Financial management is that managerial activity which is concerned with the planning and controlling of the firm's financial

resources.Planning,directing,monitoring,organising and controlling of the monetary resources of an organisation. HISTORY OF STOCK EXCHANGE The only stock exchanges operating in the 19th century were those of Bombay set up in 1875 and Ahmedabad set up in 1894. These were organized as voluntary non profit-making association of brokers to regulate and protect their interests. Before the control on securities trading became central subject under the constitution in 1950, it was a state subject and the Bombay securities contracts (control) Act of 1925 used to regulate trading in securities. Under this act, the Bombay stock exchange was recognized in 1927andAhmedbadin1937. FEATURES OF STOCK EXCHANGE It is a place where securities are purchased and sold. it is an association of persons, whether incorporated or not The trading in exchange is strictly regulated. rules and regulations prescribed for various transactions Genuine Investors and speculators buy and sell shares The securities of corporations, trusts, Governments, Municipal corporations etc, are allowed to be dealt on stock exchange. Securities and Exchange Board of India The Government of India set up a body called Securities and Exchange Board of India in April1988. However, the real beginning of SEBI startedin 1992,when the SEBI Act, 1992 was passed and assented by the President of India Fundamental analysis The intrinsic value of an equity shares depends on a multitude of factors. The earnings of the company, the growth rate and the risk exposure of the company have a direct bearing on the price of share. other factors like economic environment in which they function, the industry they belong to, and finally companies own performance. The fundamental school of thought appraised the intrinsic value of share

Company factors to examine include the dividends that company issues, the way a company manages its cash, the amount of debt a company has, and the growth of a company's costs and income the use of fundamental analysis can be viewed as a type of arbitrage. To this end, earnings multiples, such as the P/E ratio, are used to determine value, where cash flows are relatively stable and predictable. Other techniques include discounted cash flow, book value, and dividend yield analysis. Economic Analysis

Industry Analysis Company Analysis

Economic Analysis
The level of economic activity has an impact on investment in many ways. The analysis of Macro Economic environment is essential to understand the behavior of the stock prices. The economically analyzed the macro economic factors are as follows

industry
An industry is a group of firm that has similar technology structure of production and produce similar products. For the convenience of the investor the board classification of the industry is given in financial dailies and magazines. Companies are directly classified to give a clear picture about their manufacturing process and products. For example food products, textiles, wood and wood products, leather and leather products, chemical products and there are many other industries. The competitive edge of the company Major industries in India are composed of hundreds of individual companies. In the information technology industry even though the no of companies like NIIT, SATYAM computers The market share The growth of annual sales The stability of annual sales

Earnings of the company Sales alone do not increase the earning but the costs and expenses of the company also influence the earnings of the company. Further, earnings do not always increase with the increase in the sales The investors should be aware that income of the company may vary due to the following reasons:

Changes in sales C1hanges in cost Inventory accounting method Replacement cost of inventories Wages, salaries and fringe benefits Income taxes and other taxes Capital structure The equity holders return can be increased manifold with the help of financial leverage, i.e. using debt financing along with equity financing Preference shares: Debt 1.Earnings limit of debt 2.Asset limit to debt Financial Analysis 1. Balance sheet 2.Profit and loss account Analysis of financial statements: Comparative financial statements Trend analysis

 Common size statements Funds flow analysis Cash flow analysis Ratio analysis

Fundamental Analysis Tools These are the most popular tools of fundamental analysis. They focus on earnings, growth, and value in the market. For convenience, I have broken them into separate articles. Each article discusses related ratios.

The Articles Are: Earnings per Share EPS Price to Earnings Ratio P/E Projected Earning Growth PEG Price to Sales P/S Price to Book P/B Dividend Payout Ratio Dividend Yield Book Value Return on Equity

Technical analysis refers to the study of price action in securities markets, primarily, but not exclusively, through charts in order to forecast future prices. There are many different methods and tools utilized in technical analysis Charles Dow's Dow Theory is considered the foundation of technical analysis.

 A cliche among technical analysts is, "Forget the fundamentals and follow the money. TOOLS OF TECHNICAL ANALYSIS Technical tools are dow theory, volume of trading, short selling, odd lot trading , bars and line charts , moving averages . In this section some of the above mentioned tools are analysis Dow theory Around the turn of the century, Charles h. Dow formulated a hypothesis that the stock market does not perform on a random basis but is influenced by three distinct cyclical trends that guide its general direction . Dow classified these cycles as primary, secondary, and minor trends. :Charts: charts are the valuable and easiest tools in technical analysis. The graphic presentation of the data helps the investors to find out the trend of the price without any difficulty. 1.Point and figure chart 2.Bar and line charts 3.Chart patterns 4.V-formation 5.Top and bottoms

Objectives of Study
The purpose of doing study is to analyze the factor that affect the companys performance To examine the internal and external factors affecting the future price of company The purpose includes assessing the future market strength of company The purpose also serves the investors to decide whether to invest in company shares to gain returns Limitations of Study The study is based on information which is secondary

 The study is basically on Pharma industries For analysis purpose two pharmaceutical companies are taken into consideration The sample size is restricted to two companies

Analysis of Dr. reddys Ltd

Since its inception in 1984, DR. Reddys has chosen to walk the path of discovery and innovation in health sciences. There has been a quest to sustain and improve the quality of life, and they have has nearly two decades of creating safe Pharmaceutical solutions with the ultimate purpose of making the world a healthier place. Milestones: In 2002 Dr. reddys makes its first overseas acquisition of BMS laboratories li mited and meridian healthcare, UK. In 2001 on April 11, Dr. reddys becomes the first Asia Pacific Pharmaceutical company, outside Japan, to list on the New York stock exchange. Analysis of Cipla Ltd. History: Khwaja Abdul Hamied, the founder of Cipla, was born on October 31, 1989. In college, he found chemistry fascinating. He set sail for Europe in 1924 and got admission in Berlin University as a research student of the Technology of Barium compounds. He earned his doctorate Three Years later. In October 1927, during the long voyage from Europe to India In 1935, he set up the chemical, industrial &pharmaceutical Laboratories, which came to be popularly known as cipla. On August 17, 1935, cipla was registered as a public limited company Cipla was officially opened on September 22, 1973 when the first products were ready for the market. SUGESSTIONS

 The investor should analyze the risk factors which can affect the prices of share before marketing investment decision For long term benefit emphasis should be given to both fundamental and technical analysiss Investment decision should also be based on risk return analysis For Investment decisions, future prospects of the company should also be taken into consideration The Investor should also analyze the behavior of the market as a whole as well the behavior of movement of the share in which the investor is likely to invest

Findings and conclusions Helpful for investor for taking investment decisions The Investor can know the risk and return of the share by analyses This analysis is useful for investor who wants to go for long and short term investment The Investor can estimate the future EPS with the help of historical data The Financial statements of company reveal the needed information for investor to make investment decisions The ratio analysis helps the investor to study the individual parameters like profitability, liquidity and solvency of stocks Fundamental analysis is used to predict long-term share price movement Technical analysis is used to forecast the supply and demand by studying the price and volume of trading by using technical analysis the moment investor is able to know growth of share Technical analyst short term share price