A PROJECT REPORT ON “STUDY OF FUNDAMENTAL ANALYSIS OF STOCK MARKET & PORTFOLIO MANAEMENT SERVICE” AT

SHAREKHAN LTD., JAIPUR SUBMITTED TO IASE UNIVERSITY { RAJASTHAN } SUBMITTED BY VIPIN RATHIA MBA –{I st}

TAXILA BUSINESS SCHOOL JAIPUR 2008-2010

ACKNOWLEGEMENT

I feel myself privilege for having an opportunity thank all of them who cooperate me through the project work. I extent my thanks to Mr.pathak director of TAXILA BUSINESS SCHOOL & DEAN Mr.rajat bohra for providing the needed co-operation’s also acknowledge with deep sense of gratitude for valuable guidance and suggestion provided by my project guide Mr.rohan Sharma during the project work. I also extend my thank to Mr. Tarun kacholia, Branch Manager and Mr.Prem sagar of Share khan Securities ltd, jaipur. For providing me all the information, guidance and encouragement. Last but not least; I would like to thank staff of TAXILA BUSINESS SCHOOL, and friends who contributed in every possible way for completing the project.

Project guide Mr.rohan sharma

VIPIN RATHIA MBA I

STUDENT DECLARATION
This is to state that the entitled “STUDY OF FUNDAMENTLE ANALYSIS OF STOCK MARKET & PORTFOLIO MANAGEMENT SERVICE at Share khan securies ltd, Jaipur is the original work carried out by me under the guidance of Mr.Tarun kacholia (Share khan) and Mr. Rohan Sharma as internal project guide, programmed towards partial fulfillment of MBA course under IASE University during the year 2009-2010.

Project guide Mr.rohan sharma

VIPIN RATHIA MBA I

INDEX

3 1.1 3.4 3.5 4 PARTICULARS INTRODUCTION OBJECTIVE OF PROJECT SELECTION OF TOPIC METHODOLOGY OF STUDY LIMITATIONS OF PROJECT PROFILE OF ORGANIZATION BACKGROUND & HISTORY OF ORGANIZATION FLOW CHART OF ORGANITION SERVICES OFFERED BY AN ORGANIZATION FUNDAMENTAL ANALYSIS INTRODUCTION MEANING EIC ANALYSIS FRAMEWORK PORTFOLIO MANAGEMENT SERVICE STRENGTHS & WEAKNESSES CONCLUSION PAGE NO 5 RECOMMENDATIONS & SUGGETIONS 6 BIBLIOGRAPHY .2 3.3 3 3. 1 1.1 1.CHAPTER NO.2 1.3 3.4 2 2.2 2.1 2.

INTRODUCTION .

 To study the various theories which are comes under the technical analysis.  To analyze the factor affecting to technical analysis.OBJECTIVES OF THE PROJECT Under two years of full time course of MBA degree. which a student has to take in joining a specific organization of the choice for a specific period depending upon specialization he has opted for. .  to draft technical analysis of the trade & investment in share market.  To study the scope of technical analysis in share market.  To make the investment risk analysis.  To make technical analysis of share market. a student has to undergo different training programs so as establish himself capable of managing at the place of his job after the completion of the degree.  To analyze overall share market performance. One of such program is preparation of the Project Report.

The movements of share price are a huge quantum of information that is available to investors. . Now a days people also be aware with it and can be a best option for investor to invest in it. Now a day’s share market is most popular sector compared to all sectors and people also more aware with it. It has a bright prospective for the investor in India. And my external project guide Mr. so according to my interest in share market. Rohan sharma also suggested to me to Choose this topic for project.SELECTION OF THE TOPIC As a part of our syllabus whatever be study is going to be useful us in future. I have chosen to do a project in share market. But today its time to have specialization. Share market is raising trend in India. It is only the sector which gives high returns in short period. Technical analysis also helps in timing investment.

The degree of attachment with the original source is main difference between primary data and secondary data. 1. The data that are collected for another purpose and already exists Somewhere is called secondary data.METHODOLOGY OF STUDY Methodology is process of collecting the information and helps to find out the solutions to the topic selected by the researcher. . Where as research help to study and find the techniques with proper process. which is collected from following sources: 1. It is a systematic way of presenting information.  Primary Method:Source from where first hand information are gathered directly are Called primary method.  Secondary Method :Secondary data are collected by others. 3. It gives more detailed information. Interviews & discussions. References from News papers. 2. 2. In order to collect the required information for the project following methods were adapted. References from magazines. References from Web sites. Observations.

Study of the market for limited period 2 monthly only. 2. 3. .LIMITATIONS OF STUDY Every study or analysis has limitations and thus my project at Share khan ltd. This project focuses on only fundamental analysis of share market. The analysis does not involve the interaction with any Fund manager or technical analyst only the information from internet. had some limitations. news papers magazines are used. 1. The analysis was purely based on historical data.

PROFILE OF ORGANIZATION .

BACKGROUND AND HISTORY OF ORGANIZATION Share khan. Get everything you needed a Share khan out let! All you have to do is walk in to organization of 588 share shop across 213 cities in India to get a host of trading related service its friendly customer service staff will also help you with any account related queries you may have. Eagle Eye) 5. . Depository services: Demat & Remat transaction. is the retail arm of SSKI with over 240 share shops in 110 cities. Personalized advice 9. Share khan value line a forthrightly publication with of recommendation. Daily trading calls based on technical analysis.Derivatives trading (Future & options) 12. Trading fing & market strategy) 8. Internet based online trading: Speed trade. Pre market report (Morning cuppa) 6. 3.sharekhan. Live market information 10. speed trade plus. 7. 1. one of the Indian leading brokerage house . Free access to investment advice from Share khan research team. customers enjoy multi – channel access to the stock market. stocks to watch out for etc 4. Online BSE & NSE executives (Through bolt & NEAT terunals) 2. Daily research report & market review (High noon.com . & India’s premier online trading portal www.11. A Share khan outlet offers the following services. Cool trading product (During Derivatives.

 Existing sales support available across 30 branches & 134 Franchisees covering 87 cities.” ADEVENTAGES OF SHAREKHAN DERIVATIVES  We have SMS facility where you will be getting market Information as well as buy/sell calls. maximize performance by adhering to a disciplined investment approach backed by quality research.  Dedicated RM / Dealer support through messenger. You will be Assisted as market information buy / sell recommendation & other Information to guide you through.  Compliments the already existing derivatives related services Being offered by Share khan.SHAREKHAN INVESTMENT PHILOSOPHY “Given the clients risk profile.  Service of an acknowledged institutional & non institutional Research team already available .

FLOW CHART OF ORGANIZATION CEO Securities Broking Corporate Finance Head of Research Head of Sales Executives Executives Independent Sector Sales Manager Executives Executives Independent Sector Manager Dealing Executives The Organization structure is of Head office under which there are 240 branches in 110 cities all over India. .

SERVICES OFFERED BY AN ORGANIZATION .

FUNDAMENTAL ANALYSIS .

dividend and price changes constitute the return from investing in share.to which the company belongs and general economic and socio-political scenario of the country. Such evaluation or analysis is called ‘Fundamental Analysis’ . An investor who would like to be rational and scientific in his investment activity has to evaluate a lot of information about the past performance and the expected future performance of companies. industries and the economy as a whole before taking the investment decision. In many cases.INTRODUCTION The primary motive of buying a share is to sell it subsequently at higher price. Thus. These values are primarily determined by the performance of the company which in turn is influenced by the performance of the industry . Consequently. an investor would be interest to know the dividend to be paid on the share in the future as also the future price of the share These value can only be estimated and not predicted with certainty. dividends are also expected.

Hence. It is based on the basic Premise that share price is determined by a number of fundamental Factors relating to the economy. Fundamentalists do not heed the advice of the random walkers and believe that markets are weak-form efficient. business concept and competition. At the industry level. Fundamental analysis is the examination of the underlying forces that affect the well being of the economy. management. a detailed analysis of the fundamental factors affecting the performance of company. industry groups. Fundamental analysis is. fundamental analysts look to capitalize on perceived price discrepancies. industry fundamental and company fundamental have to be considered while analyzing the security for investment purpose. As with most analysis. industry. there might be an examination of supply and demand forces for the products offered. the Economy fundamental. Industry and company fundamental and thereby assess the intrinsic value of the share. The purpose of fundamental analysis is to evaluate the present and future earning capacity of share based on the economy. . This is called as intrinsic value or fundamental value. To forecast future stock prices. and company analysis to derive a stock's current fair value and forecast future value. For the national economy. the goal is to derive a forecast and profit from future price movements. in other words. Each share is assumed to have an economic worth based on its presents and future earning capacity. fundamental analysis may involve examination of financial data. industry and company. At the company level. By believing that prices do not accurately reflect all available information. fundamental analysts believe that the stock is either over or under valued and the market price will ultimately gravitate towards fair value. and companies. fundamental analysis combines economic. If fair value is not equal to the current stock price. fundamental analysis might focus on economic data to assess The present and future growth of the economy.MEANING OF FUNDAMENTAL ANALYSIS Fundamental analysis is really a logical and systematic approach to Estimating the future dividends and share price.

industry and company fundamentals constitute the main activity in the in the fundamental approach to security analysis. EIC analysis framework In this era globalization we may add one more circle to the diagram to represent the international economy. These can be viewed as different stages in the investment decisionmaking process and can be depicted graphically with three concentric circles as shown in following figure. .EIC Analysis Framework he analysis of economy.

industry and economic factors affect the performance of a company. but also on the general industry and economy factors. Economy wide factors such as growth rate of the economy. Company specific factors such as the age of its plant.the emergence of substitute products. A company belongs to an industry and the industry operates within the economy. brand image of its products. These factors are likely to make a companies performance quite different from that of its competitors in the same industry.The logic of this three tier analysis is that the company performance depends not only on its own efforts. Industry Analysis 3. the quality of management. 2. which affect all companies. its labour management relations. changes in government policy relating to the industry. inflation rate. Industry wide factors such as demand-supply gap in the industry. Company Analysis . These factors affect only those companies belonging to a specific industry. The multitude of factors affecting the performance of a company can be broadly classified as: 1. As such. etc. Economy Analysis 2. etc. Fundamental analysis thus involves three steps: 1. 3. foreign exchange rates. etc.

 Official discount rate ODR or official discount rate is one of the key regulators of national monetary policy. which may give rise to inflation. wars. since finances are required for recovery. ODR increase causes the national currency growth. in the short-term outlook. coups. News may be divided in unexpected and planned (anticipated). Thus. Lombard rate and REPO rate are often used. As a rule. The market is severely affected by wars.) and natural origin (various natural disasters and climatic events). raw material or stock markets is estimated. Anticipated news include meetings of commissions of central banks of different countries. . the currency of the country. Generally all fundamental factors are estimated from two points of view: how this news will influence the official discount rate of this or that country. etc. Unexpected news include news of political (government dismissals. ODR usually indicates at which rate the central bank issues credits to other banks.ECONOMIC ANALYSIS Fundamental analysis studies reasons of price changes at the macroeconomic level and represents analysis of economic and political conditions in countries or separate industries. Increase of ODR usually leads to tightening of monetary policy of the state and slowdown of the national economy growth. but it also causes increased foreign investments to the national economy. With the help of fundamental analysis influence of various events on currency. is getting cheaper. The school of fundamental analysis appeared together with development of applied economic science. Besides ODR. Natural disasters also lead to a fall of the national currency. What are current conditions of the national economy Background data for fundamental analysis are supplied via information channels in the form of news. on which territory military activities take place. where discount rates are discussed and changed. and issue of economical indicators. Knowledge of macroeconomic life of society and its influence on price dynamics of different commodities was taken as the basis. Economic conditions of the country are assessed by many indicators. Let us review influence of the most important of them. but in the long-term outlook high rates hinder economic development of the country and leads to a fall of the national currency exchange rate.

and intermediaries still can derive profits. and you also can find links to information resources at our site. It can be achieved by increase of tax receipts. price increase is caused by credit appreciation. High budgetary deficit leads to the national depth growth and can cause inflation acceleration. First – increase of revenues. FOMC or Meeting are held approximately once in two weeks.  Change of bank reserve rate. accompanied by increase of commodity prices and reduction of actual wages.  Inflation Inflation is devaluation of paper money due to its emission in quantities. Financial institutions suffer from low interest rates. Budgetary deficit level may be regulated by two methods. This leads to increased social tension and produces a general negative effect. Inflation level should be optimal. if the meeting takes place on a neutral territory. High inflation adversely affects economy. stable high production efficiency is observed. exceeding demands of commodity turnover. The main issues of this meeting include:  Change of ODR. increase of ODR by 0. Thus.  Budgetary deficit Budgetary deficit is the state budget surplus. Such meetings are called FOMC (Federal Open Market Committee). With such a level. since high interest rates reduce production efficiency and determine redistribution of capital from production to intermediaries.  Mutual crediting of the coalition countries. the Internet. which will impose burden on taxpayers. Excessively high taxes adversely affect production and stimulate development of black economy. and many things in the financial world depend on results of their decisions. The second method is reduction of production costs at the expense of social programs. interests of intermediaries suffer. Besides that. if the it is presided by the head of FED (Central Reserve System of the United States of America) or Meeting. Dates and results of FOMC meetings have wide publicity in business press. FOMC and Meeting Heads of central banks of the leading countries have regular meetings to discuss issues of economy regulation. .25% USD may lead to USD growth by 100 pips and more within 10-15 minutes. With low inflation or the absence thereof.

 Consumer price index (CPI) Consumer price index shows change of price level for commodities of the consumer goods basket. for each country there is an officially permissible level of effective unemployment. Positive balance. reduction of the middle class and lowering of the net mass of actual income of the population. GDP has a profound effect on the market. if import exceeds export. GDP . With a low level of unemployment. Its effect on the exchange rate is similar with CPI. as a rule.  Trade balance Trade balance is the difference between export and import of commodities. as well as reduction of negative balance. but require extensive experience and practice. lead to increase of the national currency value. workers lose motivation for conscientious work and interests of employers suffer. which consequently cause increase of the national currency exchange rate. Economic indicators Economic indicators provide the most complete idea of the current situation in the national economy. Unemployment growth.Gross domestic product Gross domestic product is one of the basic indicators. If the amount of prices of exported commodities exceeds the amount of prices of imported commodities. Its growth leads to increase of the national currency exchange rate. is accompanied with a fall of the national currency rate.  Producer price index (PPI) Producer price index shows change of price level for industrial goods. High unemployment level contributes to social tension. GDP = consumption + government expenditures + investments + export + import. . However. showing the current situation in the national economy. Let us review some of them and estimate their effect on price dynamics. CPI growth may lead to interest rate increase. trade balance is negative.  Unemployment rate Unemployment is a social-economic phenomenon. when a part of the population cannot find jobs. trade balance is positive.

currencies of energy-dependent countries (Japan. Nikkei-225 .larges production companies of Germany. DAX (DAX-30. Motorola. Growth of prices of state bonds (T-bills.  Elections Parliamentary. American dollar in such cases goes up. T-bonds) leads to increase of the national currency value.UK Stock Index. Germany. Dynamics of prices of oil and energy sources The market is influenced by dynamics of prices of oil and energy sources. excluding the agricultural sector of economy. Standard & Poors) . DJIA (DJIA-24. Growth of the stock market increases the national currency rate. Change of rates depends on pre-election promises of candidates and historical preferences of winning political parties. Dow Jones Industrial Average) .index of 225 leading companies of Japan. . FTSE (FTSE -500) .chares of the biggest US companies. General Electric. As a rule. CAC . as a rule. etc. since it reflects favorable conditions in the corporate sector and vice versa . Including General Motors.French Stock Index. therefore. influence the national currency rate.  Stock market indices Stock market indices represent average cost of stocks (or cost of a share portfolio) of the largest national companies or biggest companies of an industry. Stock indices show the current situation at stock exchanges.a fall of indices moves quotations down. selected according to certain parameters. when oil prices grow. Non-farm payroll This indicator shows quantity of new jobs. presidential and other elections also influence on currency rates. which. XETRA DAX) .cost of elite shares of the United States of America. Increase of this indicator characterizes employment growth and leads to growth of the currency rate. Switzerland) are depreciated. TANKAN. TOPIX etc. For example: S&P (S&P-500.

EXPANTION STAGE Once an industry has established itself enters stage of expantion or growth. As a result there is grate opportunity for profit. upon the stage of the industry to which the belong. growth stage. The performance of companies will depend. there arise high business mortality rates.Weah firm are eliminated and a lesser number of firms survive the pioneering stage.the companies within the industry may also prosperous. be influenced by the fortune of the industry to which belongs. They have identified four stage in the life of product. For this reason an analyst has to undertake an industry analysis so as to the study of fundamental factor affecting the performance of different industries. The Pioneering stage is characterized by rapid growth in demand for the out put industry. This industry life cycle theory is generally attributed Julius Grodinsky. PIONEERING STAGE This is first stage in the industrial life cycle of new indystry where the technology as well as the product are relatively new and have not reached a stage of perfection. In the same way. If an industry of growing. maturity stage and decline stage. 2. At any stage in the economy. Each company can be characterized as belonging to an industry. 1. namely introduction stage. Many companies compete with each other vigorously. an industry is also said to have a life cycle. Industry aalysis refer to an evaluation of the relative strengths and weaknesses of particular industries. INDUSTRY LIFE CYCLE Marketing experts believe that each product has a life cycle. The industry now include only those companies that have survived the pioneerin stage. among among other things. The performance of companies would.INDUSTRY ANALYSIS An investor ultimately invests his money in the securities of one or more specific companies. there are some industries which are fast growing while other stagnating or declining.As large number of companies attempt to capture their share of the market.These companies continue to become stronger.Each economy finds market for itself and develops its owen . therefore.

the industry becomes obsolete and gradually ceases to exist. As a result.strategies to sell and maintain its position in the market. thereby starting a new cycle. Companies in the expansion stage of an industry are quite attractive for investment purposes. medium but steady profitability in the stagnation stage and declining profitability in the decay stage. changes in social habits. The profit associated with the different stages in the life of an industry can be illustrated in the form of an inverted ‘S’ curve as shown in following graph: . The industry begins stagnate. it may resume a process of growth. Two important reasons for this transition are change in social habits and development of improved technology. DECAY STAGE From stagnation stage the industry passes to the decay stage. changes in technology and declining demand are the causes of decay of an industry. high profitability in the expansion stage. Customer have change their habits. Sales may be increasing but at a slower rate than that experienced by competitive industries or by overall economy. Therefore. 4. By the introduction of a technological innovation or a new product. An industry usually exhibits low profitability in the pioneering stage. The competition among the surviving companies brings about improved product at lower price. Thus. The transition of the industry from the expansion stage to the stagnation stage is often very slow. The ability of the industry to growth appears to have been lost. New products and new technology have come to the market. Style & liking. This occurs when the products of the industry are no longer in demand. Companies will earn increasing amounts of profits and pay attractive dividends 3. an investor or analyst has to monitor the industry developments constantly and with diligence. It gives an insight into the apparent merits of investment in a given industry at a given time. the growth of the industry stabilizes. Investors can get high returns at low risk because demand exceeds supply in this stage. Sometimes an industry may stagnate only for a short period. STAGNATION STAGE In this stage. The industry life cycle approach has important implications for the investor.

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model or concept forms the bedrock upon which all else is built.  Financial Analysis The final step to this analysis process would be to take apart the financial statements and come up with a means of valuation. Some of the questions to ask might include: How talented is the management team? Do they have a track record? How long have they worked together? Can management deliver on its promises? If management is a problem. For a new business. Accounts Payable Good Will . model or concepts stink. there is little hope for the business. it is sometimes best to move on.  Business Plan The business plan. Investors might look at management to assess their capabilities. even strong management can make for extraordinary success in a mature industry (Alcoa in aluminum). Below is a list of potential inputs into a financial analysis. The analysis could focus on selecting companies with a sensible business plan. If the plan. Alternatively. an investor might analyze the resources and capabilities within each company to identify those companies that are capable of creating and maintaining a competitive advantage. solid management and sound financials. strengths and weaknesses. the questions may be these: Does its business make sense? Is it feasible? Is there a market? Can a profit be made? For an established business. the questions may be: Is the company's direction clearly defined? Is the company a leader in the market? Can the company maintain leadership?  Management In order to execute a business plan.Company Analysis With a shortlist of companies. a company requires top-quality management. Even the best-laid plans in the most dynamic industries can go to waste with bad management (AMD in semiconductors).

Accounts Receivable Acid Ratio Amortization Assets – Current Assets – Fixed Book Value Brand Business Cycle Business Idea Business Model Business Plan Capital Expenses Cash Flow Cash on hand Current Ratio Customer Relationships Days Payable Days Receivable Debt Debt Structure Gross Profit Margin Growth Industry Interest Cover International Investment Liabilities .Long-term Management Market Growth Market Share Net Profit Margin Pageview Growth Pageviews Patents Price/Book Value Price/Earnings PEG Price/Sales Product .Current Liabilities .

A complete financial model can be built to forecast future revenues. an investor will learn what works best and develop a set of preferred analysis techniques. There are many different valuation metrics and much depends on the industry and stage of the economic cycle.Debt:Equity Ratio Depreciation Derivatives-Hedging Discounted Cash Flow Dividend Dividend Cover Earnings EBITDA Economic Growth Equity Equity Risk Premium Expenses Product Placement Regulations R&D Revenues Sector Stock Options Strategy Subscriber Growth Subscribers Supplier Relationships Taxes Trademarks Weighted Average Cost of Capital The list can seem quite long and intimidating. However. expenses and profits or an investor can rely on the forecast of other analysts and apply various multiples to arrive at a valuation. Ratio Price/Book Value Price/Earnings Company Type Oil Retail . after a while. Some of the more popular ratios are found by dividing the stock price by a key value driver.

an investor will be left with a handful of Companies that stand out from the pack. In addition. an understanding will develop of which companies stand out as Potential leaders and innovators. while those at the low end may constitute relatively good Value.  Putting it All Together After all is said and done. The final step of the fundamental Analysis process is to synthesize all data. An investor may rank companies Based on these valuation ratios. . revenues or growth. analysis and understanding into Actual picks. Over the course of the analysis Process. Those at the high end may be considered Overvalued.Price/Earnings/Growth Price/Sales Price/Subscribers Price/Lines Price/Page views Price/Promises Networking B2B ISP or cable company Telecom Web site Biotech This methodology assumes that a company will sell at a specific multiple Of its earnings. other companies would be considered laggards and unpredictable.

PORTFOLIOS Advisory Products Why Sharekhan Advisory Products • • • • Wide product range to meet diverse needs of clients Disciplined Approach Dedicated Product manager backed by Research Performance track record Share khan Advisory Products: >Derivatives Portfolio >Nifty Portfolio >Mini Portfolio >123 Portfolio >Smart Trade Portfolio >Top Picks >Portfolio Doctor Products TIME HORIZON Short Derivatives Portfolio Nifty Portfolio Mini Portfolio Smart Trade Portfolio Long Top Picks Portfolio Mutual Funds 123 Portfolio Portfolio Doctoring .

Derivatives Portfolio • A model portfolio run by the Sharekhan derivative Team centrally • Ideal for Traders looking for aggressive returns with medium risk • Aggressive • leverage • Actively managed • Super Strike Rate Portfolio Rules Call for Segment Min Investment per call Time frame of call Monitoring Only Derivative Segment calls 20-25 % of corpus as Margin (Quantity also specified) Max : 1 month Derivative Team Min : 1 day Nifty Portfolio Nifty Portfolio – Key facts/Rules • Is a trading portfolio managed by Sharekhan Technical team which generated calls in Index(Both Nifty & Bank Nifty) • Is meant for traders who wants to trade short & Long in Index Nifty Portfolio Ticket Size Max EOD Exposure Min Exposure Expected Upside Stop Loss Reporting Drawdown Rs. 3 lakhs 6 Lots 0 Lots 1-8% 1-4% Shall be done to clients at the End of day & also a Monthly report will be sent 30% .

Mini Portfolio Nifty Portfolio – Key facts/Rules • Is a trading portfolio managed by Sharekhan Technical team which generated calls in • Is meant for traders who wants to trade short & Long in Index • Ideally For the Small Investors Mini Portfolio – Key facts/Rules Mini Portfolio Ticket Size Min Exposure Expected Upside Stop Loss Reporting Drawdown Rs. .Maximum Two lots when both portfolio have same opinion Once the price is 20-30 points above the position the stop loss is revised to the price position including brokerage & taxes Maximum Stop Loss is 50 points All profits earned are distribute at the end of the month No transaction if the portfolio reduced 15% first and next 20%.000 & above 0 Lots 1-8% 1-4% Shall be done to clients at the End of day & also a Monthly report 20% Max EOD Exposure 2 Lots Strategy Used In MiniNifty • • • • • One lot at a time . 50.

5 10-20% 5-10% No stop loss will be given Shall be done to clients at the End of day & also a Monthly report will be sent 25% of clients corpus Smart Trades Portfolio • A model portfolio run by the Sharekhan Advisory Team centrally • Delivery calls are generated by the Advisors based on the market pulse (Not based on fundamental research) • Ideal for Short-term Investor looking for aggressive returns with medium risk • Aggressive • No leverage • Actively managed .123 Portfolio • Is a cash market delivery portfolio • Calls will be generated by Advisory team in consultation with Research Team (Both Fundamental & technical) • Is meant for short term delivery clients with Time frame of 1-3 Months 123 Portfolio – Key facts/ Rules 123 Portfolio . 3 lacs & above Max.Rules Ticket size No of stocks in portfolio Upside returns potential Downside risk Stop loss Reporting Product draw down Rs.

STP: Trading Rules Portfolio Rules Call for Segment Time frame of call Monitoring Only Cash Segment calls Max : 1 month Advisory Team Min : 1 day Min Investment per call 10 % of corpus Top Picks Portfolio • A compilation of the Best Stock Ideas from the Sharekhan basket • Released monthly • Ideal for every Investor. Picked by the highly acclaimed Sharekhan Research Team – Quality Stock Selection – Effective for long term & medium term – Excellent Track Record – Good Strike Rate Portfolio Doctor • Comprehensive analysis of your existing portfolio • Recommendations for improvement on a continuous basis based on “Market Outlook” – Analysis of your existing portfolio – Recommendations from Sharekhan – Creation of a Model Portfolio .

stable earnings. Even some Technicians will agree to that. an investor will be familiar With the key revenue and profit drivers behind a company. In addition to understanding the business. technological or consumer trends can benefit Patient investors who pick the right industry groups or companies. a Strong balance sheet. A stock's price is Heavily influenced by its industry group. Fundamental analysis allows investors to develop an understanding of the Key value drivers and companies within an industry. cyclical (transportation) or Income-oriented (high yield). rewards of fundamental Analysis is the development of a thorough understanding of the business. growth oriented (computer).STRENGTHS & WEAKNASSES Strengths of Fundamental Analysis  Long-term Trends Fundamental analysis is good for long-term investments based on long-term Trends. A good understanding can help investors Avoid companies that are prone to shortfalls and identify those that Continue to deliver. Graham and Dodd. Earnings and Earnings expectations can be potent drivers of equity prices. very long-term. demographic. After such painstaking research and analysis. By studying these groups. Some of the most legendary investors think long-term and Value. . Investors can better position themselves to identify opportunities that are High-risk (tech). non-cyclical (consumer staples). Fundamental analysis can help uncover companies with valuable assets.  Business Acumen One of the most obvious. The ability to identify and predict long-term Economic. low-risk (utilities). and staying power. value Driven (oil).  Value Spotting Sound fundamental analysis will help identify companies that represent a Good value. but less tangible. Warren Buffet and John Neff are seen as the champions of value investing.

which were not really Internet companies. but plain retailers. Weaknesses of Fundamental Analysis  Time Constraints Fundamental analysis may offer excellent insights. but it can be Extraordinarily time-consuming. Time-consuming models often produce Valuations that is contradictory to the current price prevailing on Wall Street. a best-case valuation and a worst-case valuation. the only question is how much so. For this reason. This can get Quite time-consuming. which can limit the amount of research that can be? Performed. the analyst basically claims that the whole Street has got it wrong. Investors can better position themselves to categorize stocks within their Relevant industry group. Knowing a company's business and being able to place it in a group can Make a huge difference in relative valuations. A subscription-based model may work great for an Internet Service Provider (ISP). Any changes to growth or multiplier Assumptions can greatly alter the ultimate valuation. but it is quite brash to imply that the market price. Fundamental Analysts are generally aware of this and use sensitivity analysis to present A base-case valuation. Knowing Who's Who Stocks move as a group. most models are almost always Bullish. When this happens.  Industry/Company Specific Valuation techniques vary depending on the industry group and specifics Of each company. The chart below shows ho . And hence Wall Street is wrong. This happened to many of the pure Internet Retailers. By understanding a company's business. Business can change rapidly and with it the Revenue mix of a company.  Subjectivity Fair value is based on assumptions. even on a worst-case valuation. but is not likely to be the best model to value an Oil Company. However. a different technique and model is Required for different industries and different companies. This is not to say that there are not misunderstood Companies out there.

BIBLIOGRAPHY • • • • • www. >Sharekhan should take a suitable step towards awareness of people to the Insurance and its importance in the life.com www. >Demat account is safe for trading of shares..com www.wikipedia. as it is secured with password. trading.demat.Sharekhan. >We also learnt new thing and different marketing techniques which will definitely help us in brightening our future by applying it in our personal and professional life. which will b of great help to me in the future. >I pursued the knowledge in one of the upcoming segments of the market.com www.google. but only by name. People have a little knowledge about Demat.com References from magazines .CONCLUSION >Working with Sharekhan was a great experience. Suggestion >My first suggestion is that Sharekhan should have to advise those people who want to invest their money.

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