Chandan Project Report

EQUITY INVESTMENT & ECNOMIC
GROWTH IN INDIA (2000-2008) AND

PROJECT
MARKETING STRATEGIES OF RELIGARE
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EQUITY INVESTMENT & ECNOMIC GROWTH IN INDIA (2000-
2008) AND MARKETING STRATEGIES OF RELIGARE
Submitted in partial fulfillment of the requirements
For the award of the degree of
Master of Business Administration

In
Software Enterprise Management
Under the guidance of
Advisor: Mary Jacintha

(Lecturer)
CDAC Noida
Supervisor: Amandeep Shaney

(AVP)
RELIGARE SECURITIES
Submitted by: Chandan Parsad
MBA (SEM)
Roll NO.: 06
Enrollment No: 0061189908
Centre for Development of Advanced Computing,

Noida
Affiliated to
Guru Gobind Singh Indraprastha University
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DECLARATION
I hereby declare that this Project Report entitled: EQUITY INVESTMENT &
ECNOMIC GROWTH IN INDIA (2000-2008) AND MARKETING STRATEGIES OF
RELIGARE submitted by me to the GGSIPU Delhi, is a bonafide work undertaken by
me and it is not submitted to any other University or Institution for the award of any
degree diploma / certificate or published any time before.
Name: Chandan Parsad
Signature of the Student
Enrollment No: 0061189908
Semester :
Date :
3
Certificate
This is to certify that the project report entitled

“EQUITY INVESTMENT & ECNOMIC GROWTH IN INDIA (2000-2008) AND
MARKETING STRATEGIES OF RELIGARE” done by Mr. Chandan Parsad enrollment
No 0061189908 is an authentic work carried out by him at RELIGARE under my
guidance. The matter embodied in this project work has not been submitted earlier for
the award of any degree or diploma to the best of my knowledge and belief.
Date:
Signature of the Supervisor
Name of the Guide: Amandeep Shaney
Designation : (AVP)
Organization Name: RELIGARE SECURITIES
Address : G-16, Marina Arcade
Connaught Place
Delhi-110001
Signature of the Internal Guide
(Mary Jecintha)
FINAL APPRAISAL PERFORMA
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Name of Student: Chandan Parsad
Roll No: 0061189908
Project : EQUITY INVESTMENT & ECNOMIC GROWTH IN INDIA (2000-2008) AND

Name of Organization: RELIGARE SECURITIES
Address: G-16, Marina Arcade Connaught Place Delhi- 110001
Supervisor: Amandeep Shaney
Phone No: 9871952726
Period of evaluation: From _________To _________
Marks Awarded
Sr.No Criteria
(each out of 10)
1. Punctuality
2. Regularity of Work
3. Improvement in Communication Skills
4 Improvement in Learning
5. Improvement in confidence
6. Leadership/Team Work
7. Self motivation
8. Initiative & Dedication
9 Discipline & Sincerity
10 Problem Solving Capability
Grand total
Signature of Project Supervisor
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ACKNOWLEDGEMENTS
First, I thank my Supervisor Mr.Amandeep Shaney (AVP) for his continuous support
to making this project Mr. Amandeep Shaney (AVP) was always there to listen and to
give advice. He is responsible for involving me in this project in the first place. He
taught me how to ask questions, express my ideas which company I will select &
which technique used for analysis. He showed me different ways to approach for the
analysis.
I also thank the other two Mr. Shahnawaz Ali (Manager), Miss Kanika Arora (Senior
R.M.), who as my minor advisor guided me for study of share market and market
strategies of RELIGARE
Thanks also to Miss Mary Jecintha (Lecturer) CDAC Noida for teaching me Financial
Management and how to do a usability study, a skill that confirmed my intuition that
need a drawing environment to access knowledge-based systems .
Special thanks goes to my friends Mr. Anuj Hooda and Miss Seema, who is most
responsible for helping me complete the writing of this Project
Abstract
Objective: The main objective of the project is to analyses the importance of
equity investment in the process of economic development in India by developing a
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‘multivariate regression model’ for the period 2000-08 and to evaluate the reforms of
the stock-market initiated by the government of India during this period and also future
perspective.
Scope of Work
Equity investment in Nifty50 Index during January09 to june09
Company Name
Reliance Industry Ltd
SBI
Larsen & Tourbo Ltd
Infosys Technology Ltd
Tata Steel
Mahindra Satyam Comp
Marketing STRATEGIES of Religare
Effect of Economy Growth on share Market
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Table of Contents
• Chapter 1 P. No.
1. INTRODUCTION 12
2. Religare Profile 13
3. Background of Indian economy 16
4. Indian Equity Introduction 17
• Chapter 2
1. Equity Analysis Introduction 19
2. Fundamental Analysis Introduction 19
3. Technical Analysis Introduction 22
• Chapter 3
1. Company Equity Analysis 36
2. State Bank Of India Equity 36
3. Reliance Industry Ltd Equity 40
4. Larsen & Toubro Ltd. Equity 45
5. Infosys Equity 50
6. Tata steel Equity 55
7. Satyam computers Equity 60
• Chapter 4
1. Effect of Economic Growth on Share Market 63
2. Inflation rate 63
3. GDP 63
4. Labor market 64
5. Economic Growth Indicator 65
6. Table Economic Growth and Share Market (2000-2009) 67
• Chapter 5
1. Marketing Strategies of Religare 69
2. Comparisons between the Religare and other Trading company 70
3. Suggestions 71
4. Bibliography 72
5. Appendices 73
LIST OF TABLE
• SBI P. No.
8
1. Profit & Loss Sheet 36
2. Intraday support & resistance 38
3. Moving averages 38
4. Trading range (historical) 38
5. Support and Resistance 38
• Reliance Industry Ltd
3. Moving average 42
• Larsen & Toubro Ltd.

• Infosys
• Tata steel
• Satyam computers
• Economic Growth Table 1 67
• Economic Growth Table 2 67
• Comparisons between the Religare and other Trading company 70
List of figures
P.No.
9
1. Line Chart 23
2. Bar chart 23
3. Candlestick Chart 24
4. MACD chart 26
5. Simple Moving Average (SMA) 28
6. Relative Strength Index 29
7. Fibonacci percentages 31,32
8. Technical Analysis SBIN (6month) Chart 39
9. Technical Analysis Reliance Industry Ltd (6month) Chart 43
10. Technical Analysis Larsen & Toubro Ltd (6month) Chart 48
11. Technical Analysis Infosys (6month) Chart 53
12. Technical Analysis Tata steel (6month) Chart 58
13. Technical Analysis Satyam computers (6month) Chart 61
14. Advantage of Religare Online account 69
Chapter 1
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INTRODUCTION
Religare Profile
Background of Indian economy
Indian Equity Introduction
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Introduction to the Project
Introduction
A well functioning financial sector helps channel the resources to its most productive use and
distributes the risk optimally across space and time thus induces economic growth. There are ample
evidences from the literature that the degree of financial sector development especially a vibrant stock
market facilitates long run growth (Levine, 1991; Bensivenga et al., 1995). Cross country growth
regressions show that stock market liquidity is a contributing factor to economic growth even after
controlling for initial income and political stability Both Rousseau and Wachtel (2000) and Arestis,
Demetriades and Luintel (2000) show that stock market liquidity and banking development both
predict the future growth of the economy. These empirical studies grossly confirm the theoretical
predictions of Levine and Zervos (1996) and Demirguc-Kunt (1994) that stock markets can give a big
boost to economic development. Contrarily some of the recent studies show that the impact of stock
market on economic growth is country specific as relationship between intermediation and growth
critically depends upon the legal, regulatory and political environment of the countries. This project
explores the significance of the legal determinants of stock market development in a time series
context for India. We model the determinants of stock market development along with conventional
stock market development and economic growth as a single system to analyze the interlink ages
among them. Recent developments in law and finance literature maintain that underdeveloped legal
apparatus for financial contract enforcement would constrain the firm’s ability to raise funds from
outside sources either by equity or debt. If external funds are constrained, so is investment and
technology intensive long-term investment induced growth.
Stock market development i.e. the market for external funds critically depends on information
gathering cost and monitoring costs. Legal institutions that define and protects the rights of the
shareholders and creditors would crucially determine the level of expropriation and agency costs and
increase the value for the principles i.e. the shareholders. These rights are typically defined in the
contract, company, bankruptcy, and securities laws and the country’s property rights regime. The law
and finance theory holds that in countries where legal systems enforce private property rights, support
private contractual arrangements, and protect the legal rights of investors are more willing to finance
firms; there would be more savings as lesser premium required to part with the savings in a less risky
environment thus financial markets flourish.
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Religare Profile
Religare Securities Limited (RSL), a 100% subsidiary of Religare Enterprises Limited is a leading
equity and securities firm in India. The company currently handles sizeable volumes traded on NSE
and in the realm of online trading and investments; it currently holds a reasonable share of the market.
The major activities and offerings of the company today are Equity Broking, Depository Participant
Services, Portfolio Management Services, International Advisory Fund Management Services,
Institutional Broking and Research Services. To broaden the gamut of services offered to its
investors, the company offers an online investment portal armed with a host of revolutionary features.
• RSL is a member of the National Stock Exchange of India, Bombay Stock Exchange
of India, Depository Participant with National Securities Depository Limited and Central
Depository Services (I) Limited, and is a SEBI approved Portfolio Manager.
• Religare has been constantly innovating in terms of product and services and to offer
such incisive services to specific user segments it has also started the NRI, FII, HNI and
Corporate Servicing groups. These groups take all the portfolio investment decisions
depending upon a client’s risk / return parameter.
• Religare has a very credible Research and Analysis division, which not only caters to
the need of our Institutional clientele, but also gives their valuable inputs to investment
dealers.
Religare Offerings
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Equity & Derivatives
Trading in Equities
with Religare truly
empowers you for
your investment
needs...
Trading in Equities with Religare truly empowers you for your investment needs. We ensure you
have a superlative trading experience through -
• A highly process driven, diligent approach

• Powerful Research & Analytics and
• One of the “best-in-class” dealing rooms
Further, Religare also has one of the largest retail networks, with its presence in more than
1800* locations across more than 490* cities and towns. This means, you can walk into any of these
branches and connect to our highly skilled and dedicated relationship managers to get the best
services.
The Religare Edge

• Pan India footprint
• Powerful research and analytics supported by a pool of highly skilled research
analysts
• Ethical business practices
• Offline/Online delivery models
• Single window for all investment needs through your unique CRN
Portfolio Management Services

Religare offers Portfolio Management Service to address the
varying investment preferences...
Our Schemes
Monarque Monarque is ideally suitable for investors with "High Risk High Return" appetite.
Panther It is suitable for the “High Risk High Return” investor with a strategy to invest across
sectors and take advantage of various market conditions
Tortoise This plan is suitable for the “Low Risk Low Return” investor with a strategy to invest in
blue chip companies, as these companies have steady performance and reduce liquidity risk in the
market
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Caterpillar This scheme is suitable for investors with a high risk appetite.
Leo This scheme is a mix of moderate and aggressive investment strategies. Its aim is to have a
balanced portfolio comprising selected investments from both Tortoise and Panther.
Currency Futures
Now, experience the excitement of the world's most traded
financial instrument with Religare...
Benefits of Currency Futures
• High Liquidity
• Extended trading hours - 9 am to 5 pm
• Opportunities to reap benefits owing to a highly dynamic market
• Small lot size of only US $1000 with low exchange specified margins
Currency Futures is best suited for -
• SMEs / Individuals involved in Imports/Exports

• Corporate/ Institutions involved in Imports/Exports and anybody else who has foreign
currency exposure
Background of Indian economy

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1. The Indian economy has been growing at an average rate of 6% per year since the 1991 launch of
economic reforms and liberalization of trade and investment. While agriculture has traditionally been
India’s largest economic sub-sector, the past decade has seen the services sector emerge as the largest
component of gross domestic product (GDP). According to recent research, the main factors
underlying India’s long-term growth are rationalization of the domestic economy (i.e., improving
total productivity) and, more recently, exports of information technology and information
technology–enabled services.
2. Over the last 10 years, the Indian Government has introduced wide-ranging changes to accelerate
economic growth and integrate the Indian economy with the rest of the world. These reforms have
primarily minimized or reduced the role of government in industry and trade, and improved the
competitiveness of Indian industry.
3. Some of the key governmental measures have been:
1 (i) Simplifying the process of setting up businesses. In particular, the business

licensing requirement has been abolished for most industries.
2 (ii) Rationalizing the tax regime, including lowering tariff barriers, reducing marginal
tax rates, and simplifying tax procedures.
3 (iii) Simplifying the trade regime and achieving full convertibility of the rupee.
4 (iv) Improving the overall investment climate by liberalizing many restrictions on
investment, including some major limitations on foreign investment, deregulating
interest rates, and opening up the insurance sector to private sector participation.
5 (v) Developing the infrastructure sector by encouraging private participation in power,
telecom, ports, and roads, and reforming the power sector to improve efficiencies.
6 (vi) Reducing the role of government in industry and introducing a program to make
prices in the petroleum sector market-driven.
7 (vii) Implementing labor reforms, including amendments to the Industrial Disputes Act
allowing easier closure and layoffs of workers in economically unviable companies, to
encourage companies to hire employees more quickly, and changes in the wage
ceilings set in the Payment and Wages Act.
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1. Indian Equity Industry
1. The private equity industry in India is more than 19 years old. The first venture capital
fund, TDICI Ltd. (now known as ICICI), was established in 1988.
2. In India today, many funds that have been set up in the last 9 years are focused on
information technology (IT). In contrast, the portfolio of more established funds shows a
broad exposure to a variety of commercial sectors and stages of investment including
investments in early-stage companies. The portfolio performance of many of the IT-focused
funds has, with few exceptions, mimicked the dismal performance of similar portfolios
globally. Many institutional investors that invested in such funds in the late 1990s therefore
became wary of any potential investment management entity that called itself a “venture
capital” or “private equity” fund, resulting in a drop in assets managed by these entities.
However, the funds that built a more diverse portfolio have tended to perform better and
demonstrated a number of successful exits through trade sales and initial public offerings
(IPOs).
3. In 2008, funds broadened their interest to a range of sectors including manufacturing,

health care, banking and financial services, pharmaceuticals, engineering, textiles, and
telecommunications technology. The thriving market for business process outsourcing
services continued to be a favorite.
4. Successful exits in recent years and good returns by diversified funds have led to a slight
change in thinking among many Indian banks, financial institutions, and insurance
companies. With their relatively robust returns, these funds and investment teams look more
attractive to domestic institutional investors. As interest rates have fallen precipitously, asset
managers have had to start looking at private equity as an alternative asset class for
investments.
5. While many investors have allocated more to private equity as an alternative asset class,
private equity is still underinvested because not enough fund managers have the experience
and financial backing needed to ensure sustainable operations. As a result, the private equity
Investment rate in India is still well below the levels in the Republic of Korea and Singapore
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Chapter 2
Equity Analysis Introduction.
Fundamental Analysis Introduction
Technical Analysis Introduction
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Stock Picking - Which stocks to buy?
Before picking the right stock you need to do some analysis.
There are two major types of analysis:

1.FundamentalAnalysis
2.TechnicalAnalysis
Fundamental analysis is the analysis of a stock on the basis of core financial and
economic analysis to predict the movement of stocks price.
On the other hand, technical analysis is the study of prices and volume, for forecasting of future stock price or
financial price movements.
Simply put, fundamental analysis looks at the actual company and tries to figure out what the company price is
going to be like in the future. On the other hand technical analysis look at the stocks chart, peoples buying
behavior etc. to try and figure out what the stock price is going to be like in the future.
Technical analysis is a little more complicated. It is much more of an "art" than a science. It depends more on
experience and involves some statistics and mathematics
Fundamental analysis of Stock’s
Fundamental analysis is a stock valuation method that uses financial and economic analysis to predict
the movement of stock prices.
The fundamental information that is analyzed can include a company's financial reports, and non-
financial information such as estimates of the growth of demand for products sold by the company,
industry comparisons, and economy-wide changes, changes in government policies etc..
Earnings per share (EPS) ratio & what it means!
Even comparing the earnings of one company to another really doesn’t make any sense, if you think
about it. Earnings will tell you nothing about how many shares the company has. Because you do not
know how many shares a company has, you do not know how many parts that company’s earnings
have to be divided into. If the company has more shares, the earnings will be divided into more parts.
For example, companies A and B both earn Rs.100, but company A has 10 shares outstanding, so
each share holder has in effect earned Rs.10.
On the other hand, if company B has 50 shares outstanding and they too have earned Rs.100 then
each shareholder has earned Rs.2. So you see it is important to know what is the total number of
outstanding shares are as well as the earnings.
Thus it makes more sense to look at earnings per share (EPS), as a comparison tool. You calculate
earnings per share by taking the net earnings and divide by the outstanding shares.
EPS= Net Earnings/Outstanding Shares

So looking at the EPS ratio, you should go buy Company A with an EPS of 10, right? EPS is not the
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only basis of comparing two companies, but it is one of the methods used.
Note that there are three types of EPS numbers:
• Trailing EPS – last year’s numbers and the only actual EPS
• Current EPS – this year’s numbers, which are still projections
• Forward EPS – future numbers, which are obviously projections
EPS doesn’t tell you whether it’s a good stock to buy or what the market thinks of it.
For that information, we need to look at some other ratios next....
Price earnings ratio (P/E ratio) is the ratio between market price per equity share and earning per
share. The ratio is calculated to make an estimate of appreciation in the value of a share of a company
and is widely used by investors to decide whether or not to buy shares in a particular company
Price Earnings Ratio = Market price per equity share / Earnings per share
Example:
The market price of a share is $30 and earning per share is $5.
Calculate price earnings ratio.
Calculation:
Price earnings ratio = 30 / 5 = 6
The market value of every one dollar of earning is six times or $6. The ratio is useful in financial
forecasting. It also helps in knowing whether the share of a company are under or over valued. For
example, if the earning per share of AB limited is $20, its market price $140 and earning ratio of
similar companies is 8, it means that the market value of a share of AB Limited should be $160 (i.e.,
8 × 20). The share of AB Limited is, therefore, undervalued in the market by $20. In case the price
earnings ratio of similar companies is only 6, the value of the share of AB Limited should have been
$120 (i.e., 6 × 20), thus the share is overvalued by $20.
Significance of Price Earnings Ratio:
Price earnings ratio helps the investor in deciding whether to buy or not to buy the shares of a
particular company at a particular market price.
Generally, higher the price earning ratio the better it is. If the P/E ratio falls, the management should
look into the causes that have resulted into the fall of this ratio.
Return on Shareholders Investment or Net Worth Ratio:
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It is the ratio of net profit to share holder's investment. It is the relationship between net profit (after
interest and tax) and share holder's/proprietor's fund. This ratio establishes the profitability from the
share holders' point of view. The ratio is generally calculated in percentage
Components:
The two basic components of this ratio are net profits and shareholder's funds. Shareholder's funds
include equity share capital, (preference share capital) and all reserves and surplus belonging to
shareholders. Net profit means net income after payment of interest and income tax because those
will be the only profits available for share holders.
[Return on share holder's investment = {Net profit (after interest and tax) / Share holder's
fund} × 100]
Example:
Suppose net income in an organization is $60,000 where as shareholder's investments or funds are
$400,000.
Calculate return on shareholders investment or net worth
Return on share holders investment = (60,000 / 400,000) × 100 = 15%
This means that the return on shareholders funds is 15 cents per dollar
Significance:
This ratio is one of the most important ratios used for measuring the overall efficiency of a firm. As
the primary objective of business is to maximize its earnings, this ratio indicates the extent to
which this primary objective of businesses being achieved. This ratio is of great importance to
the present and prospective shareholders as well as the management of the company. As the
ratio reveals how well the resources of the firm are being used, higher the ratio, better are the
results. The inter firm comparison of this ratio determines whether the investments in the firm
are attractive or not as the investors would like to invest only where the return is higher
TECHNICAL ANALYSIS
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Technical Analysis is the study of prices and volume, for forecasting of future stock price or
financial price movements. Technical analysis can help investors anticipate what is "likely" to happen
to prices over time.
Technical analysis is not an exact science. It's an art and takes considerable experience. But don't
worry everyone with each knowledge can learn it.
Technical Analysis Basic Principles
Technical Analysis is based on these three basic principles:
1 - Price Discounts Everything
Technical analysts believe that the current price fully reflects all information. Because all information
is already reflected in the price, it represents the fair value, and should form the basis for analysis.
After all, the market price reflects the sum knowledge of all participants, including traders, and …
Stock Market Technical analysis utilizes the information captured by the price to interpret what the
market is saying with the purpose of forming a view on the future.
2 - Prices Move in Trends
Technical analysts or chartists believe that profits can be made by following the trends. In other
words if the price has risen, they expect it to continue rising; if the price has fallen, they expect it to
continue falling. However, most technicians also acknowledge that there are periods when prices do
not trend.
3- History Repeats Itself
Technical analysts believe that investors en masse repeat their behavior and they assume that there is
useful information hidden within price histories; that it is a way of analyzing the past actions of
people in a particular market as reflected by their actual transactions.
Technical Analysis Tools
Every technical analyst needs charts and indicators to study market. Three common types of charts
are used by investors: Line Chart, Bar Chart and Candlestick Chart.
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Line Chart is formed by plotting one price point, usually the close, of a security over a period of
time. Connecting the dots, or price points, over a period of time, creates the line.
Bar Chart is drawn by high, low and closing price. Sometimes, bar charts are drawn by opening
price. In this case, bearish bars are drawn with another color.
Candlestick Chart A form of Japanese charting that has become popular in the West. A narrow line
(shadow) shows the day's price range. A wider body marks the area between the open and the close.
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Technical Indicators
Technical indicators are the basis of technical analysis. There are dozens of technical indicators,
how to choose good stock indicators? Technical indicators are used to know when to enter or exit a
trade. If you know how to enter and exit a trade, you can easily make profits. That is why choosing
good stock indicators are important.
Some of stock indicators are more common and useful than others. Also you need a few of them to
know when to enter or exit a trade not all off them.
Momentum and Rate of Change (ROC)
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Momentum is an oscillator designed to measure the rate of price change, not the actual price level.
This oscillator consists of the net difference between the current closing price and the oldest closing
price from predetermined period.
The formula is:
Momentum (M) = CCP – OCP
Where: CCP is Current Closing Price and OCP is Old Closing Price
Momentum is simply the difference, and the ROC is a ratio expressed in percentage. Momentum and
Rate of Change (ROC) are simple indicators showing the difference between today's price and the
close N days ago. Momentum in general term means strongly movement of prices in a given
direction.
Moving Average Convergence/Divergence (MACD)
The MACD is a trend following momentum indicator that shows the relationship between two
moving averages of prices. The MACD is the difference between a 26-day and a 12-day exponential
moving average (MACD is shown in red). A 9-day exponential moving average called the SIGNAL
(or trigger) is plotted on the same axis in order to indicate Buy / Sell opportunities (This line is shown
in black).
Why use the MACD chart
- Foresee Buy and Sell signals

- Use as an Oversold or Overbought Indicator
- Indication of trends
- Foresee price breakouts
Analysis Tools for MACD
The results are plot If the MACD is greater than zero, then the market is bullish (The 12-day average
is greater than the 26 day-average).
If the MACD is less than zero, then the market is bearish. (The 26-day average is greater than the 12
day-average).
When the MACD (red) crosses above it's Trigger line (black), a buy signal is indicated.
When the MACD (red) crosses below it's Trigger line (black), a sell signal is indicatedtted around a
Zero line (see chart )
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Detailed Analysis Methods and preferences
The MACD is a trend following indicator, this implicates that you will be indicated of a
buy or sell opportunity once a given trend has started. This means that you may miss the
exact buy or sell opportunity, but the MACD will certainly keep you on the good side of
trading. Please note that the MACD is not so reliable on shorter trends.
The MACD proves most effective in wide-swinging trading markets. There are three
popular ways to use the MACD;
1.Crossovers:
The MACD trading rule is to sell when it falls below its trigger line and a buy signal when
the MACD crosses over to the top of the Trigger line. Not forgetting the fact that when the
MACD is situated above the Zero line it is a buy signal and a sell signal when it is below
the Zero line.
2. Overbought / Oversold Conditions:

The MACD is also useful as an overbought / Oversold indicator. When the shorter moving
average pulls away dramatically from the longer moving average (i.e. the MACD rises), it
is likely that the security price is overextending and will soon return to more realistic levels
3.Divergences: End to current trends.

An indication that an end to the current trend may be near occurs when the MACD diverges
from the security. A bearish divergence occurs when the MACD is making new lows while
price fails to reach new lows. A bullish divergence occurs when the MACD is making new
highs while prices fail to reach new highs. Both of these divergences are more significant
when they occur at relatively overbought / oversold levels.
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The above chart demonstrates a 3 and 6 period moving average with a 9 for the Trigger.
These settings demonstrate short term buy and sell signals offering opportunities to get in
or out. Notice that where the MACD goes above or below the Zero line, it indicates the
trend of the security.
For longer term trading you must set the preferences to 13 and 26 for the MACD and 9 for
the Trigger.
Comments made by Analysts
Some technicians recommend buying using the 8-day / 17-day MACD with the 9-day
Trigger line and selling using the 12-day / 26-day MACD with the 9-day Trigger line.
- MACD is especially valuable when used in conjunction with a momentum indicator such
as the Stochastic Oscillator or the RSI. Since the MACD is a sensitive indicator of public
sentiment, it can be applied to Mutual Funds as well as Stock.
- When using the MACD as an Overbought / Oversold indicator, a trader should look
particularly at when the MACD pulls away from the Trigger in a dramatic
manner, it is likely that the security price is overextending and will soon
correct.
- Buy when the MACD crosses from below to above the slower moving trigger.
Sell when the MACD crosses from above to below the Trigger.
Exponential Moving Average (EMA)

Exponential Moving Average shows the average value of the underlying data, most often
the price of a security, for a given time period, attributing more weight to the latest changes
and less to the changes that lie further away.
Exponential Moving average is together with its simple counterpart (MA) considered to be
one of the most common Indicators in nearly any technical analysis software available in
the market today. It’s a trend following indicator and is calculated like so:
EMA = Price(t) * k + EMA(y) * (1 - k)

t = today, y = yesterday, N = number of days in EMA, k = 2/(N+1)
Simple Moving Average – SMA

A simple, or arithmetic, moving average that is calculated by adding the closing price of the
security for a number of time periods and then dividing this total by the number of time
periods. Short-term averages respond quickly to changes in the price of the underlying,
while long-term averages are slow to react.
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Explains Simple Moving Average – SMA
In other words, this is the average stock price over a certain period of
time. Keep in mind that equal weighting is given to each daily price. As
shown in the chart above, many traders watch for short-term averages
to cross above longer-term averages to signal the beginning of an
uptrend. As shown by the blue arrows, short-term averages (e.g. 15-
period SMA) act as levels of support when the price experiences a
pullback. Support levels become stronger and more significant as the
number of time periods used in the calculations increases
Relative Strength Index (RSI)
The values for this indicator vary between 0 and 100 which represent the internal force of a security.
The name is misleading because it studies the force of a security price in relation with itself and not at
all in relation with another indicator.
The formula for calculating RSI is:
RSI = 100 – [100/ (1+RS)]
Why use the RSI charts

- Study the tendency of the security
- Detect an inversion of tendency
- Detect overbought and oversold situations
Analysis tools for the Relative Strength Index

28
1. The two dotted lines that are drawn above the RSI indicate that the security is in a :
a. Overbought phase if it goes above the 70 line.
b. Oversold phase if it goes below the 30 line.
( 70 and 30 are the default values the most currently used for financial studies made with the RSI)
2. In general we interpret this indicator in the following ways:

a. If the RSI is above 50 the tendency is up-moving.
b. If the RSI is below 50 the tendency is down-moving.
3. This indicator also enables us to visualize financial motifs like the " head and shoulders" or
"double peak" effects which indicate the double Top, double Bottom movements. It is possible that
these effects are not visible with the closing prices of the share itself.
Detailed analysis and preferences

This indicator is very useful to detect tendency inversions, especially when there is a divergence
between the peaks of the security price itself and the RSI peaks. Let us take for example Holder bank
in June 1999 A first peak is reached the week of December 13th at 2162CHF, then a second peak is
reached on the 18th of January at 2273CHF. These two peaks imply that there is an upward
movement on the Holder bank chart. But, the RSI chart does not reflect this upward direction, on the
contrary, it actually reflects a downward movement simply by the fact that the second peak is under
the first for the same dates (above and then below the 70 dotted line).
This indicator is significant in the sense that its indicates us a month in advance that the tendency will
be downward open the longer term, as we clearly see in February.
The values that the analysts advise you to use are 9 days, 14 days or 25 days. The smaller the number
of days used for the study the higher the volatility of the indicator.
Stochastic Oscillator
29
The Stochastic Oscillator is a momentum indicator, it indicates whether the market is moving to new
highs or new lows or is just meandering in the middle. This indicator is based on George Lane 's
observations.
The Stochastic Oscillator is plotted in two lines Fast %k and Fast %D.
The formula is:

Fast %k = 100 * [( C – L (n) ) / ( H (n) – L (n) )]
Where:
C is the most recent closing price.
L (n) is the low of n previous trading day (or bar).
H (n) is the high price of the same n previous day (or bar).
Usually n is chosen 14.
A 3-period (day or bar) moving average is taken from Fast %k and called Fast %D. Fast %D is used
as a signal line in the same way that the moving average of the MACD is used as a signal line for the
MACD. Stochastic Oscillator is plotted in two lines but, usually these lines cross each other many
times. Now to smooth the chart, a 3-period moving average is taken from Fast %D and called Slow
%D (Also, Fast %D is called Slow %K), so the smoothed chart is plotted with Slow %K and Slow
%D.
Using of Stochastic Oscillator
1- Oscillators are used as an overbought/oversold indicator. A buy is signaled when the oscillator
moves below 20, and then crosses back above 20. A sell is signaled when the oscillator moves above
80, and then crosses below 80.
2- Also, when %K crosses above or below %D, Buy and sell signals can be given. But, may be
crossover occurs frequently in short periods and causes bad results. This using isn't very common.
Fibonacci Price Projections
Begin by adding one to itself... which is two. Then add two to one to get three -- the next number in
the series. You keep adding the current number to the previous number so it looks like this...
1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144...
Now, you have a number series which goes on forever. Next, there is an important ratio which is
calculated by dividing one number in the series by its previous For example 144 ÷ 89 = 1.618
This ratio is known as the Golden Mean and is the basis for most retracement percentages. Equally
important is the reciprocal of 1.618...
30
1 ÷ 1.618 = .618
Here are some other percentages you'll want to use...
.382 = .618 squared
.500 = 1 ÷ 2, the second and third numbers in the series
.786 = square root of .618
1.000 = 1.618 x .618
1.272 = square root of 1.618
2.618 = 1.618 squared
How are Fibonacci percentages applied?"
Begin by locating isolated highs and lows in a trend. The various swing points will be used to
measure the retracements. In the following illustration, trend AB has been established...
Counter-trend BC is a 50-percent retracement of trend AB. Trend CD continues in the same direction
as trend AB. Counter-trend DE is a 38-percent retracement of trend CD.
Shallow retracements are typical in a strong trend.

Combining retracements from multiple swing points is a dynamic forecasting method. In the next
example, retracement percentages are calculated from trends AD and CD...
31
The 38-percent retracement is calculated from trend AD. The 50-percent retracement is from trend
CD. When retracements from different swing points cluster together it is known as confluence.
Areas of confluence are likely turning points.

So far, you have seen how to calculate probable retracements using the high and low swing point of
an established trend. You can use Fibonacci percentages, in combination, to forecast the end of a
trend... with excellent results.
This next example shows a typical five-wave trend progression where the 1.618 and .618 percentage
extensions are used
First, trend AB is multiplied by 1.618 and then added to itself... forecasting a target price at point F.
Next, counter-trend BC retraces part of trend AB before continuing on. Finally, trend AD is
multiplied by .618 and added to itself. This projection also forecasts the trend termination at point F.
Incredibly powerful!
32
In a five-wave pattern, this ratio combination will bear-out turning points, again and again.
Why Technical Analysis is Superior to Fundamental Analysis
Fundamentalists must find the reasons of price movement. Sometimes this act is very complicated;
there are so many factors that make change on price such as political, psychotically events and so on.
To trade the fundamentalist must study and research tremendous amount of data that takes so much
time and effort.
Technical analysis is Flexible and Adaptable
You can apply technical rules to every market either stocks or futures or any other market. The
technician easily can follow many markets in the same time. This is a great strength because you can
catch big movements in each market.
Trading in different Time Dimensions
You can use technical rules for day trading, swing trading, long term trading and etc. rules are the
same you only change time of charts. Some people say technical analysis is only suitable for short
term trading, but it is not true. Using weekly and monthly charts that refer to several years has proven
the strength of technical analysis for long term trading.
Why Fundamental Analysis is needed?
One of defects in Technical Analysis is that it's a little slow.
It means that the increasing trend of a stock started before, but after some tardiness (maybe after some
days) signals of purchase appear in Technical Analysis method. Or for example on the ground of
news that company publishes, you could distinguish decreasing trend of stock is starting (with
Fundamental Analysis) but decreasing trend's signals appear with some tardiness in Technical
Analysis.
In Technical Analysis, with notice to the past of stock you could forecast its future.
Suppose that a new company who enter in the stock market, There is no past to help us to forecast its
future, so you should get helps from Fundamental Analysis.
Sometimes, you find a stock in the stock market that it's good to buy with Technical Factors but when
you analyze it with Fundamental Factors you find that the price of this stock is too far from its real
value and its price is increased like a bubble and maybe there are some manipulations in the stock.
Conclusion
33
Combination of these two methods could give you too much advantage and you could
increase the return in the stock market. In fact, it's better to know both methods and
then choose one of theme as a principal method and use other method as a help.
But you should notice that analyze of a stock with Fundamental method takes too
much time. Remember that you use this method to complete Technical Analysis, so
continue your researches in Fundamental Analysis until your researches in Technical
Analysis complete. In other words: Find a stock technically and then be sure that there
is no problem fundamentally.
Chapter 3
Company Equity Analysis
34
State Bank of India Equity
Reliance Industry Ltd Equity
Larsen & Toubro Ltd. Equity
Infosys Equity
Tata steel Equity
Satyam computers Equity
35
EQUITY ANALYSIS
State Bank of India

Industry : Finance - Banks - Public Secto BSE Code : 500112 NSE Code : SBINEQ
(Rs in Cr.)
Mar ' 09 Mar ' 08 Mar ' 07
Sales 63,788.43 48,950.31 39,491.02
Other income 12,690.79 8,694.93 5,769.25
Employee Expenses 9,747.31 7,785.87 7,932.58
Other Expenses 5,901.39 4,822.74 3,890.93
Total interest 42,915.29 31,929.08 23,436.82
Gross profit 17,915.23 13,107.55 9,999.94
Provisions Made 3,734.57 2,668.65 2,409.64
Net depreciation 0.00 0.00 0.00
Total taxation 5,059.42 3,709.78 3,048.99
Extra ordinary item 0.00 0.00 0.00
Net profit / loss 9,121.24 6,729.12 4,541.31
Prior year adjustment 0.00 0.00 0.00
Reserve written back 0.00 0.00 0.00
Equity capital 634.88 631.47 526.30
Equity Dividend Rate 290.00 215.00 140.00
Agg. Non-Promotor Shares (in Lacs) 2,576.73 2,119.60 3,143.39
Agg. Non-Promotor Holding(%) 40.59 40.27 59.73
GovernmentShare 59.41 59.73 0.00
CapitalAdequacyRatio 12.97 13.47 12.34
EPS (in Rs.) 143.67 106.56 86.29
Fundamental Analysis
EPS (26-march-2007)
86.29
Price to earning (P/E) ratio
MARKET RATE: 1095.50
EPS : 86.29
P/E = Stock Price / EPS
= 1013.65/ 86.29
= 11.74
36
EPS (26-Mar-2008)
106.56
EPS : 106.56
= 1713.70/ 106.56
= 16.08
EPS (26-Mar-2009)
143.67
MARKET RATE: 1,095.50
EPS : 143.67
= 1,095.50/ 143.67
= 7.063
Reported Return On Net Worth
2009: 15.74
2008: 13.72
2007: 14.50
Growth Rate of EQ Shares in the market price
Growth Rate 08-09 : 57%
Growth Rate (till June) : 32.6%
Dividend Paid in%

37
March 09: 290%
March08: 215%
March07: 140%
SBIN technical’s
State Bank of India (SBIN:EQ)

Market Cap: Rs. 42164.34 Crores
A component of BANK NIFTY / CNX 100 / CNX 500 / NIFTY
Paidup Value Face Value: 10 ISIN Code Listing Date
10 Market Lot: 1 INE062A01012 01-MAR-1995
Intraday support & resistance:

S2 S1 Pivot R1 R2
1572.95 1604.60 1650.80 1682.45 1728.65
Moving averages (simple):

5D 8D 13 D 20 D 39 D 50 D 200 D
1728 1737 1727 1713 1721 1629 1320
Other indicators:
- Volume (last/ 5 day average): 3562000 / 2564000
Trading range (historical)
5 day 10 day 20 day

Highest close 1809.65 1809.65 1809.65
Lowest close 1636.35 1636.35 1634.60
Support and Resistance:

Prev resistance 1840
Prev support 1599
Weekly high 1822
Weekly low 1721
Monthly high 1941
Monthly low 1599
38
Technical Analysis SBIN (6month) Chart
INVESTMENT BENEFITS
High Growth rate in the share price i.e. better return on investment
Dividends paid is also high which create confidence among the investor
RISKS
Very volatile in nature
Conclusion:
SBI is very good stock
Fundamental is very good
Volume in Trading is very good it show it is very active shares
Very Stable Company
Good for both long term and short term investor
I would say, it has very good future.
Technically, it show uptrend
Investors must think about this stock
Reliance Industries Limited: Reliance Industries Limited. The Group's principal activity is to
produce and distribute plastic and intermediates, polyester filament yarn, fiber intermediates, polymer
intermediates, crackers, chemicals, textiles, oil and gas
39
Reliance Industries
Industry : Diversified Mar
BSE' 09
Code : 500325
Mar ' 08 NSE Code
Mar :' RELIANCEEQ
07
The latest 3 yearly unaudited results
Sales 150,771.00 139,269.00 110,886.00
Other Income 2,033.00 895.00 193.00
Stock Adjustment 1,821.00 1,867.00 -970.00
Raw Material 97,150.00 90,304.00 77,889.00
Excise 4,480.00 5,826.00 5,523.00
Other Expenses 21,567.00 15,847.00 9,037.00
Operating Profit 23,395.00 23,306.00 18,210.00
Interest 1,692.00 1,077.00 1,114.00
Gross Profit 23,736.00 23,124.00 17,289.00
Depreciation 5,059.00 4,847.00 4,009.00
Taxation 3,028.00 3,552.00 2,372.00
Net Profit / Loss 15,279.00 19,458.00 10,908.00
Equity Capital 1,574.00 1,454.00 1,394.00
Agg.Of Non-Prom. Shares (in Lacs) 7,482.00 7,069.00 6,831.00
Agg.Of Non PromotoHolding (%) 47.54 48.63 49.02
EPS (in Rs.) 97.07 133.82 78.25
EPS (26-march-2007)
78.25
EPS : 78.25
40
= 1,941.95/ 78.25
= 24.82
EPS (26-Mar-2008)
133.82
EPS : 133.82
= 2,299.45/ 133.82
= 17.18
EPS (26-Mar-2009)
97.07
EPS : 97.07
= 1,565.50/ 97.07
= 16.12
Reported Return On Net Worth
2009: 24.66
2008: 19.49
2007: 20.08
Growth Rate 08-09 -13.18%
Growth Rate (till June) 63.16%

41
Dividend Paid in%
March 08: 130%
March07: 110%
Reliance Industries Ltd (RELIANCE:EQ)

A component of CNX 100 / CNX 500 / NIFTY
10 Market Lot: 1 INE002A01018 29-NOV-1995
S2 S1 Pivot R1 R2
1776.75 1816.10 1864.55 1903.90 1952.35
5D 8D 13 D 20 D 39 D 50 D 200 D
1969 1998 1997 2067 2129 2071 1579
Other indicators:
5 day 10 day 20 day

Highest close 2058.80 2087.00 2362.10
Lowest close 1855.45 1855.45 1855.45
42
Prev support 1900
Weekly high 2113
Weekly low 1980
Monthly high 2379
Monthly low 1900
INVESTMENT BENEFITS
KG band show the bright future of the company
RISKS: Very volatile in nature
Conclusion:
RELIANCE is very good stock
Very Stable company

43
Larsen & Toubro Ltd.

Larsen & Toubro Limited (L&T) is a technology, engineering, construction and manufacturing
company. It is one of the largest and most respected companies in India's private sector Diversified
engineering & construction conglomerate, Larsen & Toubro Limited has reported Gross Sales
revenues for the year at Rs.34045 crore registering a y-on-y growth of 35%. International Sales at Rs.
6460 crore
Larsen & Toubro Ltd.

Industry : Diversified BSE Code : 500510 NSE Code : LTEQ
The latest 3 yearly unaudited results.
44
(Rs in Cr.)
Mar ' 09 Mar ' 08 Mar ' 07
Sales 34,324.84 25,187.48 17,900.59

Other Income 739.78 587.87 462.29
Stock Adjustment -105.11 -746.17 -56.45
Raw Material 7,452.02 6,516.82 4,460.27
Power And Fuel 0.00 0.00 0.00
Excise 398.47 332.78 321.75
Admin And Selling Expenses 1,839.50 1,374.17 1,495.85
Research And Development Expenses 0.00 0.00 0.00
Expenses Capitalized 0.00 0.00 0.00
Other Expenses 18,885.10 13,359.81 8,674.42
Provisions Made 0.00 0.00 0.00
Interest 350.22 122.66 33.93
Gross Profit 4,246.40 3,279.84 2,174.90
Depreciation 305.99 211.60 170.01
Taxation 1,231.21 982.05 601.87
Net Profit / Loss 3,481.66 2,173.42 1,403.02
Extra Ordinary Item 772.46 87.23 0.00
Prior Year Adjustments 0.00 0.00 0.00
Equity Capital 117.14 58.47 56.65
Agg.Of Non-Prom. Shares (in Lacs) 5,684.96 2,802.45 2.76
Agg.Of Non Promoter Holding (%) 97.06 95.87 97.57
EPS (in Rs.) 59.44 74.34 49.53
EPS (26-march-2007)
49.53
EPS : 49.53
= 2160.20/ 49.53
= 43.66
EPS (26-Mar-2008)
74.34
45
EPS : 74.34
= 2357.65/ 74.34
= 31.72
EPS (26-Mar-2009)
59.44
EPS : 59.44
=1610.40/ 59.44
= 27.09
Reported Return On Net Worth(%)
2009: 22.81
2008: 24.48
2007: 22.05
Dividend Paid in%
March 09: 850%
March 08: 650%
March07: 1100%
46
Larsen & Toubro Limited (LT:EQ)
2 Market Lot: 1 INE018A01030 23-JUN-2004
S2 S1 Pivot R1 R2
1445.50 1472.80 1498.30 1525.60 1551.10
5D 8D 13 D 20 D 39 D 50 D 200 D
1543 1564 1542 1540 1438 1331 945
Other indicators:
5 day 10 day 20 day

Highest close 1607.55 1621.80 1629.00
Lowest close 1464.15 1464.15 1415.75

Prev support 1440
Weekly high 1660
Weekly low 1537
Monthly high 1699
Monthly low 1370
47
INVESTMENT BENEFITS
Good Future Project
1 L&T bags RS. 6510 millions orders for projects in Hydrocarbon Sector
2 L&T bags RS. 6510 millions Electrical Project Orders
RISKS
Conclusion:
L&T is very good stock
Growth of 23% over the previous year
48
Very Stable Company
Infosys Technologies Ltd.

Infosys' offerings span business and technology consulting, application services, systems
integration, product engineering, custom software development, maintenance, re-engineering,
independent testing and validation services, IT infrastructure services and business process
outsourcing
Infosys Technologies Ltd.
Industry : Computers - Software BSE Code : 500209 NSE Code : INFOSYSTCHEQ
You can view the latest 3 yearly unaudited results.
(Rs in Cr.)
Mar ' 09 Mar ' 08 Mar ' 07
Sales 20,264.00 15,648.00 13,149.00

Other Income 502.00 683.00 375.00
Stock Adjustment 0.00 0.00 0.00
Raw Material 0.00 0.00 0.00
Power And Fuel 0.00 0.00 0.00
Excise 0.00 0.00 0.00
Admin And Selling Expenses 2,213.00 1,809.00 1,646.00
Research And Devlopment Expenses 0.00 0.00 0.00
49
Expenses Capitalised 0.00 0.00 0.00
Other Expeses 1,176.00 1,068.00 964.00
Interest 0.00 0.00 0.00
Gross Profit 7,408.00 5,646.00 4,598.00
Depreciation 694.00 546.00 469.00
Taxation 895.00 630.00 352.00
Net Profit / Loss 5,819.00 4,470.00 3,783.00
Extra Ordinary Item 0.00 0.00 6.00
Equity Capital 286.00 286.00 286.00
Agg.Of Non Promoter Holding(%) 64.37 64.31 64.35
EPS (in Rs.) 101.73 78.15 66.14
EPS (26-march-2007)
66.14
EPS : 66.14
= 1922.15/ 66.14
= 29.06
EPS (26-Mar-2008)
78.15
EPS : 78.15
= 1785.10/ 78.15
50
= 22.84
EPS (26-Mar-2009)
101.73
EPS : 101.73
=1806.00/ 101.73
= 17.75
Reported Return On Net Worth (%)
2009: 32.67
2008: 33.13
2007: 33.89
Growth Rate 08-09 2.28%
Dividend Paid in (%)
March 10 Purposed: 270%
March 09: 470%
March 08: 665%
March07: 230%
Infosys Technologies Ltd. (INFOSYSTCH:EQ)

A component of CNX 100 / CNX 500 / CNX IT / NIFTY
5 Market Lot: 1 INE009A01021 08-FEB-1995
51
S2 S1 Pivot R1 R2
1681.30 1709.60 1753.30 1781.60 1825.30
5D 8D 13 D 20 D 39 D 50 D 200 D
1779 1785 1776 1762 1693 1659 1388
Other indicators:
5 day 10 day 20 day

Highest close 1805.15 1827.10 1827.10
Lowest close 1737.90 1737.90 1711.45

Prev support 1701
Weekly high 1860
Weekly low 1748
Monthly high 1860
Monthly low 1601
52
INVESTMENT BENEFITS
Good Future Project
1 Telstra Selects Infosys as a Key Partner
2 27 clients were added during the quarter by Infosys and its subsidiaries
RISKS
Conclusion:
Infosys is very good stock
Revenues grew by 12.7%

53
Very Stable Company
Tata Steel has a balanced global presence in over 50 developed European and fast growing Asian
markets, with manufacturing units in 26 countries
Tata Steel Thailand is the largest producer of long steel products in Thailand, with a manufacturing
capacity of 1.7 MTPA. Tata Steel has proposed a 0.5 MTPA mini blast furnace project in Thailand.
NatSteel Holdings produces about 2 MTPA of steel products across its regional operations in seven
countries
Tata Steel Ltd.

Industry : Steel BSE Code : 500470 NSE Code : TATASTEELEQ
You can view the latest 3 yearly unaudited results. (Rs in Crore)
54
Mar ' 09 Mar ' 08 Mar ' 07
Sales 24,315.77 19,693.28 19,762.57

Other Income 308.27 335.00 433.67
Stock Adjustment -289.27 -38.73 -82.47
Raw Material 5,709.91 3,429.52 3,121.46
Power And Fuel 1,091.37 0.00 0.00
Excise 0.00 0.00 2,210.55
Admin And Selling Expenses 0.00 0.00 0.00
Research And Devlopment Expenses 0.00 0.00 0.00
Expenses Capitalised 0.00 0.00 0.00
Other Expeses 6,364.52 6,484.18 6,082.93
Interest 1,152.69 878.70 173.90
Gross Profit 8,289.01 7,679.84 7,233.04
Depreciation 973.40 834.61 819.29
Taxation 2,113.87 2,379.33 2,039.50
Net Profit / Loss 5,201.74 4,687.03 4,222.15
Extra Ordinary Item 0.00 221.13 -152.10
Equity Capital 730.79 730.78 580.67
Agg.Of Non PromotoHolding(%) 66.05 66.06 69.48
EPS (in Rs.) 71.18 64.14 72.71
EPS (26-march-2007)
72.71
MARKET RATE: 604.15
EPS : 72.71
= 604.15/ 72.71
= 8.30
EPS (26-Mar-2008)
64.14
55
MARKET RATE: 756.55
EPS : 64.14
= 756.55/ 64.14
= 11.79
EPS (26-Mar-2009) 71.18
MARKET RATE: 388.55
EPS : 71.18
=388.55/ 71.18
= 5.46
Reported Return On Net Worth(%)
2009: 21.52
2008: 30.71
2007: 36.90
Dividend Paid in (%)
March 08: 160%
March07: 155%
Tata Steel Limited (TATASTEEL:EQ)

56
10 Market Lot: 1 INE081A01012 18-NOV-1998

S2 S1 Pivot R1 R2
344.65 354.25 362.15 371.75 379.65

5D 8D 13 D 20 D 39 D 50 D 200 D
392 396 397 406 406 377 274
Other indicators:
5 day 10 day 20 day

Highest close 437.95 437.95 457.75
Lowest close 362.50 362.50 362.50
Prev resistance 443

Prev support 380
Weekly high 443
Weekly low 381
Monthly high 499
Monthly low 379
57
INSTMENT BENEFITS
Good Future Project
India:
The Company has embarked upon setting up three green field steel plants in eastern India:
• 12 MTPA* plant in Jharkhand

• 6 MTPA plant in Orissa
• 5 MTPA plant in Chhattisgarh
• Jamshedpur Steel Works will become a 10 MTPA unit by 2010.
*MTPA = million tons per annum
Overseas:
• Vietnam
RISKS
Conclusion:
58
TATA STEEL is very good stock
Revenues grew by 12.0%
Very Stable Company
Mahindra Satyam Integrated Engineering Solutions (IES) provides premium engineering and product
development solutions to support a given engineered product through its lifecycle. The ideas are
conceived, conceptualized and validated for technological feasibility and commercialization. With a
keen eye on aesthetics, ergonomics, safety and reliability, Mahindra Satyam’s engineers and
designers shape thoughts to reality. Our ‘system engineering’ approach addresses inter-disciplinary
dependencies during the product design and development and derives an integrated solution from
Mechanical, Electrical & Electronics, Electro-mechanical and IT disciplines
Mahindra Satyam (the new brand identity of Satyam Computer Services Ltd. - NYSE: SAY), a
leading global business and information technology services company, delivers consulting, systems
integration, and outsourcing solutions to clients in numerous industries across the globe. Mahindra
Satyam leverages deep industry and functional expertise, leading technology practices, and an
advanced, global delivery model to help clients transform their highest-value business processes and
improve their business performance. The company's professionals excel in engineering and product
development, supply chain management, client relationship management, business process quality,
business intelligence, enterprise integration, and infrastructure management, among other key
capabilities.
Mahindra Satyam development and delivery centers in the US, Canada, Brazil, the UK, Hungary,
Egypt, UAE, India, China, Malaysia, Singapore, and Australia serve numerous clients, including
many Fortune 500 organizations.
59
In a regulatory filing to the BSE, Satyam said that the company had a net profit of Rs 4 cr in Jan,
2009. The total income in Feb stood at Rs 637 crore while in Jan it was at Rs 647 crore.
The firm which has been acquired by Tech Mahindra in April, posted a net profit of Rs 181 cr for the
Oct-Dec quarter. The total income during the Dec quarter last year stood at Rs 2,206 crore.
Mumbai, Jun 9: Satyam Computers, in India reported a standalone net profit of Rs 52 crore for the
month ended Feb 2009
.
Satyam Computer Services Ltd (SATYAMCOMP:EQ)
2 Market Lot: 1 INE275A01028 01-DEC-1999

S2 S1 Pivot R1 R2
61.75 66.15 71.00 75.40 80.25

5D 8D 13 D 20 D 39 D 50 D 200 D
74 73 74 76 66 62 137
Other indicators:

5 day 10 day 20 day
Highest close 77.60 77.60 80.85
Lowest close 70.65 70.65 70.65

Prev resistance 80
Prev support 70
Weekly high 80
Weekly low 70
Monthly high 89
Monthly low 53
60
Chapter 4
Effect of Economic Growth on Share

Market
Inflation rate
GDP
Labor market
61
Economic Growth Indicator
Table Economic Growth and Share

Market (2000-2009)
62
Effect of Economic growth on Share Market
Three most significant to stock market investors are inflation, gross domestic product (GDP), and
labor market data. I try at all times to keep in mind where these three are in relation to the current
stage of the economic cycle.
INFLATION
Inflation is a significant indicator for securities markets because it determines how much of the real
value of an investment is being lost, and the rate of return you need to compensate for that erosion.
For example, if inflation is at 3% this year, and your investment also increases by 3%, in real terms
you have just managed to stay even. And to take on market risk, most individuals require a “risk
premium” above and beyond the inflation rate. So investors who buy stocks do so expecting they will
get a return equal to (or better than) that risk premium adjusted by the inflation rate. So the higher the
inflation rate, the higher nominal return is needed for a stock price to remain the same.
But the effect inflation has on the stock market is even more complicated than that. The main impact
of inflation on stock prices actually comes from the effect it has on a company’s earnings. Low
inflation keeps a company’s costs down, and increases profits. So all other things being equal, (a
favorite phrase of all economists), low inflation is better for the market than high inflation.
There are of course some problems with this measure as well. For one thing, the products rarely
remain exactly the same, and it is difficult to strip out how much of an increase is due to inflation,
and how much is due to other factors such as improvements in quality. Also, the composition of what
people buy changes over time. In fact, many of the goods now included were not even invented 20 or
30 years ago. Still, it is the best proxy currently available, and at least in the short- to medium-term, is
the number that investors focus on when making their decisions
GROSS DOMESTIC PRODUCT

While GDP is an important component in inflation, it is also important as an economic indicator in its
own right. When compared to the previous year’s reading, it tells you how fast the economy is
growing (or contracting). GDP is the rupees value of all goods and services produced by a given
country during a certain period. It is measured by either adding all of the income earned in an
economy, or by all the spending in an economy. Both measures should be roughly equal.
Gross domestic income includes wages and salaries, corporate profits, interest collected by lenders,
and taxes collected by governments. GDP domestic expenditures includes consumer spending,
housing investment, government spending, business spending (investment in factories, equipment,
and inventory), as well as foreign spending on our exports minus our spending on their imports. With
so many individual components affecting GDP (and through the output gap, inflation) you can see
how easy it is for the number of economic reports to mushroom.
GDP affects the stock market through its effect on inflation, as well as through its use a key indicator
of economic activity and future economic prospects by investors. Any significant change in the GDP,
either up or down, can have a major effect on investing sentiment. If investors believe the economy is
improving (and corporate earnings along with it) they are more likely to pay more for a given stock.
If there is a decline in GDP (or investors expect a decline) they would be willing to pay less for a
given stock, leading to a decline in the stock market.
Those who have made it through this far are probably familiar with an alternative view that has been
63
mentioned frequently in the news lately, that the stock market itself exerts a reverse effect on
economic activity, the so-called “wealth effect”. This theory says that a fall in the stock market makes
individual’s personal wealth (or perceived wealth) fall. They consequently stop spending as much,
and since consumer spending represents around two-thirds of GDP, a small change in consumption
exerts a significant effect on GDP. This means that as the stock market falls, GDP also falls, which
just further intensifies the downward pressure on the stock market.
THE LABOR MARKET
The final major factor influencing the economy is the labor market. The key indicators most investors
focus on are total employment and the unemployment rate
CONCLUSION
The economic evidence right now seems to indicate that the current output gap is quite
large, with plenty of room for expansion without inflation. Therefore reports showing
an increase in GDP, or unemployment decreasing, are good news and the market
should go up. Any report that shows inflation is higher than expected is bad, because it
may indicate that we are overestimating the size of the output gap, and should cause
the stock market to drop. But in a later stage of the economic cycle, when the output
gap is smaller or non-existent, those same news items would have the opposite effect
on the market
Economic Growth Indicators
64
Gross Domestic Product
Gross domestic product (GDP)

It measures the total output of goods and services for final use occurring within the domestic territory
of a given country, regardless of the allocation to domestic and foreign claims. Gross domestic
product at purchaser values (market prices) is the sum of gross value added by all resident and
nonresident producers in the economy plus any taxes and minus any subsidies not included in the
value of the products. The gross domestic product estimates at purchaser values (market prices) are in
constant 1995 U.S. dollars and are the sum of GDP at purchaser values (value added in the
agriculture, industry, and services sectors) and indirect taxes, less subsidies. It is calculated without
making deductions for depreciation of fabricated assets or for depletion and degradation of natural
resources
Gross Domestic Product (GDP), PPP

It is gross domestic product converted to international dollars using Purchasing Power Parity (PPP)
rates. An international dollar has the same purchasing power in a given country as a United States
Dollar in the United States. In other words, it buys an equivalent amount of goods or services in that
country. Data has not been adjusted to a constant year
Gross Domestic Product (GDP) per capita, PPP

It is gross domestic product converted to international dollars using Purchasing Power Parity (PPP)
rates, and divided by the population of the country that year. An international dollar has the same
purchasing power in a given country as a United States Dollar in the United States. In other words, it
buys an equivalent amount of goods or services in that country
Average annual growth in Gross domestic product (GDP)

It measures the annual growth in GDP of a particular country from one year to the next. GDP per
capita, annual growth measures the annual growth in GDP per person of a particular country from
one year to the next
Gross Domestic Product (GDP), Percent from Agriculture

It measures the percent of total output of goods and services which are a result of value added by the
agriculture sector. The industrial origin of value added is determined by the International Standard
Industrial Classification (ISIC) revision 3. Agriculture corresponds to ISIC divisions 1-5 and includes
forestry and fishing. Gross Domestic Product (GDP),
Percent from Industry

industrial sector. Industry corresponds to ISIC divisions 10-45 and includes manufacturing (ISIC
divisions 15-37). It comprises value added in mining, manufacturing (also reported as a separate
subgroup), construction, electricity water, and gas.
Gross Domestic Product (GDP), Percent from Services

service sector. Services correspond to ISIC divisions 50-99 and they include value added in wholesale
and retail trade (including hotels and restaurants), transport, and government, financial, professional,
65
and personal services such as education, health care, and real estate services. Also included are
imputed bank service charges, import duties, and any statistical discrepancies noted by national
compilers as well as discrepancies arising from rescaling
Foreign direct investment

It is net inflows of investment to acquire a lasting management interest (10 percent or more of voting
stock) in an enterprise operating in an economy other than that of the investor. It is the sum of equity
capital, reinvestment of earnings, other long-term capital, and short term capital, as shown in the
balance of payments. Data are in current U.S. dollars
Gross national savings

It is equal to gross domestic savings (gross domestic product minus final consumption) plus net
income and net current transfers from abroad. The United Nations system of national accounts
defines gross national income as "the aggregate value of the balances of gross primary incomes for all
sectors; (gross national income is identical to gross national product (GNP) as hitherto understood in
national accounts generally.)"
Inflation Rate The inflation rate
It is the percentage by which prices of goods and services rise beyond their average levels. It is the
rate by which the purchasing power of the people in a particular geography has declined in a specified
period. The rate of inflation may be calculated weekly, monthly or annually. However, it is always
express
The equation to calculate the inflation rate is:
Inflation Rate = (Po- P-1)* 100 / P-1,
where
Po = the present average price
P-1 = the price that existed last year.
The inflation rate is always stated as a percentage. Another way of calculating the inflation rate is to
apply the log rule. The inflation rate is important, since it is subtracted from various economic rates in
order to eliminate the impact of inflation. The real increase in wages is also counted by taking into
account the prevailing inflation rate.
Economic Growth
Year GDP Annual Average Inflation Share market
2008-09 6.5 % 2.31% 4349.10

66
2007-08 8.7% 5.44% 4735.14
2006-07 9.6% 6.33% 3572.44
2005-06 9.4% 4.23% 2513.40
2004-05 7.5% 4.00% 1808.75
2003-04 8.5% 3.73% 1428.13
2002-03 3.8% 4.10% 1036.10
2001-02 5.8% 4.28% 1077.13
2000-01 4.4% 3.74% 1336.49
Year Change in GDP Change in IR Change in SM

2001-02 1.4 .54 -19.4%
2002-03 -2 -.18 -3.9%
2003-04 4.7 -.37 37.83%
2004-05 -1 .27 26.66%
2005-06 1.9 .23 26.65%
2006-07 .2 2.1 42.13%
2007-08 -0.9 -0.89 32%
2008-09 -2.2 -3.13 -8.15
CONCLUSION
When GDP rate above the 7% the market growth rate is also good as shown in table
Market show high growth rate when GDP is all time high i.e. 9.6% and market growth is 42.13%
When GDP increase and inflation rate is down market is going up at a rate of 37.8.3% during current
year both GDP and Inflation rate are decrease result market are also down by 8.15% it shows GDP
effect is more to the market than inflation rate
Chapter 5
67
Marketing Strategies of Religare
Comparisons between the Religare and

other Trading company
Suggestions
Bibliography
Appendices
68
RELIGARE THE NAME IN WHICH YOU CAN TRUST
RELIGARE follow Rapid penetration strategy

• Minimum broker charges as compare to other company
• More advertisement on business based websites
• Pan India footprint
Near to your home/office Religare is present in all over India
• 1800 locations across more than 460 towns & cities.
• Powerful research and analytics supported by a pool of highly skilled

research analysts
• Ethical business practices
• Offline/Online delivery models
• Single window for all investment needs through your unique CRN
• Better back office service
69
• Well qualified dealer and Relation manager
• Better online services
• More securities than other company
• Provide both online and offline service
• Provides technical analysis by mail/sms
• Client oriented approach
• Provide all market in a single platform
• One of the “best-in-class” dealing rooms

Comparisons between the Religare and other Trading company
Company Broker R.M. Online + Technical Opening Margin
Name charges Service offline assistance Charges condition
service
ICICI 0.15/0.75 Only Online only Rs 750+ 7/3-4times

Intra/Deliv customer Free Rs 5000 Intra/Deli
Direct care In account
v
Share Khan 0.05/0.30 Yes 550 7/3-4times

Intra/Deli Both Free Intra/Deli
v
India Bulls 0.10/0.50 Yes Both Free 200 7/4times

Intra/Deli Intra/Deli
*if more than 1 v
Lakh than.02/.20
Kotak 0.05/0.45 Yes Both Free Rs 750+ 7/3times

Intra/Deli Rs 2500 Intra/Deli
In account
v
70
Reliance 0.02/0.75 Yes Both Paid 500 7/3-4times
Money Intra/Deli Intra/Deli
v
SMC 0.15/0.50 Yes Both Free 500 7/3-4times
Intra/Deli Intra/Deli
v
India 0.05/0.30 Yes Both Free 450 7/3-4times
infoline Intra/Deli Intra/Deli
v
Religare 0.02/0.20 Yes Both Free Nill 20/6-8times
Intra/Deli Intra/Deliv
*if more than

1 Lakh
than.01/.10
Comparisons between the Religare and other Trading company

As the table shows Religare provide better services on minimum broker charges with higher margin
condition it helps to get the maximum market share which increased its profit and help to the
company to increase it growth rate .The Company has posted a net profit of Rs 31.646 million in Q1
2009.
Some Suggestions to further enhancing the services

• All other trading company provide the online demo on their sites but it is not available on
Religare site
• Religare main focus only in trading by RM. it have to focus on both because the internet
population in India grew at 33 per cent and people prefers to do online trading
• Provide Pdf form on Religare site.
• IPO news flash on the site
• Selected news Flash on the sites which effect on share as suggested by your research group
Bibliography
- Apax Partners, Unlocking global Value Report, 2006
- Citigroup, Y. Huang and C. Tan, Asia-Pacific Economic Strategy, June 2006
- Economist Intelligence Unit, Foresight 2020: Economic, industry and corporate
trends, March 2006
71
- Ernst and Young, Transition: Global Venture Capital Insight Report 2006
- Ernst & Young, Renewal and new frontiers, 2005
- Fenwick & West LLP, F.M. Greguras and S. R. Gopalan, Update to Structuring
Venture Capital and other investments in India
- PriceWaterhouseCoopers, J. Haksworth, The World in 2050, March 2006
- PriceWaterhouseCoopers, Global Private Equity Report 2005
- PriceWaterhouseCoopers, M&A Bulletin India 2005
- Wharton Private Equity Review, Finding Value in a crowded market, 2006
- http://www.worldbank.org
Fiancé Management By I.M. panday

- Bloomberg.com, Blackstone, Still Seeking a Deal, Plans $500 Million India Fund,
June 12 2006
Equity-Investment and Economic Growth
in India: 1970-1991*
V.N. ATTARI**
NEERA VERMA**
www.nseindia.com
www.religare.com
www.buzzingstock.com
www.moneycontrol.com
www.indiainfoline.com
www.smc.com
www.ibf.org
www.finmin.nic.in
www.indiabudget.nic.in
Appendices
BSE: Bombay Stock Exchange
EPS: Earning Per Share
72
EQ: Equity Share
IPO: Initial Public offer
L&T: Larsen & Toubro Ltd
NSE: National Stock Exchange
RIL: Reliance Industries Ltd
SBI: State Bank of India
73

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EQUITY INVESTMENT & ECNOMIC

GROWTH IN INDIA (2000-2008) AND

For the award of the degree of

Master of Business Administration

Advisor: Mary Jacintha

Supervisor: Amandeep Shaney

Centre for Development of Advanced Computing,

Name: Chandan Parsad

Signature of the Student

Enrollment No: 0061189908

This is to certify that the project report entitled

Signature of the Supervisor

Name of the Guide: Amandeep Shaney

Organization Name: RELIGARE SECURITIES

Address : G-16, Marina Arcade

Signature of the Internal Guide

FINAL APPRAISAL PERFORMA

Roll No: 0061189908

Project : EQUITY INVESTMENT & ECNOMIC GROWTH IN INDIA (2000-2008) AND

Name of Organization: RELIGARE SECURITIES

Address: G-16, Marina Arcade Connaught Place Delhi- 110001

Supervisor: Amandeep Shaney

Phone No: 9871952726

Period of evaluation: From _________To _________

3. Improvement in Communication Skills

8. Initiative & Dedication

9 Discipline & Sincerity

10 Problem Solving Capability

Signature of Project Supervisor

Equity investment in Nifty50 Index during January09 to june09

Reliance Industry Ltd

Larsen & Tourbo Ltd

Infosys Technology Ltd

Mahindra Satyam Comp

Marketing STRATEGIES of Religare

Effect of Economy Growth on share Market

• Larsen & Toubro Ltd.

5. Simple Moving Average (SMA) 28

6. Relative Strength Index 29

7. Fibonacci percentages 31,32

8. Technical Analysis SBIN (6month) Chart 39

9. Technical Analysis Reliance Industry Ltd (6month) Chart 43

10. Technical Analysis Larsen & Toubro Ltd (6month) Chart 48

11. Technical Analysis Infosys (6month) Chart 53

12. Technical Analysis Tata steel (6month) Chart 58

13. Technical Analysis Satyam computers (6month) Chart 61

14. Advantage of Religare Online account 69

Background of Indian economy

Indian Equity Introduction

• A highly process driven, diligent approach

The Religare Edge

Portfolio Management Services

Benefits of Currency Futures

• SMEs / Individuals involved in Imports/Exports

Background of Indian economy

3. Some of the key governmental measures have been:

1 (i) Simplifying the process of setting up businesses. In particular, the business

3. In 2008, funds broadened their interest to a range of sectors including manufacturing,

Equity Analysis Introduction.

Fundamental Analysis Introduction

Technical Analysis Introduction

There are two major types of analysis:

Fundamental analysis of Stock’s

Earnings per share (EPS) ratio & what it means!

Period of evaluation: From _To _