10 900.20 9,315.60 Mar '09 144.50 144.50 0.00 9%200.40 0.00 9,344.90 0.10 698.80 698.90 10,043.80

MARUTI SUIUKI H %ro& . ) Lo!! a$$o3#. %ro& . ) Lo!! a$$o3#. o& Mar3. S3D3C
Mar '05 )nco+e Sale# Tur o$er E4ci#e -uty :et Sale# Other Income Stoc+ A&;u#t,e t# Tota )nco+e ./&end$ture "a= !aterial# /o=er 5 3uel Co#t E,ployee Co#t >ther !a u6acturi 0 E4pe #e# Selli 0 a & A&,i E4pe #e# !i#cella eou# E4pe #e# /reoperati$e E4p Capitali@e& Total E4pe #e# 0&erat$n1 2rof$t /*-1T 1 tere#t /*-T -epreciatio >ther .ritte >66 /ro6it *e6ore Ta4 E4tra<or&i ary ite,# /*T 8/o#t E4tra<or& 1te,#9 Ta4 3e&orted Net 2rof$t Total 7alue A&&itio /re6ere ce -i$i&e & Equity -i$i&e & Corporate -i$i&e & Ta4 2er share data 4annua $7ed5 Share# i i##ue 8la+h#9 .arn$n1 2er Share 43s5 Equity -i$i&e & 8?9 *oo+ 7alue 8"#9 2%889.10 29.55 40.00 151.56 2%889.10 41.16 70.00 188.73 2%889.10 54.07 90.00 237.23 2%889.10 59.91 100.00 291.28 2%889.10 42.18 70.00 323.45 13%458.20 2%411.90 11%046.30 187.50 141.70 11,375.50 8%650.20 58.10 196.00 215.70 374.27 121.73 <22.40 9%593.60 1,594.40 1%781.90 36.00 1%745.90 456.80 16.30 1%272.80 51.40 1%324.20 446.50 853.60 943.40 0.00 57.80 8.20 14%898.80 2%700.90 12%197.90 184.40 199.70 12,582.00 9%423.40 57.20 228.70 302.40 349.51 145.39 <6.70 10%499.90 1,897.70 2%082.10 20.40 2%061.70 285.40 0.00 1%776.30 5.40 1%781.70 560.90 1,189.10 1%076.50 0.00 101.10 14.20 17%358.40 2%552.00 14%806.40 338.10 <200.70 14,943.80 10%863.00 97.40 288.40 392.40 483.26 239.44 <14.30 12%349.60 2,256.10 2%594.20 37.60 2%556.60 271.40 0.00 2%285.20 33.40 2%318.60 705.30 1,562.00 1%486.60 0.00 130.00 21.90 21%200.40 3%133.60 18%066.80 494.00 336.30 18,897.10 13%958.30 147.30 356.20 523.30 521.48 287.62 <19.80 15%774.40 2,628.70 3%122.70 59.60 3%063.10 568.20 0.00 2%494.90 76.60 2%571.50 763.30 1,730.80 1%816.10 0.00 144.50 24.80 23%381.50 2%652.10 20%729.40 491.70 <356.60 20,864.50 15%983.20 193.60 471.10 716.10 751.06 303.44 <22.30 18%396.20 1,976.60 2%468.30 51.00 2%417.30 706.50 0.00 1%710.80 37.90 1%748.70 457.10 1,218.70 2%413.00 0.00 101.10 17.20 Mar '06 Mar '07 Mar '08 Mar '09

MAHINDRA ) MAHINDRA H Bala#$' S"''. Bala#$' S"''. o& Ma" #7ra a#7 Ma" #7ra
Mar '05 Sources 0f 6unds Total Share Capital Equity Share Capital Share Applicatio !o ey /re6ere ce Share Capital "e#er$e# "e$aluatio "e#er$e# Networth Secure& 'oa # ( #ecure& 'oa # Tota !e"t Tota #$a"$ $t$es %&& $cat$on 0f 6unds )ro## *loc+ 'e##: Accu,. -epreciatio Net ' oc( Capital .or+ i /ro0re## )n*est+ents 1 $e torie# Su &ry -e2tor# Ca#h a & *a + *ala ce Total Curre t A##et# 'oa # a & A&$a ce# 3i4e& -epo#it# Total CA% 'oa # 5 A&$a ce# -e66ere& Cre&it Curre t 'ia2ilitie# /ro$i#io # Total C' 5 /ro$i#io # Net ,urrent %ssets !i#cella eou# E4pe #e# Tota %ssets Co ti 0e t 'ia2ilitie# *oo+ 7alue 8"#9 116.01 116.01 0.00 0.00 1%881.93 14.32 2,012.26 336.82 715.80 1,052.62 3,064.88 2%676.51 1%335.56 1,340.95 133.93 1,189.79 759.83 511.53 198.07 1%469.43 461.07 425.91 2%356.41 0.00 1%480.87 499.71 1%980.58 375.83 24.38 3,064.88 758.14 178.95 Mar '06 233.40 233.40 0.00 0.00 2%662.14 13.33 2,908.87 216.68 666.71 883.39 3,792.26 2%859.25 1%510.27 1,348.98 205.46 1,669.09 878.74 637.97 258.39 1%775.10 558.02 471.92 2%805.04 0.00 1%711.23 543.14 2%254.37 550.67 18.05 3,792.25 946.36 124.06 Mar '07 238.03 238.03 0.00 0.00 3%302.01 12.86 3,552.90 106.65 1%529.35 1,636.00 5,188.90 3%180.57 1%639.12 1,541.45 329.72 2,237.46 878.48 700.89 415.89 1%995.26 1%011.50 910.18 3%916.94 0.00 2%138.77 715.43 2%854.20 1,062.74 17.55 5,188.92 1%008.27 148.72 Mar '08 239.07 239.07 0.00 0.00 4%098.53 12.47 4,350.07 617.26 1%969.80 2,587.06 6,937.13 3%552.64 1%841.68 1,710.96 649.94 4,215.06 1%084.11 1%004.88 310.58 2%399.57 866.19 550.65 3%816.41 0.00 2%525.31 943.46 3%468.77 347.64 13.53 6,937.13 985.35 181.43 Mar '09 272.62 272.62 0.00 0.00 4%959.26 12.09 5,243.97 981.00 3%071.76 4,052.76 9,296.73 4%893.89 2%326.29 2,567.60 646.73 5,786.41 1%060.67 1%043.65 635.61 2%739.93 1%402.45 938.82 5%081.20 0.00 3%520.20 1%277.56 4%797.76 283.44 12.55 9,296.73 1%220.39 191.91

MAHINDRA ) MAHINDRA H %ro& . ) Lo!! a$$o3#. %ro& . ) Lo!! a$$o3#. o& Ma" #7ra a#7 Ma" #7ra
Mar '05 )nco+e Sale# Tur o$er E4ci#e -uty :et Sale# >ther 1 co,e Stoc+ A&;u#t,e t# Tota )nco+e ./&end$ture "a= !aterial# /o=er 5 3uel Co#t E,ployee Co#t >ther !a u6acturi 0 E4pe #e# Selli 0 a & A&,i E4pe #e# !i#cella eou# E4pe #e# /reoperati$e E4p Capitali@e& Total E4pe #e# 0&erat$n1 2rof$t /*-1T 1 tere#t /*-T -epreciatio >ther .ritte >66 /ro6it *e6ore Ta4 E4tra<or&i ary ite,# /*T 8/o#t E4tra<or& 1te,#9 Ta4 3e&orted Net 2rof$t Total 7alue A&&itio /re6ere ce -i$i&e & Equity -i$i&e & Corporate -i$i&e & Ta4 2er share data 4annua $7ed5 Share# i i##ue 8la+h#9 .arn$n1 2er Share 43s5 Equity -i$i&e & 8?9 *oo+ 7alue 8"#9 1%116.48 45.92 130.00 178.95 2%334.00 36.72 100.00 124.06 2%380.33 44.88 115.00 148.72 2%390.73 46.15 115.00 181.43 2%726.16 30.69 100.00 191.91 7%649.51 1%054.82 6%594.69 209.74 174.05 6,978.48 4%829.29 52.64 464.25 48.01 545.57 141.95 <31.84 6%049.87 718.87 928.61 30.24 898.37 184.05 0.15 714.17 0.00 714.17 201.50 512.67 1%220.58 0.00 150.81 21.15 Mar '06 9%273.09 1%136.50 8%136.59 455.20 103.20 8,694.99 5%885.21 57.46 551.78 54.44 667.99 177.89 <26.53 7%368.24 871.55 1%326.75 26.96 1%299.79 200.01 0.28 1%099.50 0.00 1%099.50 242.40 857.10 1%483.04 0.00 243.97 34.22 Mar '07 11%231.99 1%310.65 9%921.34 531.17 6.41 10,458.92 6%937.16 65.19 666.15 68.80 891.29 210.03 <47.10 8%791.52 1,136.23 1%667.40 19.80 1%647.60 209.59 0.33 1%437.68 <19.19 1%418.49 350.10 1,068.39 1%854.37 0.00 282.23 42.50 Mar '08 12%894.94 1%584.57 11%310.37 575.96 149.11 12,035.44 7%963.82 91.33 853.65 73.35 1%108.33 257.84 <46.49 10%301.83 1,157.65 1%733.61 87.59 1%646.02 238.66 0.59 1%406.77 0.00 1%406.77 303.40 1,103.37 2%338.01 0.00 282.61 38.48 Mar '09 14%713.03 1%587.05 13%125.98 369.85 <156.29 13,339.54 9%208.71 98.69 1%024.61 75.36 954.83 558.07 <42.83 11%877.44 1,092.25 1%462.10 134.12 1%327.98 291.51 0.00 1%036.47 4.07 1%040.54 199.69 836.78 2%668.73 0.00 278.83 33.23

RATIO ANALYSIS OF TATA MOTORSE MARUTI SUIUKI AND MAHINDRA ) MAHINDRA

EARNINGS %ER SHARE

.%3N)N8S 2.3 S9%3. :.%3S TATA !A"(T1 !AA1:-"A Mar'05 34.19 29.55 45.92 Mar'06 39.94 41.16 36.72 Mar'07 49.65 54.07 44.88 Mar'08 52.63 59.91 46.15 Mar'09 19.48 42.18 30.69

.%3N)N8S 2.3 S9%3.

70 60 50 40 30 20 10 0 !arB05 !arB06 !arB07 :.%3S !arB08 !arB09

TATA !A"(T1 !AA1:-"A

I#.'r-r'.a. o#! 38S measures the profit a0ailable to the equit! shareholders per share$ that is$ the amount that the! #an "et on e0er! share held/ Till )**+ TATA and Maruti had a risin" 38S but in )**L both of them fall and the effe#t is more on Tata motors be#ause of the slump in domesti# and international mar.ets and sharp fall in sales and net profits whi#h resulted in low 38S/ Mahindra is not mu#h affe#ted as its sales ha0e in#reased from the pre0ious !ear/ But as trend shows Mahindra motors has potential so a shareholder #an e6pe#t better in future/

3s

SALES
S%#.S :.%3S TATA !A"(T1 !AA1:-"A Mar'05 20%262.61 13%458.20 7%649.51 Mar'06 23%490.55 14%898.80 9%273.09 Mar'07 31%089.69 17%358.40 11%231.99 Mar'08 33%123.54 21%200.40 12%894.94 Mar'09 28%538.20 23%381.50 14%713.03

S%#.S
35%000.00 30%000.00 25%000.00 20%000.00 15%000.00 10%000.00 5%000.00 0.00 !arB05 !arB06 !arB07 :.%3S !arB08 !arB09

3s $n ,rores

TATA !A"(T1 !AA1:-"A

I#.'r-r'.a. o#! Maruti and Mahindra show a positi0e trend in sales o0er the past fi0e !ears/ Thou"h slowdown in the e#onom! brou"ht hurdles but these #ompanies ha0e potential to "row in future as lots of produ#ts are still to add in their portfolio/ Moreo0er in#reased demand in forei"n mar.et also seems to be a positi0e si"nal for better future/ TATA has witnessed a de#line in sales of ea#h se"ment/ Maruti and Mahindra are "oin" swiftl!/

DI6IDEND %ER SHARE

!);)!.N! 2.3 S9%3. CEA"S TATA !A"(T1 !AA1:-"A !arB05 12.5 2 13 !arB06 13 3.5 10 !arB07 15 4.5 11.5 !arB08 15 5 11.5 !arB09 6 3.5 10

!);)!.N! 2.3 S9%3. 20 15 3s 10 5 0 !arB05 !arB06 !arB07 :.%3S !arB08 !arB09 TATA !A"(T1 !AA1:-"A

I#.'r-r'.a. o#! Tata motors and Maruti Su1u.i both the #ompanies showed a positi0e trend in pa!in" di0idends till )**+$ but the s#enario #han"ed in )**L as both the #ompan!5s di0idend per share fell/ A##ordin" to "raph Tata5s di0idend has fallen drasti#all! while Maruti sti#. to below > per share/ Mahindra has made a sli"ht redu#tion from rs/''/> per share in )**+ to rs/'* per share this !ear/ Therefore Mahindra would be the best option for an in0estor/

RETURN ON IN6ESTMENT 8ROI9

3eturn on )n*est+ent :.%3S TATA !A"(T1 !AA1:-"A Mar'05 30.09 19.49 25.66 Mar'06 27.74 21.81 29.6 Mar'07 27.96 22.79 30.18 Mar'08 25.98 20.56 25.51 Mar'09 8.09 13.04 16.03

3.T<3N 0N )N;.STM.NT
35 30 25 20 15 10 5 0 !arB05 !arB06 !arB07 :.%3S !arB08 !arB09

TATA !A"(T1 !AA1:-"A

I#.'r-r'.a. o#! R:, is one of the most important ratios used for measurin" the o0erall effi#ien#! of a firm and determines whether the in0estments in the firms are attra#ti0e or not/ A##ordin" the "raph$ R:, of TATA has de#lined to a lar"e e6tent in )**L$ ma.in" it a quite ris.! in0estment/ Maruti5s R:, has also de#lined but Mahindra5s R:, is showin" a hi"her rate #ompared to TATA and Maruti in )**L/ As the in0estors would li.e to in0est onl! where the return is hi"her$ Mahindra would be attra#ti0e for in0estment/

DI6IDEND %AYOUT RATIO

!);)!.N! 2%:0<T 3%T)0 :.%3S TATA !A"(T1 !AA1:-"A Mar'05 41.68 7.73 33.54 Mar'06 37.13 9.69 32.45 Mar'07 35.34 9.72 30.39 Mar'08 32.51 9.78 29.1 Mar'09 34.52 9.7 37.29

!);)!.N! 2%:0<T 3%T)0 50 40 = 30 20 10 0 !arB05 !arB06 !arB07 :.%3S !arB08 !arB09 TATA !A"(T1 !AA1:-"A

I#.'r-r'.a. o#! Di0idend pa!out ratio is the per#enta"e of earnin"s paid to shareholders in di0idends/ ,t pro0ides an idea to an in0estor of how well earnin"s support the di0idend pa!ments/ Maruti has maintained a stable pa!out ratio/ Both TATA and Mahindra ha0e in#reased their pa!out ratio in whi#h Mahindra shows a hi"her pa!out ratio/

%RI(E1EARNINGS RATIO 8%?E RATIO9

23),.-.%3N)N8S 3%T)0 :.%3S TATA !A"(T1 !AA1:-"A Mar'05 19.09 21.5 11.1 Mar'06 22.5 22.5 24.6 Mar'07 14.9 18.3 19.1 Mar'08 3.02 8.6 5.9 Mar'09 40.6 36.9 35.2

23),. .%3N)N8S 3%T)0 50 40 = 30 20 10 0 !arB05 !arB06 !arB07 :.%3S !arB08 !arB09 TATA !A"(T1 !AA1:-"A

I#.'r-r'.a. o#! This ratio is widel! used b! in0estors to de#ide whether or not to bu! shares in a parti#ular #ompan!/ As per the "raph$ in )**+$ the 8E3 ratio of the three #ompanies was the lowest #ompared to the pre0ious !ears/ TATA has the hi"hest 8E3 ratio in )**L whi#h indi#ates that it is o0er0alued$ so the in0estors #an benefit b! sellin" the shares/ An in0estor #an "o for Mahindra as its 8E3 ratio is the lowest in )**L whi#h indi#ates that it is under0alued and there is a s#ope for "rowth in the future/

(HA%TER 6I FINDINGSE SUGGESTIONS ) (ON(LUSION

FINDINGS 2rom the data anal!sis and interpretations of the ratios of three #ompanies5 0i1/ Tata Motors$ Maruti Su1u.i and Mahindra and Mahindra$ the followin" findin"s ha0e been "i0enD

The three #ompanies were performin" well till )**+ with a positi0e trend in the earnin"s per share/ But there was a downward trend in )**L/ 3spe#iall!$ TATA has witnessed a steep fall in the !ear )**L/

The sales trend has been upward and positi0e in #ase of all the three #ompanies/ The sales "rowth loo.s positi0e but in the !ear )**L$ TATA5s sales ha0e de#lined whereas Maruti and Mahindra ha0e maintained the same upward positi0e trend/

,n #ase of di0idend per share$ there were flu#tuations durin" the period )**>& )**L/ Due to re#ession$ the di0idends per share ha0e de#lined in all the three #ompanies/ Tata5s di0idend has fallen drasti#all! while Maruti sti#. to below > per share/ Mahindra has made a sli"ht redu#tion from rs/''/> per share in )**+ to rs/'* per share this !ear/

The return on in0estment has been flu#tuatin" sin#e )**> and the !ear )**L witnessed low returns in #ase of all the #ompanies amon"st whi#h TATA has the least rate of return/ 4ompared to the three #ompanies$ Mahindra has the hi"hest R:, in )**L/

Maruti had a stable di0idend pa!out ratio sin#e )**>/ TATA and Mahindra ha0e in#reased their pa!out ratio in whi#h Mahindra shows a hi"her pa!out ratio/

The three #ompanies ha0e witnessed a low pri#e earnin"s ratio in )**+ #ompared to the pre0ious !ears/ But the ratio in#reased in )**L in three #ompanies/ TATA has the hi"hest 8E3 ratio in )**L whi#h indi#ates that it is o0er0alued and Mahindra5s 8E3 ratio is the lowest in )**L whi#h indi#ates that it is under0alued and there is a s#ope for "rowth in the future/

B! anal!1in" the #urrent trend of ,ndian 3#onom! and Automobile ,ndustr! , ha0e found that bein" a de0elopin" e#onom! there is lot of s#ope for "rowth and this industr! still has to #ross man! le0els so there are hu"e opportunities to in0est in and this is bein" pro0ed as more and more forei"n #ompanies are settin" up there 0entures in ,ndia/ ,n#rease in in#ome le0el$ in#rease in #onsumer demand$ te#hnolo"! de0elopment$ "lobali1ation$ forei"n in0estments are few of the opportunities whi#h the industr! has to e6plore for de0elopin" the e#onom!/

SUGGESTIONS B! anal!1in" the automobile industr! with the help of fundamental anal!sis$ it has been re0ealed that this industr! has a lot of potential to "row/ So re#ommendin" in0estin" in Automobile industr! with no doubt is "oin" to be a "ood and smart option be#ause this industr! is boomin" li.e ne0er before not onl! in ,ndia but all o0er the world/ The three "iants of ,ndian Automobile industr! 0i1/ TATA Motors$ Maruti Su1u.i and Mahindra and Mahindra ha0e outperformed in the industr!/

2rom the #ompan! anal!sis$ we #an .now that Mahindra would be a better option for an in0estor #ompared to TATA and Maruti/ ,n 0iew of the slump in the domesti# and international mar.et$ TATA has re#orded a slowdown in sales and in#ome le0el/ ,ts 3arnin"s per share has also de#lined drasti#all!/ ,t has redu#ed its di0idend per share from rs/'> in the pre0ious !ear to rs/@ in )**L/ The return on in0estment is also 0er! low/ ,n 0iew of all these$ TATA is not a better option for an in0estor/

The "lobal turmoil in finan#ial mar.ets has affe#ted Maruti also/ The #ompan! is maintainin" a stable position/ ,ts sales ha0e "rown o0er past fi0e !ears/ ,nspite of the "eneral e#onomi# slowdown$ the sales of Maruti Su1u.i in#reased from Rs )')** 4rore to Rs )==+' 4rore/ As it is maintainin" a stable position$ it #an be re#ommended that for now Maruti share pri#e shows

that it5s a time to hold the position or bu! more shares as there is s#ope of further rise in share pri#es/

Despite the #hallen"in" business en0ironment$ Mahindra has maintained its upward sales le0el/ ,ts Return on ,n0estment is mu#h hi"her #ompared to TATA and Maruti/ The di0idend per share is rs/'* whi#h is hi"her amon"st the three #ompanies/ The #ompan! has potential to "row/ ,t would be the best option for the in0estor/

,n0estin" in Maruti Su1u.i for lon" time #ould be a "ood option whereas in TATA motors there is a #han#e of "ettin" #orre#tion$ as it alread! went on hi"h side in a 0er! short period of time and is e6perien#in" a downfall from )**+/

%oldin" the shares for lon" time #ould be a wron" step and at this point of time those who in0ested earlier #an boo. their profits/ As Mahindra5s shares are under0alued$ the in0estor #an bu! these shares/ This is be#ause a relati0el! lower 8E3 would sa0e in0estors from pa!in" a 0er! hi"h pri#e that does not -ustif! the 0alue of an in0estment/

F'= S300'!. o#! &or *R 0". S.o$C S'l'$. o#+ There are three fa#tors whi#h an in0estor must #onsider for sele#tin" the ri"ht sto#.s/

B3! #'!!D An in0estor must loo. into what .ind of business the #ompan! is doin"$ 0isibilit! of the business$ its past tra#. re#ord$ #apital needs of the #ompan! for e6pansion et#/

Bala#$' S"''.D The in0estor must fo#us on its .e! finan#ial ratios su#h as earnin"s per share$ pri#e&earnin" ratioC debt&equit! ratio$ di0idends per share et# and he must also #he#. whether the #ompan! is "eneratin" #ash flows/

Bar0a # #0D This is the most important fa#tor whi#h shows the true worth of the #ompan!/ An in0estor needs to #hoose 0aluation parameters whi#h suit its business/

I#:'!./'#. r3l'!

,n0est for lon" term in equit! mar.ets Ali"n !our thou"ht pro#ess with the business #!#le of the #ompan!/ Set the purpose for in0estment/ ?on" term "oals should be the ob-e#ti0e of equit! in0estment/ Dis#iplined in0estment durin" mar.et 0olatilit! helps attains profits/ 8lannin"$ ;nowled"e and Dis#ipline are 0er! #ru#ial for in0estment/

(ON(LUSION The Automobile industr! in ,ndia is the se0enth lar"est in the world with an annual produ#tion of o0er )/@ million units in )**L/ ,n )**L$ ,ndia emer"ed as AsiaBs fourth lar"est e6porter of automobiles$ behind Japan$ South ;orea and Thailand/ The #ollapse in mar.et pla#e witnessed unpre#edented turbulen#e in the wa.e of "lobal finan#ial meltdown/ A runawa! inflation tou#hin" a hi"h point of ')J earl! in the !ear$ the ti"ht monetar! poli#ies followed b! the authorities for most of the !ear to #ontrol inflation with the #onsequent hi"h interest rates and wea. #onsumer demand$ ha0e #olle#ti0el! had a de0astatin" effe#t on the automoti0e se#tor/ Maruti Su1u.i ,ndia ?TD/ #ompan! has a trend of "rowth from till )**+/Durin" the finan#ial !ear )**+&*L the there is downfall in the "rowth of the #ompan!/ The main reason behind this downfall is be#ause of the "lobal re#ession/ The downfall of net profit durin" the finan#ial !ear )**+&*L is )L/@J o0er the finan#ial !ear )**A&)**+/ TATA Motors$ whi#h was tr!in" to #onsolidate its leadership position in the mar.et$ also had to fa#e the impa#t of "lobal meltdown/ Amid the #ripplin" e#onomi# #risis$ Tata pur#hased Britain5s Ja"uar ?and Ro0er (J?R from 2ord Motor 4ompan!/ A#quirin" J?R saddled Tata with some tou"h losses/ Di0idends and earnin"s remain low/

,nspite of it bein" a tou"h !ear for all the #ompanies a#ross the "lobe and in ,ndia$ Mahindra has "i0en a satisfa#tor! performan#e/ At present its shares are under0alued "i0in" it a potential for "rowth/ 7lobal re#ession had a dampener effe#t on the "rowth of automobile industr! but it was a short term phenomenon/ The industr! is boun#in" ba#./ :ne fa#tor fa0orin" this point is that ,ndia has be#ome a hot destination for #ompanies of di0erse nature to in0est in/ 4ut throat #ompetition amon" top #ompanies$ lots of new #ar and 0ehi#le model laun#hes at re"ular inter0als .eeps the ,ndian auto se#tor mo0in"/ A #ontinuous effort at #ost #uttin" and impro0in" produ#ti0it! will help the #ompanies in ma.in" reasonable profits despite the impa#t of hi"her #ommodit! pri#es and wea.er rupee/

+he analysis gi#es an optimistic #iew about the industry and its growth which recommends the in#estors to keep a good watch on the ma,or players to benefit in terms of returns on their in#estments&

BIBLIOGRA%HY T';. BooC!

Se#urit! Anal!sis and 8ortfolio Mana"ement by 8unitha0ath! 8andian$ <i.as 8ubli#ations/

Se#urit! anal!sis and portfolio mana"ement by </A/ A0adhani

2inan#ial Mar.ets and Ser0i#es by 7ordon and Natara-an$ %imala!a 8ubli#ations/

2inan#ial Mana"ement by Shashi ; 7upta and R/ ; Sharma$ ;al!ani 8ubli#ations/

N'=!-a-'r!

3#onomi# times Business line

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