TITLE

A PROJECT SYNOPSIS ON

A STUDY ON FINANCIAL PERFORMANCE ANALYSIS

NAME: V.AKHIL

H.TNO: 18WJ1E0076

COURSE: M.B.A

GURU NANAK INSTITUTIONS TECHNICAL CVAMPUS

 INTRODUCTION

Portfolio management
Meaning of portfolio:

A combination of securities with different risk & return characteristics will constitute the portfolio
of the investor. Thus, a portfolio is the combination of various assets and/ or instruments of
investments. The combination may have different features of risk & return, separate from those of
the components. The portfolio is also built up out of the wealth or income of the investor over a
period of time, with a view to suit his risk and return preference to that of the portfolio that he
holds. The portfolio analysis of the risk and return characteristics of individual securities in the
portfolio and changes that may take place in combination with the securities due to interaction
among themselves and impact of each one of them on others

An investor considering investments in securities is faced with the problem of choosing

from a large number of securities. His choice depends upon the risk and return characteristics of
individual securities. He would attempt to choose the most desirable securities and like to allocate
his funds over this group of securities. Again he is faced with the problem of deciding which
securities to hold and how much to invest in each. The investor faces an infinite number of possible
portfolios or groups of securities. The risk and return characteristics of portfolio differ from those
of individual securities combining to form portfolio. the investor tries to choose the optimal
portfolio taken into consideration the risk return characteristics of all possible portfolios.

Portfolio management:

An investor considering investment in securities is aced with the problem of choosing from among
a large number of securities and how to allocate his funds over this group of securities. Again he
is faced with problem of deciding which securities to hold and how much to invest in each. The
risk and return characteristics of portfolios. The investor tries to choose the optimal portfolio taking
into consideration the risk return characteristics of all possible portfolios. As the risk return
characteristics of individual securities as well as portfolios also change. This calls for periodic
review and revision of investment portfolios of investors. An investor invests his funds in a
portfolio expecting to get good returns consistent with the risk that he has to bear the return realized
from the portfolio has to be evaluated. It is evident that rational investment activity involves
creation of an investment portfolio. Portfolio management comprises all the processes involved in
the creation and maintenance of an investment portfolio. It deals specifically with the security
analysis, portfolio analysis, portfolio selection, portfolio revision & portfolio evaluation. Portfolio
management makes use of analytical techniques of analysis and conceptual theories regarding
rational allocation of funds.
NEED FOR STUDY:

 Portfolio management has emerged as a separate academic discipline in India. Portfolio

theory that deals with the rational investment decision-making process has now become an
integral part of financial literature.

 Investing in securities such as shares, debentures & bonds is profitable well as exciting. It
is indeed rewarding but involves a great deal of risk & need artistic skill. Investing in
financial securities is now considered to be one of the most risky avenues of investment.

 Such group of securities is called as PORTFOLIO. Creation of portfolio helps to reduce

risk without sacrificing returns. Portfolio management deals with the analysis of individual
securities as well as with the theory & practice of optimally combining securities into
portfolios.

 The modern theory is of the view that by diversification, risk can be reduced. The investor
can make diversification either by having a large number of shares of companies in different
regions, in different industries or those producing different types of product lines. Modern
theory believes in the perspective of combinations of securities under constraints of risk and
return.
SCOPE OF STUDY:
 This study covers the Markowitz model. The study covers the calculation of correlations
between the different securities in order to find out at what percentage funds should be
invested among the companies in the portfolio.

 Also the study includes the calculation of individual Standard Deviation of securities and
ends at the calculation of weights of individual securities involved in the portfolio.
OBJECTIVES

 To study the investment pattern and its related risks & returns In KSBL.

 To find out optimal portfolio of KSBL, which gave optimal return at a minimize risk to the
investor in KSBL.

 To see whether the portfolio risk is less than individual risk on whose basis the portfolios
are constituted

 To see whether the selected portfolios is yielding a satisfactory and constant return to the
investor

 To understand, analyze and select the best portfolio

STEPS IN PORTFOLIO MANAGEMENT:

 Specification and qualification of investor objectives, constraints, and preferences in the

form of an investment policy statement.

 Determination and qualification of capital market expectations for the economy, market
sectors, industries and individual securities.

 Allocation of assets and determination of appropriate portfolio strategies for each asset class
and selection of individual securities.

 Performance measurement and evaluation to ensure attainment of investor objectives.

 Monitoring portfolio factors and responding to changes in investor objectives, constrains

and / or capital market expectations.

 Rebalancing the portfolio when necessary by repeating the asset allocation, portfolio
strategy and security selection.
METHODOLOGY AND FRAMEWORK

DATA COLLECTION METHODS

The data collection methods include both the primary and secondary collection methods.

Primary collection methods:

This method includes the data collection from the personal discussion with the authorized clerks
and members of the KSBL financial services.

Secondary collection methods:

The secondary collection methods includes the lectures of the superintend of the department of
market operations and so on., also the data collected from the news, magazines and different books
issues of this study Superintend
LIMITATIONS OF THE STUDY

1. Construction of Portfolio is restricted to two companies based on Markowitz model.

2. Very few and randomly selected scripts / companies are analyzed from BSE listings.
3. Data collection was strictly confined to secondary source. No primary data is associated
with the project.
4. Detailed study of the topic was not possible due to limited size of the project.
5. There was a constraint with regard to time allocation for the research study i.e. for a
period of 45 days.
CONCLUSION:

The study on portfolio analysis at selected industries was undertaken with an objective of getting an
insight into the concept of investment, the risks and the returns involved. The study aims to determine the
risk involved in the investment and the factors affecting the risk. The study is confined to the different
sectors.

The study is done using the NIFTY values and other related data from the stock exchange. The entire
study is based on the secondary data only. The analytical tools used for the study are risk and return
analysis. The study is done at Hyderabad for a period of 45 days. The study had few limitations which
were taken care of.

Finally, it is suggested to the companies to maintain a low beta value around 1 in order to attract more
number of the investors. It should also see that the stock prices do not fluctuate a lot which may cause
suspicion in the investors and reduce their interest to invest in the company. The companies should also
go for frequent portfolio checking to maintain the higher returns.