ASTUDYon

EQUI
TYANALYSI
S
At
I
NDI
AINFOLI
NELI
MITED

(
Repor
tsubmi
tt
edt
oJNTUi
npar
ti
alf
ulf
il
lmentoft
her
equi
rementf
or
t
heawar
dofMast
erofBusi
nessAdmi
nist
rat
ion)

Submi
tt
edby

SHAMEEM BEGUM
Rol
lNo:
08N31E0048

Undert
hegui
danceof
Mr
.KHar
iKr
ishna
Assoc.Pr
ofessorFi
nance

MALLAREDDYCOLLEGEOFENGI
NEERI
NG&TECHNOLOGY
(
Aff
il
iat
edt
oJNTU,
Hyder
abad)
Secunder
abad-14
2008-2010
 DECLARATI
ON

Idecl
aret
hatt
hispr
ojectr
epor
tent
it
led“
EQUI
TY ANALYSI
S”i
sor
igi
naland

bonaf
idewor
kofmyowni
nthepar
ti
alf
ulf
il
lmentoft
her
equi
rement
sfort
he

awar
doft
heDegr
eeofMASTEROFBUSI
NESSADMI
NISTRATI
ONandsubmi
tt
ed

t
otheDepar
tmentofManagement
,MALLAREDDYCOLLEGEOFENGI
NEERI
NG

ANDTECHNOLOGY,
Secunder
abad.

Thedat
athathasbeencol
l
ect
edbymei
str
ulyaut
hent
icandcont
ainst
rueand

compl
etei
nfor
mat
ion.

SHAMEEM BEGUM
 SUMMARY

Theaut
omobi
l
eindust
ry,
oneoft
hecor
esect
ors,
hasunder
gonemet
amor
phosi
s

wi
tht
headv
entofnew busi
nessandmanuf
act
uri
ngpr
act
icesi
nthel
i
ghtof

l
i
ber
ali
zat
ionandgl
obal
i
zat
ion.Thesect
orseemst
obeopt
imi
sti
cofpost
ing

st
rongsal
esi
nthecoupl
eofy
ear
sint
hev
iewofar
easonabl
esur
gei
ndemand.

TheI
ndi
anaut
omobi
l
emar
keti
sgear
ingt
owar
dsi
nter
nat
ionalst
andar
dst
omeet

t
heneedsoft
hegl
obal
aut
omobi
l
egi
ant
sandbecomeagl
obal
hub.

Adet
ail
edanal
ysi
sofAut
omobi
l
eindust
ryhasbeencov
eredi
nrespectofpast

gr
owt
handper
for
mance.Undert
hispr
ojectt
obet
terunder
standt
heI
ndust
ryI

hav
eusedFundament
alt
ool
stomakei
tmor
eaut
hent
icandmeani
ngf
ul.

An economy
-i
ndust
ry-
company (
E.I
.C) appr
oach has been f
oll
owed under

Fundament
alAnal
ysi
swhi
chcov
ersef
fectofRecessi
on,t
hei
mpactofi
nfl
ati
on,

FDI
’
s,Expor
t,andGDPet
c.onAut
omobi
l
eIndust
ry.TheI
ndust
ryAnal
ysi
shas

beendonewi
tht
hehel
pofSWOTanal
ysi
sandi
ndust
ryl
i
fecy
cle.ForCompany

Anal
ysi
sasapar
tofFundament
alt
oolwehav
eunder
gonewi
tht
hecompar
ati
ve

anal
ysi
sofTATAMot
orst
hel
eadi
ngcompany
,Mar
utiSuzukiI
ndi
a’
slar
gestCar

manuf
act
urerandMahi
ndr
aandMahi
ndr
aal
ongwi
tht
hehel
pofr
ati
oanal
ysi
s.

Thef
undament
alaspectconsi
stsoff
inanci
alandNon-
Financi
alanal
ysi
soft
hese

compani
es.

Att
heendconcl
usi
onandr
ecommendat
ionshav
ebeenspeci
fi
edsoast
omake

t
hepr
ojectwor
kmor
emeani
ngf
ulandpur
posef
ul.
 ACKNOWLEDGEMENT

Accompl
i
shmentofat
askwi
thdesi
redsuccesscal
l
sfordedi
cat
iont
owar
ds

wor
kandpr
ompt
inggui
dance,
co-
oper
ati
onanddel
i
ber
ati
onf
rom seni
ors.

Att
heout
set
,Iwoul
dli
ket
othankMr
.K.Har
iKr
ishna,Associ
atePr
ofessor
,

Mal
l
areddy Col
l
ege of Engi
neer
ing and Technol
ogy f
or hi
s suppor
t and

pr
ofessi
onal
appr
oachi
ngui
dingmet
hrought
hecar
eful
det
ail
soft
hepr
oject
.

Iam v
erygr
atef
ult
omycompanygui
des,Mr
.Subr
amani
am andMr
.Ashokwho

notonl
yhel
pedmeont
hist
opi
cbutal
sohel
pedmet
ounder
standt
henuances

ofcapi
tal
mar
ket
.Inspi
teofhav
ingav
erybusyschedul
e,t
heymadesur
einev
ery

wayt
hatweacqui
ret
hebestpossi
bleexposur
eand knowl
edgedur
ing our

pr
oject
.

Iwoul
dbef
ail
i
ngi
nmydut
yifIdonoexpr
essmydeepsenseofgr
ati
tudet
oSr
i

K.
R.KMur
thy
,H.
O.D.andal
lthef
acul
tymember
sfort
hei
rval
uabl
eadv
iceand

gui
dancei
nthi
spr
oject
.Iam al
sot
hankf
ult
oourcol
l
egePr
inci
pal
,Dr
.V.
Siv
a

KumarReddy
.

SHAMEEM BEGUM
 CONTENTS

Chapt
erNo. Nameoft
heconcept PageNo.
I
ntr
oduct
ion 1

Needoft
hest
udy 2

Obj
ect
ivesoft
hest
udy 3
I
Scopeoft
hest
udy 4

Met
hodol
ogyoft
hest
udy 5

Li
mit
ati
onsoft
hest
udy 6

I
I Rev
iewofLi
ter
atur
e 7-
22

I
II I
ndust
ryPr
ofi
l
e 23-
42

I
V CompanyPr
ofi
l
e 43-
52

V Dat
aanal
ysi
sandi
nter
pret
ati
on 53-
73
Fi
ndi
ngs,
Suggest
ionsand
VI 74-
80
Concl
usi
on
VI
I Bi
bli
ogr
aphy 81
CHAPTERI-I
NTRODUCTI
ON
I
NTRODUCTI
ON

I
ndi
aisadev
elopi
ngcount
ry.Nowaday
smanypeopl
ear
eint
erest
edt
oinv
esti
n
f
inanci
almar
ket
sespeci
all
yonequi
ti
est
ogethi
ghr
etur
ns,andt
osav
etaxi
n
honestway
.Equi
ti
esar
epl
ayi
ngamaj
orr
olei
ncont
ri
but
ionofcapi
talt
othe
busi
nessf
rom t
hebegi
nni
ng.Si
ncet
hei
ntr
oduct
ionofshar
esconcept
,lar
ge
number
sofi
nvest
orsar
eshowi
ngi
nter
estt
oinv
esti
nst
ockmar
ket
.

I
nani
ndust
rypl
aguedwi
thskept
ici
sm andast
ockmar
keti
ncr
easi
ngl
ydi
ff
icul
t
t
opr
edi
ctandcont
endwi
th,
ifonel
ookshar
denought
her
emayst
il
lbeagenui
ne
ai
dfort
heDayTr
aderandShor
tTer
mInv
est
or.

Thepr
iceofasecur
it
yrepr
esent
saconsensus.I
tist
hepr
iceatwhi
chone
per
sonagr
eest
obuyandanot
heragr
eest
osel
l
.Thepr
iceatwhi
chani
nvest
ori
s
wi
l
li
ngt
obuyorsel
ldependspr
imar
il
yonhi
sexpect
ati
ons.I
fheexpect
sthe
secur
it
y'
spr
icet
ori
se,
hewi
l
lbuyi
t;i
fthei
nvest
orexpect
sthepr
icet
ofal
l
,hewi
l
l
sel
li
t.Thesesi
mpl
est
atement
sar
ethecauseofamaj
orchal
l
engei
nfor
ecast
ing
secur
it
ypr
ices,becauset
heyr
efert
o human expect
ati
ons.Asweal
lknow
f
ir
sthand,humansexpect
ati
onsar
enei
thereasi
l
yquant
if
iabl
enorpr
edi
ctabl
e.I
f
pr
icesar
ebasedoni
nvest
orexpect
ati
ons,t
henknowi
ngwhatasecur
it
yshoul
d
sel
lfor(
i.
e.,f
undament
alanal
ysi
s)becomesl
essi
mpor
tantt
hanknowi
ngwhat
ot
heri
nvest
orsexpecti
ttosel
lfor
.That
'snott
osayt
hatknowi
ngwhatasecur
it
y
shoul
dsel
lfori
sn'
timpor
tant
--
iti
s.Butt
her
eisusual
l
yaf
air
lyst
rongconsensus
ofast
ock'
sfut
ureear
ningst
hatt
heav
eragei
nvest
orcannotdi
spr
ove

Fundament
alanal
ysi
s and t
echni
calanal
ysi
s can co-
exi
st i
n peace and
compl
ementeachot
her
.Si
nceal
lthei
nvest
orsi
nthest
ockmar
ketwantt
omake
t
he maxi
mum pr
ofi
ts possi
ble,t
hey j
ust cannot af
for
dtoi
gnor
e ei
ther
f
undament
alort
echni
cal
anal
ysi
s.
NEEDOFTHESTUDY

Tost
artanybusi
nesscapi
talpl
aysmaj
orr
ole.Capi
talcanbeacqui
redi
ntwo
way
sbyi
ssui
ngshar
esorbyt
aki
ngdebtf
rom f
inanci
ali
nst
it
uti
onsorbor
rowi
ng
moneyf
rom f
inanci
ali
nst
it
uti
ons.Theowner
soft
hecompanyhav
eto pay
r
egul
ari
nter
estandpr
inci
pal
amountatt
heend.

St
ocki
sowner
shi
pinacompany
,wi
theachshar
eofst
ockr
epr
esent
ingat
iny
pi
eceofowner
shi
p.Themor
eshar
esy
ouown,
themor
eoft
hecompanyy
ouown.
Themor
eshar
esy
ouown,t
hemor
edi
vi
dendsy
ouear
nwhent
hecompany
makesapr
ofi
t.I
nthef
inanci
alwor
ld,
owner
shi
piscal
l
ed“
Equi
ty”
.
Adv
ant
agesofsel
l
ingst
ock:

 Acompanycanr
aisemor
ecapi
tal
thani
tcoul
dbor
row.
 Acompanydoesnothav
etomakeper
iodi
cint
erestpay
ment
stocr
edi
tor
s.
 Acompanydoesnothav
etomakepr
inci
pal
pay
ment
s

St
ock/
shar
espl
ayamaj
orr
olei
nacqui
ri
ngcapi
talt
othebusi
nessi
nret
urn
i
nvest
orsar
epai
ddi
vi
dendst
otheshar
est
heyown.Themor
eshar
esy
ouown
t
hemor
edi
vi
dendsy
our
ecei
ve.

Ther
oleofequi
tyanal
ysi
sist
opr
ovi
dei
nfor
mat
iont
othemar
ket
.Anef
fi
cient
mar
ketr
eli
esoni
nfor
mat
ion:al
ackofi
nfor
mat
ioncr
eat
esi
nef
fi
cienci
est
hat
r
esul
tinst
ocksbei
ngmi
srepr
esent
ed(
overorunderv
alued)
.Thi
sisv
aluabl
e
becausei
tfi
l
lsi
nfor
mat
iongapssot
hateachi
ndi
vi
dual
inv
est
ordoesnotneedt
o
anal
yzeev
eryst
ockt
her
ebymaki
ngt
hemar
ket
smor
eef
fi
cient
.
OBJECTI
VESOFTHESTUDY

Theobj
ect
iveoft
hispr
ojecti
sto deepl
yanal
yzeourI
ndi
anAut
omobi
l
e

I
ndust
ryf
or i
nvest
ment pur
pose by moni
tor
ing t
he gr
owt
hrat
e and

per
for
manceont
hebasi
sofhi
stor
ical
dat
a.

Themai
nobj
ect
ivesoft
hePr
ojectst
udyar
e:

 Det
ail
ed anal
ysi
sofAut
omobi
l
eindust
rywhi
chi
sgear
ing t
owar
ds

i
nter
nat
ional
standar
ds

 Anal
yzet
hei
mpactofqual
i
tat
ivef
act
orsoni
ndust
ry’
sandcompany
’s

pr
ospect
s

 Compar
ati
veanal
ysi
soft
hreet
oughcompet
it
orsTATAMot
ors,
Mar
uti

Suzuki
andMahi
ndr
aandMahi
ndr
athr
oughf
undament
alanal
ysi
s.

 Suggest
ing as t
o whi
ch company
’s shar
es woul
d be bestf
oran

i
nvest
ort
oinv
est
.
SCOPEOFTHESTUDY

Thescopeoft
hest
udyi
sident
if
iedaf
teranddur
ingt
hest
udyi
sconduct
ed.

Thepr
ojecti
sbasedont
ool
sli
kef
undament
alanal
ysi
sandr
ati
oanal
ysi
s.

Fur
ther
,thest
udyi
sbasedoni
nfor
mat
ionofl
astf
ivey
ear
s.

 Theanal
ysi
sismadebyt
aki
ngi
ntoconsi
der
ati
onf
ivecompani
esi
.e.

TATAMot
ors,
Mar
uti
Suzuki
andMahi
ndr
aandMahi
ndr
a.

 Thescopeoft
hest
udyi
sli
mit
edf
oraper
iodoff
ivey
ear
s.

 Thescopei
sli
mit
edt
oonl
ythef
undament
alanal
ysi
soft
hechosen

st
ocks.
METHODOLOGY

Resear
chdesi
gnorr
esear
chmet
hodol
ogyi
sthepr
ocedur
eofcol
l
ect
ing,

anal
yzi
ngandi
nter
pret
ingt
hedat
atodi
agnoset
hepr
obl
em andr
eactt
othe

oppor
tuni
tyi
nsuchawaywher
ethecost
scanbemi
nimi
zedandt
hedesi
red

l
evel
ofaccur
acycanbeachi
evedt
oar
ri
veatapar
ti
cul
arconcl
usi
on.

Themet
hodol
ogyusedi
nthest
udyf
ort
hecompl
eti
onoft
hepr
ojectandt
he

f
ulf
il
lmentoft
hepr
ojectobj
ect
ives.

Thesampl
eoft
hest
ocksf
ort
hepur
poseofcol
l
ect
ingsecondar
ydat
ahas

beensel
ect
edont
hebasi
sofRandom Sampl
i
ng.Thest
ocksar
echoseni
nan

unbi
asedmannerandeachst
ocki
schoseni
ndependentoft
heot
herst
ocks

chosen.Thest
ocksar
echosenf
rom t
heaut
omobi
l
esect
or.

Thesampl
esi
zef
ort
henumberofst
ocksi
stakenas3f
orf
undament
al

anal
ysi
sofst
ocksasf
undament
alanal
ysi
sisv
eryexhaust
iveandr
equi
res

det
ail
edst
udy
.
LI
MITATI
ONS

 Thi
sst
udyhasbeenconduct
edpur
elyt
ounder
standEqui
tyanal
ysi
sfor

i
nvest
ors.

 Thest
udyi
srest
ri
ctedt
othr
eecompani
esbasedonFundament
alanal
ysi
s.

 Thest
udyi
sli
mit
edt
othecompani
eshav
ingequi
ti
es.

 Det
ail
edst
udyoft
het
opi
cwasnotpossi
bleduet
oli
mit
edsi
zeoft
he

pr
oject
.

 Ther
ewasaconst
rai
ntwi
thr
egar
dtot
imeal
l
ocat
ionf
ort
her
esear
ch

st
udyi
.e.f
oraper
iodof45day
s.

 Suggest
ionsandconcl
usi
onsar
ebasedont
hel
i
mit
eddat
aoff
ivey
ear
s.
CHAPTERI
I-REVI
EW OFLI
TERATURE
SECURI
TYANALYSI
S

I
nvest
mentsuccessi
spr
ett
ymuchamat
terofcar
efulsel
ect
ionandt
imi
ngof

st
ockpur
chasescoupl
edwi
thper
fectmat
chi
ngt
oani
ndi
vi
dual
sri
skt
oler
ance.

I
nor
dert
ocar
ryoutsel
ect
ion,t
imi
ngandmat
chi
ng 
act
ionsani
nvest
ormust

conductdeepsecur
it
yanal
ysi
s.

I
nvest
orspur
chaseequi
tyshar
eswi
tht
wobasi
cobj
ect
ives;

1. Tomakecapi
tal
prof
it
sbysel
l
ingshar
esathi
gherpr
ices.

2. Toear
ndi
vi
dendi
ncome.

Theset
wof
act
orsar
eaf
fect
edbyahostoff
act
ors.Ani
nvest
orhast
ocar
eful
l
y

under
standandanal
yzeal
lthesef
act
ors.Ther
ear
ebasi
cal
l
ytwoappr
oachest
o

st
udysecur
it
ypr
ices and v
aluat
ion i
.e.f
undament
alanal
ysi
s and t
echni
cal

anal
ysi
s

Thev
alueofcommonst
ocki
sdet
ermi
nedi
nlar
gemeasur
ebyt
heper
for
mance

oft
hef
ir
mthati
ssuedt
hest
ock.I
fthecompanyi
sheal
thyandcandemonst
rat
e

st
rengt
handgr
owt
h,t
hev
alueoft
hest
ockwi
l
lincr
ease.Whenv
aluesi
ncr
ease

t
henpr
icesf
oll
ow andr
etur
nsonani
nvest
mentwi
l
lincr
ease.Howev
er,j
ustt
o

keept
hesav
vyi
nvest
oront
hei
rtoes,t
hemi
xiscompl
i
cat
edbyt
her
iskf
act
ors

i
nvol
ved.Fundament
alanal
ysi
sexami
nesal
lthedi
mensi
onsofr
iskexposur
e

andt
hepr
obabi
l
iti
esofr
etur
n,andmer
gest
hem wi
thbr
oadereconomi
canal
ysi
s

andgr
eat
eri
ndust
ryanal
ysi
stof
ormul
atet
hev
aluat
ionofast
ock.
FUNDAMENTALANALYSI
S

Fundament
alanal
ysi
sisamet
hodoff
orecast
ingt
hef
utur
epr
icemov
ement
s

ofaf
inanci
ali
nst
rumentbasedoneconomi
c,pol
i
tical
,env
ironment
alandot
her

r
elev
antf
act
orsandst
ati
sti
cst
hatwi
l
laf
fectt
hebasi
csuppl
yanddemandof

what
everunder
li
es t
he f
inanci
ali
nst
rument
.Iti
sthe st
udyofeconomi
c,

i
ndust
ryandcompanycondi
ti
onsi
nanef
for
ttodet
ermi
net
hev
alueofa

company
’sst
ock.Fundament
alanal
ysi
sty
pical
l
yfocusesonkeyst
ati
sti
csi
n

company
’sf
inanci
alst
atement
stodet
ermi
nei
fthest
ockpr
icei
scor
rect
ly

v
alued.Thet
erm si
mpl
yref
erst
otheanal
ysi
soft
heeconomi
cwel
l
-bei
ngofa

f
inanci
alent
it
yasopposedt
oonl
yit
spr
icemov
ement
s.

Fundament
alanal
ysi
sist
hecor
ner
stoneofi
nvest
ing.Thebasi
cphi
l
osophy

under
lyi
ngt
hef
undament
alanal
ysi
sist
hati
fani
nvest
ori
nvest
sre.
1inbuy
ing

ashar
eofacompany
,howmuchexpect
edr
etur
nsf
rom t
hisi
nvest
menthehas.

Thef
undament
alanal
ysi
sist
oappr
aiset
hei
ntr
insi
cval
ueofasecur
it
y.I
t

i
nsi
stst
hatnooneshoul
dpur
chaseorsel
lashar
eont
hebasi
soft
ipsand

r
umor
s.Thef
undament
alappr
oachcal
l
supont
hei
nvest
orst
omakehi
sbuyor

sel
ldeci
sionont
hebasi
sofadet
ail
edanal
ysi
soft
hei
nfor
mat
ionaboutt
he

company
,aboutt
hei
ndust
ry,andt
heeconomy
.Iti
sal
soknownas“
top-
down

appr
oach”
.Thi
sappr
oachat
tempt
stost
udyt
heeconomi
cscenar
io,i
ndust
ry

posi
ti
on and t
hecompanyexpect
ati
onsand i
sal
so known as“
economi
c-

i
ndust
ry-
companyappr
oach(
EICappr
oach)
”.
Thust
heEI
Cappr
oachi
nvol
vest
hreest
eps:

1. Economi
canal
ysi
s

2. I
ndust
ryanal
ysi
s

3. Companyanal
ysi
s
1.ECONOMI
CANALYSI
S

Thel
evelofeconomi
cact
ivi
tyhasani
mpactoni
nvest
menti
nmanyway
s.I
f

t
heeconomygr
owsr
api
dly
,thei
ndust
rycanal
sobeexpect
edt
oshow r
api
d

gr
owt
handv
icev
ersa.Whent
hel
evelofeconomi
cact
ivi
tyi
slow,st
ockpr
ices

ar
elow,andwhent
hel
evelofeconomi
cact
ivi
tyi
shi
gh,st
ockpr
icesar
ehi
gh

r
efl
ect
ing t
he pr
osper
ous out
lookf
orsal
es and pr
ofi
ts oft
he f
ir
ms.The

anal
ysi
s ofmacr
o economi
c env
ironmenti
s essent
ialt
o under
stand t
he

behav
ioroft
hest
ockpr
ices.

Thecommonl
yanal
yzedmacr
oeconomi
cfact
orsar
easf
oll
ows:

Gr
oss Domest
ic Pr
oduct(
GDP)
:GDP i
ndi
cat
es t
he r
ate ofgr
owt
h oft
he

economy
.Itr
epr
esent
sthe aggr
egat
eval
ue oft
he goods and ser
vices

pr
oducedi
ntheeconomy
.Itconsi
stsofper
sonalconsumpt
ionexpendi
tur
e,

gr
osspr
ivat
edomest
ici
nvest
mentandgov
ernmentexpendi
tur
eongoodsand

ser
vicesandnetexpor
tsofgoodsandser
vices.Thegr
owt
hrat
eofeconomy

poi
ntsoutt
hepr
ospect
sfort
hei
ndust
ri
alsect
orandt
her
etur
ninv
est
orscan

expectf
rom i
nvest
menti
nshar
es.Thehi
ghergr
owt
hrat
eismor
efav
orabl
eto

t
hest
ockmar
ket
.

Sav
ingsandi
nvest
ment
:Iti
sobv
ioust
hatgr
owt
hrequi
resi
nvest
mentwhi
chi
n

t
urnr
equi
res subst
ant
ialamountofdomest
ic sav
ings.St
ockmar
keti
sa

channelt
hroughwhi
cht
hesav
ingsar
emadeav
ail
abl
etot
hecor
por
atebodi
es.
Sav
ingsar
edi
str
ibut
edov
erv
ari
ousasset
sli
keequi
tyshar
es,
deposi
ts,
mut
ual

f
unds,r
ealest
ateandbul
l
ion.Thesav
ingsandi
nvest
mentpat
ter
nsoft
he

publ
i
caf
fectt
hest
ockt
oagr
eatext
ent
.

I
nfl
ati
on:Al
ongwi
tht
hegr
owt
hofGDP,
ift
hei
nfl
ati
onr
ateal
soi
ncr
eases,
then

t
her
ealgr
owt
hwoul
dbev
eryl
i
ttl
e.Theef
fect
sofi
nfl
ati
ononcapi
talmar
ket
s

ar
enumer
ous.Ani
ncr
easei
ntheexpect
edr
ateofi
nfl
ati
oni
sexpect
edt
o

causeanomi
nalr
isei
nint
erestr
ates.Al
so,i
tincr
easesuncer
tai
ntyoff
utur
e

busi
nessandi
nvest
mentdeci
sions.Asi
nfl
ati
oni
ncr
eases,i
tresul
tsi
next
ra

cost
stobusi
nesses,t
her
ebysqueezi
ngt
hei
rpr
ofi
tmar
ginsandl
eadi
ngt
oreal

decl
i
nesi
npr
ofi
tabi
l
ity
.

I
nter
estr
ates:Thei
nter
estr
ateaf
fect
sthecostoff
inanci
ngt
othef
ir
ms.A

decr
easei
nint
erestr
atei
mpl
i
esl
owercostoff
inancef
orf
ir
msandmor
e

pr
ofi
tabi
l
ity
.Mor
emoneyi
sav
ail
abl
eatal
oweri
nter
estr
atef
ort
hebr
oker
s

whoar
edoi
ngbusi
nesswi
thbor
rowedmoney
.Av
ail
abi
l
ityofcheapf
unds

encour
agesspecul
ati
onandr
isei
nthepr
iceofshar
es.

Taxst
ruct
ure:Ev
eryy
eari
nMar
ch,t
hebusi
nesscommuni
tyeager
lyawai
tst
he

Gov
ernment
’s announcementr
egar
ding t
he t
ax pol
i
cy.Concessi
ons and

i
ncent
ivesgi
vent
oacer
tai
nindust
ryencour
agei
nvest
menti
nthatpar
ti
cul
ar

i
ndust
ry.Taxr
eli
ef’
sgi
vent
o sav
ingsencour
agesav
ings.Thet
ypeoft
ax

exempt
ionhasi
mpactont
hepr
ofi
tabi
l
ityoft
hei
ndust
ri
es.
I
nfr
ast
ruct
uref
aci
l
iti
es:I
nfr
ast
ruct
uref
aci
l
iti
esar
eessent
ialf
ort
hegr
owt
hof

i
ndust
ri
alandagr
icul
tur
alsect
or.Awi
denet
wor
kofcommuni
cat
ionsy
stem i
s

amustf
ort
hegr
owt
hoft
heeconomy
.Regul
arsuppl
yofpowerwi
thoutany

powercutwoul
d

boostt
hepr
oduct
ion.Banki
ngandf
inanci
alsect
orsal
soshoul
dbesound

enough t
o pr
ovi
de adequat
e suppor
ttot
he i
ndust
ry.Good i
nfr
ast
ruct
ure

f
aci
l
iti
esaf
fectt
hest
ockmar
ketf
avor
abl
y.

2.I
NDUSTRYANALYSI
S

Ani
ndust
ryi
sagr
oupoff
ir
mst
hathav
esi
mil
art
echnol
ogi
calst
ruct
ureof

pr
oduct
ionandpr
oducesi
mil
arpr
oduct
sandI
ndust
ryanal
ysi
sisat
ypeof

busi
nessr
esear
cht
hatf
ocusesont
hest
atusofani
ndust
ryorani
ndust
ri
al

sect
or(
abr
oadi
ndust
rycl
assi
fi
cat
ion,l
i
ke"
manuf
act
uri
ng"
).I
rr
espect
iveofspeci
fi
c

economi
csi
tuat
ions,somei
ndust
ri
esmi
ghtbeexpect
edt
oper
for
m bet
ter
,andshar
epr
icesi
nthese

i
ndust
ri
esmaynotdecl
i
neasmuchasi
not
heri
ndust
ri
es.Thi
sident
if
icat
ionofeconomi
candi
ndust
ry

speci
fi
cfact
orsi
nfl
uenci
ngshar
epr
iceswi
l
lhel
pinv
est
orst
oident
if
ytheshar
est
hatf
iti
ndi
vi
dual

expect
ati
ons

I
ndust
ryLi
feCy
cle:
Thei
ndust
ryl
i
fecy
clet
heor
yisgener
all
yat
tr
ibut
edt
oJul
i
us

Gr
odensky
.Thel
i
fecy
cleoft
hei
ndust
ryi
ssepar
atedi
ntof
ourwel
ldef
ined

st
ages.

 Pi
oneer
ingst
age:Thepr
ospect
ivedemandf
ort
hepr
oducti
spr
omi
sing
 i
nthi
sst
ageandt
het
echnol
ogyoft
hepr
oducti
slow.Thedemandf
or

t
hepr
oductat
tract
smanypr
oducer
stopr
oducet
hepar
ti
cul
arpr
oduct
.

Ther
ewoul
dbesev
erecompet
it
ionandonl
yfi
tt
estcompani
essur
viv
e

t
hisst
age.Thepr
oducer
str
ytodev
elopbr
andname,di
ff
erent
iat
ethe

pr
oductandcr
eat
eapr
oducti
mage.I
nthi
ssi
tuat
ion,i
tisdi
ff
icul
tto

sel
ectcompani
esf
ori
nvest
mentbecauset
hesur
viv
alr
atei
sunknown.

 Rapi
dgr
owt
hst
age:Thi
sst
agest
art
swi
tht
heappear
anceofsur
viv
ing

f
ir
msf
rom t
hepi
oneer
ingst
age.Thecompani
est
hathav
ewi
thst
oodt
he

compet
it
iongr
owst
rongl
yinmar
ketshar
eandf
inanci
alper
for
¬mance.

Thet
echnol
ogyoft
hepr
oduct
ionwoul
dhav
eimpr
ovedr
esul
ti
ngi
nlow

costofpr
oduct
ionandgoodqual
i
typr
oduct
s.Thecompani
eshav
e

st
abl
e gr
owt
hrat
eint
his st
age and t
hey decl
are di
vi
dend t
othe

shar
e¬hol
der
s.I
tisadv
isabl
etoi
nvesti
ntheshar
esoft
hesecompani
es.

 Mat
uri
tyandst
abi
l
izat
ionst
age:t
hegr
owt
hrat
etendst
omoder
ateand

t
her
ateofgr
owt
hwoul
dbemor
eorl
essequalt
othei
ndust
ri
algr
owt
h

r
ate or t
he gr
oss domest
ic pr
oduct gr
owt
hrat
e.Sy
mpt
oms of

obsol
escence may appear i
n t
he t
echnol
ogy
. To keep goi
ng,

t
echnol
ogi
cali
nnov
a¬t
ions i
nthe pr
oduct
ion pr
ocess and pr
oduct
s

shoul
dbei
ntr
oduced.Thei
nvest
orshav
etocl
osel
ymoni
tort
heev
ent
s

t
hatt
akepl
acei
nthemat
uri
tyst
ageoft
hei
ndust
ry.

 Decl
i
nest
age:demandf
ort
hepar
ti
cul
arpr
oductandt
heear
ningsoft
he

compani
esi
nthei
ndust
rydecl
i
ne.I
tisbet
tert
oav
oidi
nvest
ingi
nthe

shar
esoft
hel
owgr
owt
hindust
ryev
eni
ntheboom per
iod.I
nvest
menti
n
 t
heshar
esoft
heset
ypesofcompani
esl
eadst
oer
osi
onofcapi
tal
.

Gr
owt
hoft
hei
ndust
ry:Thehi
stor
icalper
for
manceoft
hei
ndust
ryi
nter
msof

gr
owt
handpr
ofi
tabi
l
ityshoul
dbeanal
yzed.Thepastv
ari
abi
l
ityi
nret
urnand

gr
owt
hinr
eact
iont
omacr
oeconomi
cfact
orspr
ovi
deani
nsi
ghti
ntot
hef
utur
e.

Nat
ure ofcompet
it
ion:Nat
ure ofcompet
it
ion i
s an essent
ialf
act
ort
hat

det
ermi
nest
hedemandf
ort
hepar
ti
cul
arpr
oduct
,it
spr
ofi
tabi
l
ityandt
hepr
ice

oft
heconcer
nedcompanyscr
ips.Thecompani
es'
abi
l
ityt
owi
thst
andt
hel
ocal

aswel
last
hemul
ti
nat
ionalcompet
it
ioncount
smuch.I
ftoomanyf
ir
msar
e

pr
esenti
nthe or
gani
zed sect
or,t
he compet
it
ion woul
d be sev
ere.The

compet
i¬t
ionwoul
dleadt
oadecl
i
nei
nthepr
iceoft
hepr
oduct
.Thei
nvest
or

bef
orei
nvest
ingi
nthescr
ipofacompanyshoul
danal
yzet
hemar
ketshar
eof

t
hepar
ti
cul
arcompany
'spr
oductandshoul
dcompar
eitwi
tht
het
op f
ive

compani
es.

SWOTanal
ysi
s:SWOTanal
ysi
srepr
esent
sthest
rengt
h,weakness,oppor
tuni
ty

andt
hreatf
orani
ndust
ry.Ev
eryi
nvest
orshoul
dcar
ryoutaSWOTanal
ysi
sfor

t
hechoseni
ndust
ry.Takef
ori
nst
ance,i
ncr
easei
ndemandf
ort
hei
ndust
ry’
s

pr
oductbecomesi
tsst
rengt
h,pr
esenceofnumer
ouspl
ayer
sint
hemar
ket
,i.
e.

compet
it
ionbecomest
het
hreatt
oapar
ti
cul
arcompany
.Thepr
ogr
essi
nR&D

i
nthati
ndust
ryi
sanoppor
tuni
tyandent
ryofmul
ti
nat
ional
sint
hei
ndust
ryi
sa
t
hreat
.Int
hiswayt
hef
act
orsar
etobear
rangedandanal
yzed.
3.COMPANYANALYSI
S

I
nthecompanyanal
ysi
sthei
nvest
orassi
mil
atest
hesev
eralbi
tsofi
nfor
mat
ion

r
elat
edt
othecompanyandev
aluat
est
hepr
esentandf
utur
eval
uesoft
he

st
ock.The r
isk and r
etur
n associ
ated wi
tht
he pur
chase oft
he st
ock i
s

anal
yzedt
otakebet
teri
nvest
mentdeci
sions.Thepr
esentandf
utur
eval
uesar
e

af
fect
edbyanumberoff
act
ors.

Compet
it
iveedgeoft
hecompany
:Maj
ori
ndust
ri
esi
nIndi
aar
ecomposedof

hundr
edsofi
ndi
vi
dualcompani
es.Thought
henumberofcompani
esi
slar
ge,

onl
yfew compani
escont
rolt
hemaj
ormar
ketshar
e.Thecompet
it
ivenessof

t
hecompanycanbest
udi
edwi
tht
hehel
poft
hef
oll
owi
ng;

 Mar
ketshar
e:Themar
ketshar
eoft
heannualsal
eshel
pst
odet
ermi
nea

company
’sr
elat
ivecompet
it
iveposi
ti
onwi
thi
nthei
ndust
ry.I
fthemar
ket

shar
eishi
gh,t
hecompanywoul
dbeabl
eto meett
hecompet
it
ion

successf
ull
y.Thecompani
esi
nthemar
ketshoul
dbecompar
edwi
thl
i
ke

pr
oductgr
oupsot
her
wise,
ther
esul
tswi
l
lbemi
sleadi
ng.

 Gr
owt
hofsal
es:Ther
api
dgr
owt
hinsal
eswoul
dkeept
heshar
ehol
deri
n

abet
terposi
ti
ont
hanonewi
thst
agnantgr
owt
hrat
e.I
nvest
orsgener
all
y

pr
efersi
zeandgr
owt
hinsal
esbecauset
hel
argersi
zecompani
esmay

beabl
etowi
thst
andt
hebusi
nesscy
cler
athert
hant
hecompanyof

smal
l
ersi
ze.

 St
abi
l
ityofsal
es:I
faf
ir
m hasst
abl
esal
esr
evenue,i
twi
l
lhav
emor
e

st
abl
eear
nings.Thef
all
int
hemar
ketshar
eindi
cat
est
hedecl
i
ningt
rend
 ofcompany
,ev
eni
fthesal
esar
est
abl
e.Hencet
hest
abi
l
ityofsal
es

shoul
dbecompar
edwi
thi
tsmar
ketshar
eandt
hecompet
it
or’
smar
ket

shar
e.

Ear
ningsoft
hecompany
:Sal
esal
onedonoti
ncr
easet
heear
ningsbutt
he

cost
sand expensesoft
hecompanyal
so i
nfl
uencet
heear
nings.Fur
ther
,

ear
ningsdonotal
way
sincr
easewi
thi
ncr
easei
nsal
es.Thecompany
’ssal
es

mi
ghthav
eincr
easedbuti
tsear
ningspershar
emaydecl
i
neduet
ori
sei
ncost
s.

Hence,
thei
nvest
orshoul
dnotonl
ydependont
hesal
es,
butshoul
danal
yzet
he

ear
ningsoft
hecompany
.

Fi
nanci
alanal
ysi
s:Thebestsour
ceoff
inanci
ali
nfor
mat
ionaboutacompanyi
s

i
tsown f
inanci
alst
atement
s.Thi
sisa pr
imar
ysour
ceofi
nfor
mat
ion f
or

ev
aluat
ing t
he i
nvest
mentpr
ospect
sint
he par
ti
cul
arcompany
’s st
ock.

Fi
nanci
alst
atementanal
ysi
sist
hest
udyofacompany
’sf
inanci
alst
atement

f
rom v
ari
ous v
iewpoi
nts.The st
atementgi
ves t
he hi
stor
icaland cur
rent

i
nfor
mat
ionaboutt
hecompany
’soper
ati
ons.Hi
stor
icalf
inanci
alst
atement

hel
pst
opr
edi
ctt
hef
utur
eandt
hecur
renti
nfor
mat
ionai
dst
oanal
yzet
he

pr
esentst
atusoft
hecompany
.Thet
womai
nst
atement
susedi
ntheanal
ysi
s

ar
eBal
ancesheetandPr
ofi
tandLossAccount
.

Thebal
ancesheeti
soneoft
hef
inanci
alst
atement
sthatcompani
espr
epar
e

ev
eryy
earf
ort
hei
rshar
e¬hol
der
s.I
tisl
i
keaf
inanci
alsnapshot
,thecompany
's

f
inanci
alsi
tuat
ionatamomenti
nti
me.I
tispr
epar
edatt
hey
earend,
li
sti
ngt
he
company
'scur
rentasset
sandl
i
abi
l
iti
es.I
thel
pst
ost
udyt
hecapi
talst
ruct
ure

oft
hecompany
.Iti
sbet
terf
ort
hei
nvest
ort
oav
oidacompanywi
thexcessi
ve

debtcomponenti
nit
scapi
talst
ruct
ure.Fr
om t
he bal
ance sheet
,li
qui
dit
y

posi
ti
onoft
hecompanycanal
sobeassessedwi
tht
hei
nfor
mat
iononcur
rent

asset
sandcur
rentl
i
abi
l
iti
es.

Rat
io anal
ysi
s:Rat
ioi
sar
elat
ionshi
p bet
ween t
wo f
igur
es expr
essed

mat
hemat
ical
l
y.Fi
nanci
alr
ati
ospr
ovi
denumer
icalr
elat
ionshi
pbet
weent
wo

r
elev
antf
inanci
aldat
a.Fi
nanci
alr
ati
osar
ecal
cul
atedf
rom t
hebal
ancesheet

andpr
ofi
tandl
ossaccount
.Ther
elat
ionshi
pcanbeei
therexpr
essedasa

per
centorasaquot
ient
.Rat
iossummar
izet
hedat
aforeasyunder
standi
ng,

compar
isonandi
nter
pret
ati
ons.

Rat
ios f
ori
nvest
mentpur
poses can be cl
assi
fi
ed i
nto pr
ofi
tabi
l
ityr
ati
os,

t
urnov
err
ati
os,andl
ever
ager
ati
os.Pr
ofi
tabi
l
ityr
ati
osar
ethemostpopul
ar

r
ati
ossi
ncei
nvest
orspr
efert
omeasur
ethepr
esentpr
ofi
tper
for
manceand

uset
hisi
nfor
mat
iont
ofor
ecastt
hef
utur
est
rengt
hoft
hecompany
.Themost

of
tenusedpr
ofi
tabi
l
ityr
ati
osar
eret
urnonasset
s,pr
iceear
ningsmul
ti
pli
er,

pr
icet
obookv
alue,
pri
cet
ocashf
low,
andpr
icet
osal
es,
div
idendy
iel
d,r
etur
n

onequi
ty,
presentv
alueofcashf
lows,
andpr
ofi
tmar
gins.

a)Ret
urnonAsset
s(ROA)

ROAi
scomput
edast
hepr
oductoft
henetpr
ofi
tmar
ginandt
het
otalasset

t
urnov
err
ati
os.
 ROA = (
NetPr
ofi
t/
Tot
ali
ncome)x(
Tot
ali
ncome/
Tot
alAsset
s)

Thi
srat
ioi
ndi
cat
est
hef
ir
m'sst
rat
egi
csuccess.Compani
escanhav
eoneof

t
wost
rat
egi
es:costl
eader
shi
p,orpr
oductdi
ff
erent
iat
ion.ROAshoul
dber
isi
ng

or keepi
ng pace wi
tht
he company
's compet
i¬t
orsi
fthe company i
s

successf
ull
ypur
sui
ngei
theroft
hesest
rat
egi
es,
buthowROAr
iseswi
l
ldepend

ont
hecompany
'sst
rat
egy
.ROAshoul
dri
sewi
thasuccessf
ulcostl
eader
shi
p

st
rat
egybecauset
hecompany
’si
ncr
easi
ngoper
ati
ngef
fi
ciency
.Anexampl
eis

ani
ncr
easi
ng,t
otalasset
,tur
nov
err
ati
oast
hecompanyexpandsi
ntonew

mar
ket
s,i
ncr
easi
ngi
tsmar
ketshar
e.Thecompanymayachi
evel
eader
shi
pby

usi
ngi
tsasset
smor
eef
fi
cient
ly.Wi
thasuccessf
ulpr
oductdi
ff
erent
iat
ion

st
rat
egy
,ROAwi
l
lri
sebecauseofar
isi
ngpr
ofi
tmar
gin.

b)Ret
urnonI
nvest
ment(
ROI
)

ROIi
sther
etur
noncapi
tali
nvest
edi
nbusi
ness,
i.
e.,
ifani
nvest
mentRs1cr
ore

i
nmen,machi
nes,l
andandmat
eri
ali
smadet
ogener
ateRs.25l
akhsofnet

pr
ofi
t,t
hent
heROIi
s25%. Thecomput
ati
onofr
etur
noni
nvest
menti
sas

f
oll
ows:

Ret
urnonI
nvest
ment(
ROI
)=(
Netpr
ofi
t/
Equi
tyi
nvest
ment
s)x100

Ast
hisr
ati
orev
eal
showwel
lther
esour
cesofaf
ir
m ar
ebei
ngused,
highert
he

r
ati
o,bet
terar
ether
esul
ts.Ther
etur
nonshar
ehol
der
’si
nvest
mentshoul
dbe

compar
edwi
tht
her
etur
nofot
hersi
mil
arf
ir
msi
nthesamei
ndust
ry.Thei
ner
t-
f
ir
m compar
isonoft
hisr
ati
odet
ermi
neswhet
hert
hei
nvest
ment
sint
hef
ir
m

ar
eat
tract
iveornotast
hei
nvest
orswoul
dli
ket
oinv
estonl
ywher
ether
etur
n

i
shi
gher
.

c)Ret
urnonEqui
ty

Ret
urnonequi
tymeasur
eshow muchanequi
tyshar
ehol
der
'si
nvest
menti
s

act
ual
l
year
ning.Ther
etur
nonequi
tyt
ell
sthei
nvest
orhowmucht
hei
nvest
ed

r
upeei
sear
ningf
rom t
hecompany
.Thehi
ghert
henumber
,thebet
teri
sthe

per
for
manceoft
hecompanyandsuggest
stheusef
ulnessoft
hepr
oject
sthe

companyhasi
nvest
edi
n.

Thecomput
ati
onofr
etur
nonequi
tyi
sasf
oll
ows:

Ret
urnonequi
ty=(
Netpr
ofi
ttoowner
s/v
alueoft
hespeci
fi
cowner
's

Cont
ri
but
iont
othebusi
ness)x100

Ther
ati
oismor
emeani
ngf
ult
otheequi
tyshar
ehol
der
swhoar
einv
est
edt
o

know pr
ofi
tsear
nedbyt
hecompanyandt
hosepr
ofi
tswhi
chcanbemade

av
ail
abl
etopaydi
vi
dendt
othem.

d)Ear
ningsperShar
e(EPS)

Thi
srat
iodet
ermi
neswhatt
hecompanyi
sear
ningf
orev
eryshar
e.Formany

i
nvest
ors,ear
ningsar
ethemosti
mpor
tantt
ool
.EPSi
scal
cul
atedbydi
vi
ding

t
heear
nings(
netpr
ofi
t)byt
het
otal
numberofequi
tyshar
es.

Thecomput
ati
onofEPSi
sasf
oll
ows:
 Ear
ningspershar
e=Netpr
ofi
t/
Numberofshar
esout
standi
ng

TheEPSi
sagoodmeasur
eofpr
ofi
tabi
l
ityandwhencompar
edwi
thEPSof

si
mil
arot
hercompani
es,i
tgi
ves a v
iew oft
he compar
ati
ve ear
nings or

ear
ningspowerofaf
ir
m.EPS cal
cul
atedf
oranumberofy
ear
sindi
cat
es

whet
herornotear
ningpoweroft
hecompanyhasi
ncr
eased.

e)Di
vi
dendperShar
e(DPS)

Theext
entofpay
mentofdi
vi
dendt
otheshar
ehol
der
sismeasur
edi
nthef
orm

ofdi
vi
dendpershar
e.Thedi
vi
dendpershar
egi
vest
heamountofcashf
low

f
rom t
hecompanyt
otheowner
sandi
scal
cul
atedasf
oll
ows:

Di
vi
dendpershar
e=Tot
aldi
vi
dendpay
ment/Numberofshar
esout
standi
ng

Thepay
mentofdi
vi
dendcanhav
esev
erali
nter
pret
ati
onst
otheshar
ehol
der
.

Thedi
str
ibut
ionofdi
vi
¬dendcoul
dbet
houghtofast
hedi
str
ibut
ionofexcess

pr
ofi
ts/
abnor
malpr
ofi
tsbyt
hecompany
.Ont
heot
herhand,i
tcoul
dal
sobe

negat
ivel
yint
erpr
eted as l
ackofi
nvest
mentoppor
tuni
ti
es.I
n al
l
,di
vi
dend

pay
outgi
vest
heext
entofi
nfl
owst
otheshar
ehol
der
sfr
om t
hecompany
.

f
)Di
vi
dendPay
outRat
io

Fr
om t
hepr
ofi
tsofeachcompanyacashf
low cal
l
eddi
vi
dendi
sdi
str
ibut
ed

amongi
tsshar
ehol
der
s.Thi
sist
hecont
inuousst
ream ofcashf
low t
othe
owner
sofshar
es,
apar
tfr
om t
hepr
icedi
ff
erent
ial
s(capi
tal
gai
ns)i
nthemar
ket
.

Ther
etur
ntot
heshar
ehol
der
s,i
nthef
orm ofdi
vi
dend,outoft
hecompany
's

pr
ofi
tismeasur
edt
hrought
hepay
outr
ati
o.Thepay
outr
ati
oiscomput
edas

f
oll
ows:

Pay
outRat
io=(
Div
idendpershar
e/Ear
ningspershar
e)*100

Theper
cent
ageofpay
outr
ati
ocanal
sobeusedt
ocomput
etheper
cent
ageof

r
etai
ned ear
nings.The pr
ofi
ts av
ail
abl
efordi
str
ibut
ion ar
e ei
therpai
d as

di
vi
dendsorr
etai
nedi
nter
nal
l
yforbusi
nessgr
owt
hoppor
tuni
ti
es.Hence,
when

di
vi
dendsar
enotdecl
ared,t
heent
ir
epr
ofi
tispl
oughedbacki
ntot
hebusi
ness

f
ori
tsf
utur
einv
est
ment
s.

g)Di
vi
dendYi
eld

Di
vi
dendy
iel
discomput
edbyr
elat
ingt
hedi
vi
dendpershar
etot
hemar
ket

pr
iceoft
heshar
e.Themar
ketpl
acepr
ovi
desoppor
tuni
ti
esf
ort
hei
nvest
ort
o

buyt
hecompany
'sshar
eatanypoi
ntoft
ime.Thepr
iceatwhi
cht
heshar
ehas

beenboughtf
rom t
hemar
keti
stheact
ualcostoft
hei
nvest
mentt
othe

shar
ehol
der
.The mar
ketpr
ice i
sto be t
aken as t
he cum-
div
idend pr
ice.

Di
vi
dendy
iel
drel
atest
heact
ualcostt
othecashf
lowsr
ecei
vedf
rom t
he

company
.Thecomput
ati
onofdi
vi
dendy
iel
disasf
oll
ows

Di
vi
dendy
iel
d=(
Div
idendpershar
e/Mar
ketpr
icepershar
e)*100

Hi
ghdi
vi
dendy
iel
drat
iosar
eusual
l
yint
erpr
etedasunder
val
uedcompani
esi
n
t
hemar
ket
.Themar
ketpr
icei
sameasur
eoff
utur
edi
scount
edv
alues,whi
l
e

t
hedi
vi
dendpershar
eist
hepr
esentr
etur
nfr
om t
hei
nvest
ment
.Hence,
ahi
gh

di
vi
dendy
iel
dimpl
i
est
hatt
heshar
ehasbeenunderpr
icedi
nthemar
ket
.On

t
heot
herhandal
owdi
vi
dendy
iel
dneednotbei
nter
pret
edasov
erv
aluat
ionof

shar
es.Acompanyt
hatdoesnotpayoutdi
vi
dendswi
l
lnothav
eadi
vi
dend

y
iel
dandt
her
ealmeasur
eoft
hemar
ketpr
icewi
l
lbei
nter
msofear
ningsper

shar
eandnott
hrought
hedi
vi
dendpay
ment
s.

h)Pr
ice/
Ear
ningsRat
io(
P/E)

TheP/
Emul
ti
pli
erort
hepr
iceear
ningsr
ati
orel
atest
hecur
rentmar
ketpr
iceof

t
heshar
etot
heear
ningspershar
e.Thi
siscomput
edasf
oll
ows:

Pr
ice/
ear
ningsr
ati
o=Cur
rentmar
ketpr
ice/Ear
ningspershar
e

Thi
srat
ioi
scal
cul
atedt
omakeanest
imat
eofappr
eci
ati
oni
nthev
alueofa

shar
eofacompanyandi
swi
del
yusedbyi
nvest
orst
odeci
dewhet
herornott
o

buy shar
es i
n a par
ti
cul
arcompany
.Many i
nvest
ors pr
efert
o buy t
he

company
'sshar
esatal
owP/
Erat
iosi
ncet
hegener
ali
nter
pret
ati
oni
sthatt
he

mar
keti
sunder
val
uingt
heshar
eandt
her
ewi
l
lbeacor
rect
ioni
nthemar
ket

pr
icesoonerorl
ater
.Av
eryhi
ghP/
Erat
ioont
heot
herhandi
mpl
i
est
hatt
he

company
'sshar
esar
eov
erv
aluedandt
hei
nvest
orcanbenef
itbysel
l
ingt
he
shar
esatt
hishi
ghmar
ketpr
ice.

i
)Debt
-t
o-Equi
tyRat
io

Debt
-Equi
tyr
ati
oisusedt
omeasur
ethecl
aimsofout
sider
sandt
heowner
s

agai
nstt
hef
ir
m’sasset
s.

Debt
-t
o-equi
tyr
ati
o=Out
sider
sFunds/Shar
ehol
der
sFunds

The debt
-equi
tyr
ati
ois cal
cul
ated t
o measur
ethe ext
entt
o whi
ch debt

f
inanci
nghasbeenusedi
nabusi
ness.I
tindi
cat
est
hepr
opor
ti
onat
ecl
aimsof

owner
sandt
heout
sider
sagai
nstt
hef
ir
m’sasset
s.Thepur
posei
stogetan

i
deaoft
hecushi
onav
ail
abl
etoout
sider
sont
hel
i
qui
dat
ionoft
hef
ir
m.

CHAPTERI
II-I
NDUSTRYPROFI
LE
FI
NANCI
ALMARKETS

Fi
nancei
sthepr
e-r
equi
sit
eformoder
nbusi
nessandf
inanci
ali
nst
it
uti
onspl
ay

av
italr
olei
nthe economi
c sy
stem.I
tist
hrough f
inanci
almar
ket
s and

i
nst
it
uti
onst
hatt
hef
inanci
alsy
stem ofaneconomywor
ks.Fi
nanci
almar
ket
s

r
efert
othei
nst
it
uti
onalar
rangement
sfordeal
i
ngi
nfi
nanci
alasset
sandcr
edi
t

i
nst
rument
sofdi
ff
erentt
ypessuchascur
rency
,cheques,bankdeposi
ts,bi
l
ls,

bonds,
equi
ti
es,
etc.

Fi
nanci
almar
keti
sabr
oadt
erm descr
ibi
nganymar
ket
placewher
ebuy
ersand

sel
l
erspar
ti
cipat
eint
het
radeofasset
ssuchasequi
ti
es,
bonds,
cur
renci
esand

der
ivat
ives.Theyar
ety
pical
l
ydef
ined byhav
ing t
ranspar
entpr
ici
ng,basi
c

r
egul
ati
onsont
radi
ng,
cost
sandf
eesandmar
ketf
orcesdet
ermi
ningt
hepr
ices

ofsecur
it
iest
hatt
rade.

Gener
all
y,t
her
eisnospeci
fi
cpl
aceorl
ocat
iont
oindi
cat
eaf
inanci
almar
ket
.

Wher
everaf
inanci
alt
ransact
iont
akespl
ace,i
tisdeemedt
ohav
etakenpl
ace

i
nthef
inanci
almar
ket
.Hencef
inanci
almar
ket
sar
eper
vasi
vei
nnat
uresi
nce

f
inanci
alt
ransact
ionsar
ethemsel
vesv
eryper
vasi
vet
hroughoutt
heeconomi
c

sy
stem.Fori
nst
ance,i
ssueofequi
tyshar
es,gr
ant
ingofl
oanbyt
erml
endi
ng

i
nst
it
uti
ons,deposi
tofmoneyi
ntoabank,pur
chaseofdebent
ures,sal
eof

shar
esandsoon.

I
nanut
shel
l
,fi
nanci
almar
ket
sar
ethecr
edi
tmar
ket
scat
eri
ngt
othev
ari
ous
needsoft
hei
ndi
vi
dual
s,f
ir
msandi
nst
it
uti
onsbyf
aci
l
itat
ingbuy
ingandsel
l
ing

off
inanci
alasset
s,cl
aimsandser
vices.
CLASSI
FICATI
ONOFFI
NANCI
ALMARKETS
Capi
tal
Mar
ket

Thecapi
talmar
keti
samar
ketf
orf
inanci
alasset
swhi
chhav
eal
ongor

i
ndef
ini
temat
uri
ty.Gener
all
y,i
tdeal
swi
thl
ongt
erm secur
it
ieswhi
chhav
ea

per
iod ofabov
eoney
ear
.Int
hewi
destsense,i
tconsi
stsofaser
iesof

channel
sthr
oughwhi
cht
hesav
ingsoft
hecommuni
tyar
emadeav
ail
abl
efor

i
ndust
ri
aland commer
cialent
erpr
ises and publ
i
c aut
hor
it
ies.As a whol
e,

capi
tal
mar
ketf
aci
l
itat
esr
aisi
ngofcapi
tal
.

Themaj
orf
unct
ionsper
for
medbyacapi
tal
mar
ketar
e:

1.Mobi
l
izat
ionoff
inanci
alr
esour
cesonanat
ion-
widescal
e.

2.Secur
ing t
he f
orei
gn capi
taland know-
how t
ofi
l
lup def
ici
tint
he

r
equi
redr
esour
cesf
oreconomi
cgr
owt
hataf
ast
err
ate.

3.Ef
fect
iveal
l
ocat
ionoft
hemobi
l
izedf
inanci
alr
esour
ces,
bydi
rect
ingt
he

samet
opr
oject
syi
eldi
nghi
ghesty
iel
dort
othepr
oject
sneededt
o

pr
omot
ebal
ancedeconomi
cdev
elopment
.

Capi
tal
mar
ketconsi
stsofpr
imar
ymar
ketandsecondar
ymar
ket
.

Pr
imar
ymar
ket
:Pr
imar
ymar
keti
samar
ketf
ornew i
ssuesornew f
inanci
al

cl
aims.Hencei
tisal
socal
l
edasNew I
ssueMar
ket
.Itbasi
cal
l
ydeal
swi
th

t
hosesecur
it
ieswhi
char
eissuedt
othepubl
i
cfort
hef
ir
stt
ime.Themar
ket
,

t
her
efor
e,makesav
ail
abl
eanewbl
ockofsecur
it
iesf
orpubl
i
csubscr
ipt
ion.I
n

ot
herwor
ds,i
tdeal
swi
thr
aisi
ngoff
reshcapi
talbycompani
esei
therf
orcash

orf
orconsi
der
ati
onot
hert
hancash.Thebestexampl
ecoul
dbeI
nit
ialPubl
i
c
Of
fer
ing(
IPO)wher
eaf
ir
m of
fer
sshar
est
othepubl
i
cfort
hef
ir
stt
ime.

Secondar
ymar
ket
:Secondar
ymar
keti
samar
ketwher
eexi
sti
ngsecur
it
iesar
e

t
raded.I
not
herwor
ds,
secur
it
ieswhi
chhav
eal
readypassedt
hroughnewi
ssue

mar
ketar
etr
adedi
nthi
smar
ket
.Gener
all
y,suchsecur
it
iesar
equot
edi
nthe

st
ockexchangeandi
tpr
ovi
desacont
inuousandr
egul
armar
ketf
orbuy
ingand

sel
l
ingofsecur
it
ies.Thi
smar
ketconsi
stsofal
lst
ockexchangesr
ecogni
zedby

t
hegov
ernmentofI
ndi
a.

MoneyMar
ket

Moneymar
ket
sar
ethemar
ket
sforshor
t-
ter
m,hi
ghl
yli
qui
ddebtsecur
it
ies.

Moneymar
ketsecur
it
iesar
egener
all
yver
ysaf
einv
est
ment
swhi
chr
etur
n

r
elat
ivel
ylowi
nter
estr
atet
hati
smostappr
opr
iat
efort
empor
arycashst
orage

orshor
tter
m t
imeneeds.I
tconsi
stsofanumberofsub-
mar
ket
swhi
ch

col
l
ect
ivel
y const
it
ute t
he money mar
ket namel
y cal
l money mar
ket
,

commer
cial
bil
l
smar
ket
,accept
ancemar
ket
,andTr
easur
ybi
l
lmar
ket
.

Der
ivat
ivesMar
ket

The der
ivat
ives mar
keti
sthe f
inanci
almar
ketf
order
ivat
ives,f
inanci
al

i
nst
rument
sli
kef
utur
escont
ract
soropt
ions,whi
char
eder
ivedf
rom ot
her

f
ormsofasset
s.Ader
ivat
ivei
sa 
secur
it
ywhosepr
icei
sdependentuponor

der
ivedf
rom 
oneormor
eunder
lyi
ngasset
s. 
Theder
ivat
ivei
tsel
fismer
elya

cont
ractbet
weent
woormor
epar
ti
es.I
ts 
val
uei
sdet
ermi
ned 
byf
luct
uat
ions 
i
n

t
he under
lyi
ng asset
. 
The mostcommon under
lyi
ng asset
sincl
ude 
stocks,
bonds,
 
commodi
ti
es,
 
cur
renci
es,i
nter
est r
ates and mar
ket i
ndexes. The

i
mpor
tantf
inanci
alder
ivat
ivesar
ethef
oll
owi
ng:

 For
war
ds:For
war
dsar
etheol
destofal
ltheder
ivat
ives.A f
orwar
d

cont
ractr
efer
stoanagr
eementbet
weent
wopar
ti
est
oexchangean

agr
eedquant
it
yofanassetf
orcashatacer
tai
ndat
einf
utur
eata

pr
edet
ermi
nedpr
icespeci
fi
edi
nthatagr
eement
.Thepr
omi
sedasset

maybecur
rency
,commodi
ty,
inst
rumentet
c.

 Fut
ures:Fut
urecont
racti
sver
ysi
mil
art
o af
orwar
d cont
racti
n al
l

r
espect
sexcept
ingt
hef
actt
hati
tiscompl
etel
yast
andar
dizedone.I
tis

not
hingbutast
andar
dizedf
orwar
dcont
ractwhi
chi
slegal
l
yenf
orceabl
e

andal
way
str
adedonanor
gani
zedexchange.

 Opt
ions:A f
inanci
alder
ivat
ive 
thatr
epr
esent
s a 
cont
ractsol
d byone

par
ty(
opt
ionwr
it
er)
 t
oanot
herpar
ty(
opt
ionhol
der
).Thecont
ractof
fer
s

t
hebuy
ert
her
ight
,butnott
heobl
i
gat
ion,t
obuy(
cal
l
)orsel
l(put
)a

secur
it
yorot
herf
inanci
alasset
 atan agr
eed-
upon pr
ice(
thest
ri
ke

pr
ice)
 dur
ingacer
tai
nper
iodoft
imeoronaspeci
fi
cdat
e(exer
cisedat
e).

Cal
lopt
ionsgi
vet
heopt
iont
o buyatcer
tai
npr
ice,sot
hebuy
erwoul
d

wantt
hest
ockt
ogoup.Putopt
ionsgi
vet
heopt
iont
osel
latacer
tai
n

pr
ice,
sot
hebuy
erwoul
dwantt
hest
ockt
ogodown.

 Swaps:I
tisy
etanot
herexci
ti
ngt
radi
ngi
nst
rument
.Inf
act
,iti
sthe

combi
nat
ionoff
orwar
dsbyt
wocount
erpar
ti
es.I
tisar
rangedt
oreapt
he

benef
it
sar
isi
ngf
rom t
hef
luct
uat
ionsi
nthemar
ket– ei
thercur
rency

mar
ketori
nter
estr
atemar
ketoranyot
hermar
ketf
ort
hatmat
ter
.
For
eignExchangeMar
ket

I
tisamar
keti
nwhi
chpar
ti
cipant
sar
eabl
etobuy
,sel
l
,exchange 
andspecul
ate

oncur
renci
es.
  
For
eignexchangemar
ket
s ar
emadeupofbanks,commer
cial

compani
es,cent
ralbanks,i
nvest
mentmanagementf
ir
ms,hedgef
unds,and

r
etai
lfor
exbr
oker
sandi
nvest
ors.Thef
orexmar
keti
sconsi
der
edt
obet
he

l
argestf
inanci
almar
keti
nthewor
ld.I
tisawor
ldwi
dedecent
ral
i
zedov
er-
the-

count
erf
inanci
almar
ketf
ort
het
radi
ngofcur
renci
es.Becauset
hecur
rency

mar
ket
sar
elar
geandl
i
qui
d,t
heyar
ebel
i
evedt
obet
hemostef
fi
cientf
inanci
al

mar
ket
s. 
Iti
simpor
tantt
oreal
i
zet
hatt
hef
orei
gnexchangemar
keti
snota

si
ngl
e exchange,buti
sconst
ruct
ed ofagl
obalnet
wor
kof
 comput
erst
hat

connect
spar
ti
ci
pant
sfr
om al
lpar
tsoft
hewor
ld.

Commodi
ti
esMar
ket

I
tisaphy
sicalorv
irt
ualmar
ket
placef
orbuy
ing,sel
l
ingandt
radi
ngr
aw or

pr
imar
ypr
oduct
s. 
Fori
nvest
ors'pur
posest
her
ear
ecur
rent
lyabout50maj
or

commodi
tymar
ket
swor
ldwi
det
hatf
aci
l
itat
einv
est
mentt
radei
nnear
ly100

pr
imar
ycommodi
ti
es.
 Commodi
ti
esar
espl
i
tint
otwo t
ypes:har
d andsof
t

commodi
ti
es.
 Har
dcommodi
ti
esar
ety
pical
l
ynat
uralr
esour
cest
hatmustbe

mi
ned orext
ract
ed (
gol
d,r
ubber
,oi
l
,et
c.)
,wher
eassof
tcommodi
ti
esar
e
agr
icul
tur
alpr
oduct
sorl
i
vest
ock(
cor
n,wheat
,cof
fee,sugar
,soy
beans,por
k,

et
c.)
I
NDI
ANFI
NANCI
ALMARKETS

I
ndi
aFi
nanci
almar
keti
soneoft
heol
desti
nthewor
ldandi
sconsi
der
edt
obe

t
he f
ast
estgr
owi
ng and bestamong al
lthe mar
ket
s oft
he emer
ging

economi
es.

Thehi
stor
yofI
ndi
ancapi
talmar
ket
sdat
esback200y
ear
stowar
dtheendof

t
he18t
hcent
urywhenI
ndi
awasundert
her
uleoft
heEastI
ndi
aCompany
.The

dev
elopmentoft
hecapi
talmar
keti
nIndi
aconcent
rat
edar
oundMumbaiwher
e

nol
esst
han200t
o250secur
it
iesbr
oker
swer
eact
ivedur
ingt
hesecondhal
fof

t
he19t
hcent
ury
.

Thef
inanci
almar
keti
nIndi
atodayi
smor
edev
elopedt
hanmanyot
hersect
ors

becausei
twasor
gani
zedl
ongbef
orewi
tht
hesecur
it
iesexchangesofMumbai
,

AhmadabadandKol
kat
awer
eest
abl
i
shedasear
lyast
he19t
hcent
ury
.

Byt
heear
ly1960st
het
otalnumberofsecur
it
iesexchangesi
nIndi
aroset
o

ei
ght
,incl
udi
ngMumbai
,AhmadabadandKol
kat
aapar
tfr
om Madr
as,Kanpur
,

Del
hi,
Bangal
oreandPune.Todayt
her
ear
e21r
egi
onalsecur
it
iesexchangesi
n

I
ndi
ainaddi
ti
ont
othecent
ral
i
zedNSE(
Nat
ionalSt
ockExchange)andOTCEI

(
Overt
heCount
erExchangeofI
ndi
a).

Howev
ert
he st
ock mar
ket
sinI
ndi
aremai
ned st
agnantdue t
o st
ri
ngent

cont
rol
sont
hemar
keteconomyt
hatal
l
owedonl
yahandf
ulofmonopol
i
est
o

domi
nat
ethei
rrespect
ivesect
ors.Thecor
por
atesect
orwasn'
tal
l
owedi
nto

manyi
ndust
rysegment
s,whi
chwer
edomi
nat
edbyt
hest
atecont
rol
l
edpubl
i
c
sect
orr
esul
ti
ngi
nst
agnat
ionoft
heeconomyr
ightupt
otheear
ly1990s.

Ther
eaf
terwhent
heI
ndi
aneconomybeganl
i
ber
ali
zi
ngandt
hecont
rol
sbegan

t
obedi
smant
ledoreasedout
;thesecur
it
iesmar
ket
swi
tnessedaf
lur
ryof

I
PO’
sthatwer
elaunched.Thi
sresul
ted i
n manynew compani
es acr
oss

di
ff
erenti
ndust
rysegment
stocomeupwi
thnewerpr
oduct
sandser
vices.

Ar
emar
kabl
efeat
ureoft
hegr
owt
hoft
heI
ndi
aneconomyi
nrecenty
ear
shas

beent
her
olepl
ayedbyi
tssecur
it
iesmar
ket
sinassi
sti
ngandf
uel
l
ingt
hat

gr
owt
hwi
thmoneyr
osewi
thi
ntheeconomy
.Thi
swasi
nmar
kedcont
rastt
o

t
hei
nit
ialphaseofgr
owt
hinmanyoft
hef
astgr
owi
ngeconomi
esofEastAsi
a

t
hatwi
tnessedhugedosesofFDI(
For
eignDi
rectI
nvest
ment
)spur
ri
nggr
owt
h

i
nthei
rini
ti
alday
sofmar
ketdecont
rol
.Dur
ingt
hisphasei
nIndi
amuchoft
he

or
gani
zedsect
orhasbeenaf
fect
edbyhi
ghgr
owt
hast
hef
inanci
almar
ket
s

pl
ayedanal
l
-incl
usi
ver
olei
nsust
aini
ngf
inanci
alr
esour
cemobi
l
izat
ion.Many

PSUs(
Publ
i
cSect
orUnder
taki
ngs)t
hatdeci
dedt
oof
fl
oadpar
toft
hei
requi
ty

wer
eal
sohel
pedbyt
hewel
l
-or
gani
zedsecur
it
iesmar
keti
nIndi
a.

Thel
aunchoft
heNSE(
Nat
ionalSt
ockExchange)andt
heOTCEI(
Overt
he

Count
erExchangeofI
ndi
a)dur
ingt
hemi
d1990sbyt
hegov
ernmentofI
ndi
a

wasmeantt
ousheri
naneasi
erandmor
etr
anspar
entf
orm oft
radi
ngi
n

secur
it
ies.TheNSEwasconcei
vedast
hemar
ketf
ort
radi
ngi
nthesecur
it
iesof

compani
esf
rom t
hel
arge-
scal
esect
orandt
heOTCEIf
ort
hosef
rom t
hesmal
l
-

scal
esect
or.Whi
l
etheNSEhasnotj
ustdonewel
ltogr
owandev
olv
eint
othe
v
irt
ualbackboneofcapi
talmar
ket
sinI
ndi
atheOTCEIst
ruggl
edandi
syett
o

showanysi
gnofgr
owt
handdev
elopment
.Thei
ntegr
ati
onofI
Tint
othecapi
tal

mar
keti
nfr
ast
ruct
urehasbeenpar
ti
cul
arl
ysmoot
hinI
ndi
aduet
othecount
ry’
s

wor
ldcl
assI
Tindust
ry.Thi
shaspushedupt
heoper
ati
onalef
fi
ciencyoft
he

I
ndi
anst
ockmar
kett
ogl
obalst
andar
dsandasar
esul
tthecount
ryhasbeen

abl
etocapi
tal
i
zeoni
tshi
ghgr
owt
handat
tractf
orei
gncapi
tal
li
kenev
erbef
ore.

Ther
egul
ati
ngaut
hor
it
yforcapi
talmar
ket
sinI
ndi
aist
heSEBI(
Secur
it
iesand

ExchangeBoar
dofI
ndi
a).SEBIcamei
ntopr
omi
nencei
nthe1990saf
tert
he

capi
talmar
ket
sexper
iencedsomet
urbul
ence.I
thadt
otakedr
ast
icmeasur
es

t
opl
ugmanyl
oophol
est
hatwer
eexpl
oit
edbycer
tai
nmar
ketf
orcest
oadv
ance

t
hei
rvest
edi
nter
est
s.Af
tert
hisi
nit
ialphaseofst
ruggl
eSEBIhasgr
owni
n

st
rengt
hast
her
egul
atorofI
ndi
a’
scapi
talmar
ket
sandasoneoft
hecount
ry’
s

mosti
mpor
tanti
nst
it
uti
ons.
FI
NANCI
ALMARKETREGULATI
ONS

Regul
ati
onsar
eanabsol
utenecessi
tyi
nthef
aceoft
hegr
owi
ngi
mpor
tanceof

capi
talmar
ket
sthr
oughoutt
hewor
ld.Thedev
elopmentofamar
keteconomy

i
sdependentont
hedev
elopmentoft
hecapi
talmar
ket
.Ther
egul
ati
onofa

capi
talmar
keti
nvol
vest
her
egul
ati
onofsecur
it
ies;t
heser
ulesenabl
ethe

capi
tal
mar
kett
ofunct
ionmor
eef
fi
cient
lyandi
mpar
ti
all
y.

Awel
lregul
atedmar
kethast
hepot
ent
ialt
oencour
ageaddi
ti
onali
nvest
orst
o

par
take,andcont
ri
but
ein,f
urt
her
ingt
hedev
elopmentoft
heeconomy
.The

chi
efcapi
talmar
ketr
egul
ator
yaut
hor
it
yisSecur
it
iesandExchangeBoar
dof

I
ndi
a(SEBI
).

SEBIi
sther
egul
atorf
ort
hesecur
it
iesmar
keti
nIndi
a.I
tist
heapexbodyt
o

dev
elopandr
egul
atet
hest
ockmar
keti
nIndi
aItwasf
ormedof
fi
cial
l
ybyt
he

Gov
ernmentofI
ndi
ain1992wi
thSEBIAct1992bei
ngpassedbyt
heI
ndi
an

Par
li
ament
.Chai
red byC B Bhav
e,SEBIi
s headquar
ter
ed i
nthe popul
ar

busi
ness di
str
ictofBandr
a-Kur
la compl
ex i
n Mumbai
,and has Nor
ther
n,

East
ern,Sout
her
nandWest
ernr
egi
onalof
fi
cesi
nNewDel
hi,Kol
kat
a,Chennai

andAhmedabad.I
npl
aceofGov
ernmentCont
rol
,ast
atut
oryandaut
onomous

r
egul
ator
yboar
dwi
thdef
inedr
esponsi
bil
i
ties,t
ocov
erbot
hdev
elopment&

r
egul
ati
onoft
hemar
ket
,andi
ndependentpower
shasbeensetup.

Thebasi
cobj
ect
ivesoft
heBoar
dwer
eident
if
iedas:

 t
opr
otectt
hei
nter
est
sofi
nvest
orsi
nsecur
it
ies;
 t
opr
omot
ethedev
elopmentofSecur
it
iesMar
ket
;
 t
oregul
atet
hesecur
it
iesmar
ketand
 Format
ter
sconnect
edt
her
ewi
thori
nci
dent
alt
her
eto.

Si
ncei
tsi
ncept
ion SEBIhasbeen wor
king t
arget
ing t
hesecur
it
iesand i
s

at
tendi
ng t
othe f
ulf
il
lmentofi
ts obj
ect
ives wi
th commendabl
e zealand

dex
ter
it
y.The i
mpr
ovement
sint
he secur
it
ies mar
ket
sli
ke capi
tal
i
zat
ion

r
equi
rement
s,mar
gini
ng,est
abl
i
shmentofcl
ear
ingcor
por
ati
onset
c.r
educed

t
her
iskofcr
edi
tandal
sor
educedt
hemar
ket
.

SEBIhas i
ntr
oduced t
he compr
ehensi
ver
egul
ator
y measur
es,pr
escr
ibed

r
egi
str
ati
onnor
ms,t
heel
i
gibi
l
itycr
it
eri
a,t
hecodeofobl
i
gat
ionsandt
hecode

ofconductf
ordi
ff
erenti
nter
medi
ari
esl
i
ke,
banker
stoi
ssue,
mer
chantbanker
s,

br
oker
sandsub-
broker
s,r
egi
str
ars,por
tfol
i
omanager
s,cr
edi
trat
ingagenci
es,

under
wri
ter
sandot
her
s.I
thasf
ramedby
e-l
aws,r
iski
dent
if
icat
ionandr
isk

managementsy
stemsf
orCl
ear
inghousesofst
ockexchanges,sur
vei
l
lance

sy
stem et
c.whi
chhasmadedeal
i
ngi
nsecur
it
iesbot
hsaf
eandt
ranspar
entt
o

t
heendi
nvest
or.

Anot
hersi
gni
fi
cantev
enti
stheappr
ovaloft
radi
ngi
nst
ocki
ndi
ces(
li
keS&P

CNXNi
ft
y&Sensex)i
n2000.Amar
ketI
ndexi
saconv
eni
entandef
fect
ive

pr
oductbecauseoft
hef
oll
owi
ngr
easons:

 I
tact
sasabar
omet
erf
ormar
ketbehav
ior
;
 I
tisusedt
obenchmar
kpor
tfol
i
oper
for
mance;

 I
tisusedi
nder
ivat
ivei
nst
rument
sli
kei
ndexf
utur
esandi
ndexopt
ions;

 I
tcanbeusedf
orpassi
vef
undmanagementasi
ncaseofI
ndexFunds.

Twobr
oadappr
oachesofSEBIi
stoi
ntegr
atet
hesecur
it
iesmar
ketatt
he

nat
ionall
evel
,andal
sot
odi
ver
sif
ythet
radi
ngpr
oduct
s,sot
hatt
her
eisan

i
ncr
easei
nnumberoft
rader
sincl
udi
ngbanks,f
inanci
ali
nst
it
uti
ons,i
nsur
ance

compani
es,mut
ualf
unds,pr
imar
y deal
ers et
c.t
otr
ansactt
hrough t
he

Exchanges.I
nthi
scont
extt
hei
ntr
oduct
ionofder
ivat
ivest
radi
ngt
hroughI
ndi
an

St
ockExchangesper
mit
tedbySEBIi
n2000ADi
sar
eal
landmar
k.

SEBIhas enj
oyed success as a r
egul
atorby pushi
ng sy
stemi
cref
orms

aggr
essi
vel
yandsuccessi
vel
y(e.
g.t
hequi
ckmov
ementt
owar
dsmaki
ngt
he

mar
ket
sel
ect
roni
candpaper
lessr
oll
i
ngset
tl
ementonT+2bases)
.SEBIhas

beenact
ivei
nset
ti
ngupt
her
egul
ati
onsasr
equi
redunderl
aw.

STOCKEXCHANGESI
NINDI
A

St
ockExchangesar
eanor
gani
zedmar
ket
place,ei
thercor
por
ati
onormut
ual

or
gani
zat
ion,wher
emember
soft
heor
gani
zat
iongat
hert
otr
adecompany

st
ocksorot
hersecur
it
ies.Themember
smayactei
therasagent
sfort
hei
r

cust
omer
s,oraspr
inci
pal
sfort
hei
rownaccount
s.

Aspert
heSecur
it
iesCont
ract
sRegul
ati
onAct
,1956ast
ockexchangei
san

associ
ati
on,or
gani
zat
ionorbodyofi
ndi
vi
dual
swhet
heri
ncor
por
atedornot
,
est
abl
i
shedf
ort
hepur
poseofassi
sti
ng,r
egul
ati
ngandcont
rol
l
ingbusi
nessi
n

buy
ing,
sel
l
inganddeal
i
ngi
nsecur
it
ies.

St
ockexchangesf
aci
l
itat
efort
hei
ssueandr
edempt
ionofsecur
it
iesandot
her

f
inanci
ali
nst
rument
sincl
udi
ngt
hepay
mentofi
ncomeanddi
vi
dends.The

r
ecor
dkeepi
ngi
scent
ralbutt
radei
sli
nkedt
osuchphy
sicalpl
acebecause

moder
n mar
ket
sar
e comput
eri
zed.The t
rade on an exchange i
sonl
yby

member
sandst
ockbr
okerdohav
easeatont
heexchange.

Li
stofSt
ockExchangesi
nIndi
a

BombaySt
ockExchange
Nat
ional
StockExchange 16.Meer
ut
OTCExchangeofI
ndi
a 17.Pune
Regi
onal
StockExchanges 18.Saur
asht
raKut
ch
1.Ahmedabad 19.Ut
tarPr
adesh
2.Bangal
ore 20.Vadodar
a
3.Bhubaneswar
4.Cal
cut
ta
5.Cochi
n
6.Coi
mbat
ore
7.Del
hi
8.Guwahat
i
9.Hy
der
abad
10.Jai
pur
11.Ludhi
ana
12.Madhy
aPr
adesh
13.Madr
as
14.Magadh
15.Mangal
ore
 BOMBAYSTOCKEXCHANGE

Av
erycommonnamef
oral
ltr
ader
sint
hest
ockmar
ket
,BSE,
standsf
orBombaySt
ock

Exchange.I
tist
heol
destmar
ketnotonl
yint
hecount
ry,butal
soi
nAsi
a.I
ntheear
ly

day
s,BSE wasknownas"
TheNat
iveShar
e& St
ockBr
oker
sAssoci
ati
on.
"Itwas

est
abl
i
shedi
nthey
ear1875andbecamet
hef
ir
stst
ockexchangei
nthecount
ryt
obe

r
ecogni
zedbyt
hegov
ernment
.In1956,
BSEobt
ainedaper
manentr
ecogni
ti
onf
rom t
he

Gov
ernmentofI
ndi
aundert
heSecur
it
iesCont
ract
s(Regul
ati
on)Act
,1956.

I
nthepastandev
ennow,i
tpl
aysapi
vot
alr
olei
nthedev
elopmentoft
hecount
ry'
s

capi
talmar
ket
.Thi
sisr
ecogni
zedwor
ldwi
deandi
tsi
ndex,SENSEX,i
sal
sot
racked

wor
ldwi
de.Ear
li
eri
twasanAssoci
ati
onofPer
sons(
AOP)
,butnowi
tisademut
ual
i
sed

andcor
por
ati
sedent
it
yincor
por
atedundert
hepr
ovi
sionsoft
heCompani
esAct
,1956,

pur
suantt
otheBSE(
Cor
por
ati
sat
ionandDemut
ual
i
zat
ion)Scheme,2005not
if
iedby

t
heSecur
it
iesandExchangeBoar
dofI
ndi
a(SEBI
).

BSEVi
sion

Thev
isi
onoft
heBombaySt
ockExchangei
sto"
Emer
geast
hepr
emi
erI
ndi
anst
ock

exchangebyest
abl
i
shi
nggl
obal
benchmar
ks.
"
BSEManagement

BombaySt
ockExchangei
smanagedpr
ofessi
onal
l
ybyBoar
dofDi
rect
ors.I
tcompr
ises

ofemi
nentpr
ofessi
onal
s,r
epr
esent
ati
ves ofTr
adi
ng Member
s and t
he Managi
ng

Di
rect
or.TheBoar
disani
ncl
usi
veoneandi
sshapedt
obenef
itf
rom t
hemar
ket

i
nter
medi
ari
espar
ti
ci
pat
ion.

TheBoar
dexer
cisescompl
etecont
rolandf
ormul
atesl
argerpol
i
cyi
ssues.Theday
-to-

dayoper
ati
onsofBSE ar
emanaged byt
heManagi
ng Di
rect
orand i
tsschoolof

pr
ofessi
onal
asamanagementt
eam.

BSENet
wor
k

TheExchanger
eachesphy
sical
l
yto417ci
ti
esandt
ownsi
nthecount
ry.Thef
ramewor
k

ofi
thasbeendesi
gnedt
osaf
eguar
dmar
keti
ntegr
it
yandt
ooper
atewi
tht
ranspar
ency
.

I
tpr
ovi
desanef
fi
ci
entmar
ketf
ort
het
radi
ngi
nequi
ty,
debti
nst
rument
sandder
ivat
ives.

I
tsonl
i
net
radi
ngsy
stem,
popul
arl
yknownasBOLT,
isapr
opr
iet
arysy
stem andi
tisBS

7799-
2-2002 cer
ti
fi
ed.TheBOLT net
wor
kwasexpanded,nat
ionwi
de,i
n1997.The

sur
vei
l
lanceandcl
ear
ing&set
tl
ementf
unct
ionsoft
heExchangear
eISO 9001:
2000

cer
ti
fi
ed.
BSEFact
s

BSEasabr
andi
ssy
nony
mouswi
thcapi
talmar
ket
sinI
ndi
a.TheBSESENSEXi
sthe

benchmar
kequi
tyi
ndext
hatr
efl
ect
sther
obust
nessoft
heeconomyandf
inance.I
twas

t
he–

 Fi
rsti
nIndi
atoi
ntr
oduceEqui
tyDer
ivat
ives

 Fi
rsti
nIndi
atol
aunchaFr
eeFl
oatI
ndex

 Fi
rsti
nIndi
atol
aunchUS$v
ersi
onofBSESensex

 Fi
rsti
nIndi
atol
aunchExchangeEnabl
edI
nter
netTr
adi
ngPl
atf
orm

 Fi
rsti
nIndi
atoobt
ainI
SOcer
ti
fi
cat
ionf
orSur
vei
l
lance,
Clear
ing&Set
tl
ement

 '
BSEOn-
LineTr
adi
ngSy
stem’
(BOLT)hasbeenawar
dedt
hegl
obal
l
y

r
ecogni
zedt
heI
nfor
mat
ionSecur
it
yManagementSy
stem st
andar
d

BS7799-
2:2002.

 Fi
rstt
ohav
eanexcl
usi
vef
aci
l
ityf
orf
inanci
alt
rai
ning

 Mov
edf
rom OpenOut
cryt
oEl
ect
roni
cTr
adi
ngwi
thi
njust50day
s

BSEwi
thi
tsl
onghi
stor
yofcapi
talmar
ketdev
elopmenti
sful
l
ygear
edt
ocont
inuei
ts

cont
ri
but
ionst
ofur
thert
hegr
owt
hoft
hesecur
it
iesmar
ket
soft
hecount
ry,
thushel
ping

I
ndi
aincr
easesi
tsspher
eofi
nfl
uencei
nint
ernat
ionalf
inanci
almar
ket
s.
NATI
ONALSTOCKEXCHANGEOFI
NDI
ALI
MITED

TheNat
ionalSt
ockExchangeofI
ndi
aLi
mit
edhasgenesi
sint
her
epor
toft
heHi
gh

Power
edSt
udyGr
ouponEst
abl
i
shmentofNewSt
ockExchanges,
whi
chr
ecommended

pr
omot
ionofaNat
ional
StockExchangebyf
inanci
ali
nst
it
uti
ons(
FI’
s)t
opr
ovi
deaccess

t
oinv
est
orsf
rom al
lacr
oss t
he count
ry on an equalf
oot
ing.Based on t
he

r
ecommendat
ions,
NSEwaspr
omot
edbyl
eadi
ngFi
nanci
alI
nst
it
uti
onsatt
hebehestof

t
heGov
ernmentofI
ndi
aandwasi
ncor
por
atedi
nNov
ember1992asat
ax-
pay
ing

companyunl
i
keot
herst
ockExchangei
nthecount
ry.

Oni
tsr
ecogni
ti
onasast
ockexchangeundert
heSecur
it
iesCont
ract
s(Regul
ati
on)Act
,

1956i
nApr
il1993,NSEcommencedoper
ati
onsi
ntheWhol
esal
eDebtMar
ket(
WDM)

segmenti
nJune1994.TheCapi
talMar
ket(
Equi
ti
es)segmentcommencedoper
ati
ons

i
nNov
ember1994andoper
ati
onsi
nDer
ivat
ivessegmentcommencedi
nJune2000.

NSEGROUP

Nat
ional
Secur
it
iesCl
ear
ingCor
por
ati
onLt
d.(
NSCCL)

I
tis a whol
l
y owned subsi
diar
y,whi
ch was i
ncor
por
ated i
n August1995 and

commencedcl
ear
ingoper
ati
onsi
nApr
il1996.I
twasf
ormedt
obui
l
dconf
idencei
n

cl
ear
ingandset
tl
ementofsecur
it
ies,
topr
omot
eandmai
ntai
ntheshor
tandconsi
stent

set
tl
ementcy
cles,t
opr
ovi
deacount
er-
par
tyr
iskguar
ant
eeandt
ooper
ateat
ightr
isk

cont
ainmentsy
stem.

NSE.
ITLt
d.
I
tisal
soawhol
l
yownedsubsi
diar
yofNSEandi
sit
sITar
m.Thi
sar
m oft
heNSEi
s

uni
quel
yposi
ti
oned t
o pr
ovi
de pr
oduct
s,ser
vices and sol
uti
ons f
ort
he secur
it
ies

i
ndust
ry.NSE.
ITpr
imar
il
yfocusesoni
nthear
eaoft
radi
ng,br
okerf
ront
-endandback-

of
fi
ce,cl
ear
ing and set
tl
ement
,web-
based,i
nsur
ance,et
c.Al
ong wi
tht
his,i
tal
so

pr
ovi
desconsul
tancyand i
mpl
ement
ati
on ser
vicesi
n Dat
a War
ehousi
ng,Busi
ness

Cont
inui
ty Pl
ans, Si
te Mai
ntenance and Backups, St
rat
us Mai
nfr
ame Faci
l
ity

Management
,Real
TimeMar
ketAnal
ysi
s&Fi
nanci
alNews.

I
ndi
aIndexSer
vices&Pr
oduct
sLt
d.(
II
SL)

I
tisaj
ointv
ent
urebet
weenNSEandCRI
SILLt
d.t
opr
ovi
deav
ari
etyofi
ndi
cesand

i
ndexr
elat
edser
vicesandpr
oduct
sfort
heI
ndi
anCapi
talmar
ket
s.I
twassetupi
nMay

1998.I
ISLhasaconsul
ti
ngandl
i
censi
ngagr
eementwi
tht
heSt
andar
dandPoor
's(
S&P)
,

wor
ld'
sleadi
ngpr
ovi
derofi
nvest
ibl
eequi
tyi
ndi
ces,
forco-
brandi
ngequi
tyi
ndi
ces.

Nat
ional
Secur
it
iesDeposi
tor
yLt
d.(
NSDL)

NSEj
oinedhandswi
thI
DBIandUTIt
opr
omot
edemat
eri
ali
zat
ionofsecur
it
ies.Thi
s

st
ep was t
aken t
o sol
ve pr
obl
ems r
elat
ed t
otr
adi
ng i
n phy
sicalsecur
it
ies.I
t

commencedoper
ati
onsi
nNov
ember1996.

NSEFact
s

 I
tusessat
ell
i
tecommuni
cat
iont
echnol
ogyt
oener
gizepar
ti
cipat
ionf
rom ar
ound

400ci
ti
esi
nIndi
a.

 NSEcanhandl
eupt
o1mi
l
li
ont
radesperday
.
  I
tisoneoft
hel
argesti
nter
act
iveVSATbasedst
ockexchangesi
nthewor
ld.

 TheNSE-net
wor
kist
hel
argestpr
ivat
ewi
dear
eanet
wor
kinI
ndi
aandt
hef
ir
st

ext
endedC-BandVSATnet
wor
kint
hewor
ld.

 Pr
esent
ly mor
ethan 9000 user
s ar
etr
adi
ng on t
he r
ealt
ime-
onl
i
ne NSE

appl
i
cat
ion.

Today
,NSEi
soneoft
hel
argestexchangesi
nthewor
ldandst
il
lfor
gingahead.AtNSE,

wear
econst
ant
lywor
kingt
owar
dscr
eat
ingamor
etr
anspar
ent
,vi
brantandi
nnov
ati
ve

capi
tal
mar
ket
.

OVERTHECOUNTEREXCHANGEOFI
NDI
A

OTCEIwasi
ncor
por
atedi
n1990asasect
ion25companyundert
hecompani
esAct

1956andi
srecogni
zedasast
ockexchangeundersect
ion4oft
hesecur
it
iesCont
ract
s

Regul
ati
onAct
,1956.Theexchangewassetupt
oai
dent
erpr
isi
ngpr
omot
esi
nrai
sing

f
inancef
ornew pr
oject
sinacostef
fect
ivemannerandt
opr
ovi
dei
nvest
orswi
tha

t
ranspar
entandef
fi
ci
entmodeoft
radi
ngModel
edal
ongt
hel
i
nesoft
heNASDAQ

mar
ketofUSA,OTCEIi
ntr
oducedmanynov
elconcept
stot
heI
ndi
ancapi
talmar
ket
s

suchasscr
een-
basednat
ionwi
det
radi
ng,sponsor
shi
pofcompani
es,mar
ketmaki
ng

andscr
ipl
esst
radi
ng.Asameasur
eofsuccessoft
heseef
for
ts,t
heExchanget
oday

has115l
i
sti
ngsandhasassi
stedi
npr
ovi
dingcapi
talf
orent
erpr
isest
hathav
egoneon

t
obui
l
dsuccessf
ulbr
andsf
ort
hemsel
vesl
i
keVI
PAdv
ant
a,Sonor
aTi
l
es&Br
il
li
ant

mi
ner
alwat
er,
etc.

Needf
orOTCEI
:
St
udi
esbyNASSCOM,sof
twar
etechnol
ogypar
ksofI
ndi
a,t
hev
ent
urecapi
tal
sfunds

andt
hegov
ernment
’sI
TtasksFor
ce,aswel
lasr
isi
ngi
nter
esti
nIT,Phar
maceut
ical
,

Bi
otechnol
ogyandMedi
ashar
eshav
erepeat
edl
yemphasi
zedt
heneedf
oranat
ional

st
ockmar
ketf
ori
nnov
ati
onandhi
ghgr
owt
hcompani
es.

I
nnov
ati
ve compani
es ar
e cr
it
icalt
o dev
elopi
ng economi
cs l
i
ke I
ndi
a,whi
ch i
s

under
goi
ng a maj
or t
echnol
ogi
cal r
evol
uti
on. Wi
th t
hei
r abi
l
iti
es t
o gener
ate

empl
oymentoppor
tuni
ti
esandcont
ri
but
etot
heeconomy
,iti
sessent
ialt
hatt
hese

compani
esnotonl
yexpandexi
sti
ngoper
ati
onsbutal
sosetupnewuni
ts.Thekeyi
ssue

f
ort
hesecompani
esi
srai
singt
imel
y,costef
fect
iveandl
ongt
erm capi
talt
osust
ain

t
hei
roper
ati
onsandenhancegr
owt
h.Suchcompani
es,par
ti
cul
arl
ythoset
hathav
e

beeni
noper
ati
onf
orashor
tti
me,ar
eunabl
etor
aisef
undst
hrought
het
radi
ti
onal

f
inanci
ngmet
hods,
becauset
heyhav
enoty
etbeenev
aluat
edbyt
hef
inanci
alwor
ld.
CHAPTERI
V-COMPANYPROFI
LE
 I
NDI
AINFOLI
NELI
MITED

I
ndi
aInf
oli
nei
saone-
stopf
inanci
alser
vicesshop,mostr
espect
edf
orqual
i
tyofi
ts

i
nfor
mat
ion,
per
sonal
i
zedser
viceandcut
ti
ng-
edget
echnol
ogy
.

Vi
sion

Ourv
isi
oni
stobet
hemostr
espect
edcompanyi
nthef
inanci
alser
vicesspace.

I
ndi
aInf
oli
neGr
oup

TheI
ndi
aInf
oli
negr
oup,compr
isi
ngt
hehol
dingcompany
,Indi
aInf
oli
neLi
mit
edandi
ts

whol
l
y-ownedsubsi
diar
ies,i
ncl
udet
heent
ir
efi
nanci
alser
vicesspacewi
thof
fer
ings

r
angi
ngf
rom Equi
tyr
esear
ch,Equi
ti
esandder
ivat
ivest
radi
ng,Commodi
ti
est
radi
ng,

Por
tfol
i
o ManagementSer
vices,Mut
ualFunds,Li
feI
nsur
ance,Fi
xed deposi
ts,GoI

bondsandot
hersmal
lsav
ingsi
nst
rument
stol
oanpr
oduct
sandI
nvest
mentbanki
ng.

I
ndi
aInf
oli
ne al
so owns and manages t
he websi
tes www.
indi
ainf
oli
ne.
com and

www.
5pai
sa.
com.The company has a net
wor
k ofov
er2100 busi
ness l
ocat
ions

(
branchesandsub-
broker
s)spr
eadacr
ossmor
ethan450ci
ti
esandt
owns.Thegr
oup

cat
erst
oappr
oxi
mat
elyami
l
li
oncust
omer
s.

Founded i
n 1995 by Mr
.Ni
rmalJai
n(Chai
rman and Managi
ng Di
rect
or)as an

i
ndependentbusi
ness r
esear
ch and i
nfor
mat
ion pr
ovi
der
,the company gr
adual
l
y

ev
olv
edi
ntoaone-
stopf
inanci
alser
vicessol
uti
onspr
ovi
der
.

I
ndi
aInf
oli
ner
ecei
vedr
egi
str
ati
onf
orahousi
ngf
inancecompanyf
rom t
heNat
ional
Housi
ngBankandr
ecei
vedt
he‘
Fast
estgr
owi
ngEqui
tyBr
oki
ngHouse-Lar
gef
ir
ms’i
n

I
ndi
abyDun&Br
adst
reeti
n2009.I
tal
sor
ecei
vedt
heI
nsur
ancebr
oki
ngl
i
censef
rom

I
RDA;r
ecei
vedt
hev
ent
urecapi
tall
i
cense;r
ecei
vedi
npr
inci
pleappr
ovalt
osponsora

mut
ualf
und;r
ecei
ved‘
Bestbr
oker
-Indi
a’awar
dfr
om Fi
nanceAsi
a;‘
MostI
mpr
oved

Br
oker
age-I
ndi
a’awar
dfr
om Asi
amoney
.

COMPANYSTRUCTURE

I
ndi
aInf
oli
neLi
mit
edi
sli
stedonbot
hthel
eadi
ngst
ockexchangesi
nIndi
a,v
iz.t
he

St
ockExchange,Mumbai(
BSE)andt
heNat
ionalSt
ockExchange(
NSE)andi
sal
soa

memberofbot
htheex
changes.I
tisengagedi
nthebusi
nessesofEqui
ti
esbr
oki
ng,

Weal
thAdv
isor
ySer
vicesandPor
tfol
i
oManagementSer
vices.I
tof
fer
sbr
oki
ngser
vices

i
ntheCashandDer
ivat
ivessegment
soft
heNSEaswel
last
heCashsegmentoft
he

BSE.I
tisr
egi
ster
edwi
thNSDLaswel
lasCDSLasadeposi
tor
ypar
ti
cipant
,pr
ovi
dinga

one-
stopsol
uti
onf
orcl
i
ent
str
adi
ngi
ntheequi
ti
esmar
ket
.Ithasr
ecent
lyl
aunchedi
ts

I
nvest
mentbanki
ngandI
nst
it
uti
onal
Broki
ngbusi
ness.

ASEBIaut
hor
izedPor
tfol
i
oManager
;itof
fer
sPor
tfol
i
oManagementSer
vicest
ocl
i
ent
s.

Theseser
vicesar
eof
fer
edt
ocl
i
ent
sasdi
ff
erentschemes,
whi
char
ebasedondi
ff
eri
ng

i
nvest
mentst
rat
egi
esmadet
oref
lectt
hev
ari
edr
isk-
ret
urnpr
efer
encesofcl
i
ent
s.
I
ndi
aInf
oli
neMedi
aandResear
chSer
vicesLi
mit
ed

Theser
vicesr
epr
esentast
rongsuppor
tthatdr
ivest
hebr
oki
ng,commodi
ti
es,mut
ual

f
undandpor
tfol
i
omanagementser
vicesbusi
nesses.I
tunder
takesequi
ti
esr
esear
ch

whi
chi
sacknowl
edgedbynoneot
hert
hanFor
besas'
Bestoft
heWeb'and'
…amust

r
eadf
ori
nvest
orsi
nAsi
a'
.I
ndi
aInf
oli
ne'
sresear
chi
sav
ail
abl
enotj
ustov
ert
hei
nter
net

butal
sooni
nter
nat
ionalwi
reser
vicesl
i
keBl
oomber
g(Code:I
ILL)
,ThomsonFi
rstCal
l

andI
nter
netSecur
it
ieswher
eIndi
aInf
oli
nei
samongstt
hemostr
eadI
ndi
anbr
oker
s.

I
ndi
aInf
oli
neCommodi
ti
esLi
mit
ed.

I
ndi
aInf
oli
neCommodi
ti
esPv
tLi
mit
edi
sengagedi
nthebusi
nessofcommodi
ti
es

br
oki
ng.Thei
rexper
iencei
nsecur
it
iesbr
oki
ngempower
edt
hem wi
tht
her
equi
sit
eski
l
ls

andt
echnol
ogi
est
o al
l
ow t
hem t
o of
fercommodi
ti
esbr
oki
ngasacont
ra-
cycl
i
cal

al
ter
nat
ivet
oequi
ti
esbr
oki
ng.I
tenj
oysmember
shi
pswi
tht
heMCXandNCDEX,t
wo
l
eadi
ngI
ndi
ancommodi
ti
esexchanges,andr
ecent
lyacqui
redmember
shi
pofDGCX.I
t

hasamul
ti
-channeldel
i
ver
ymodel
,maki
ngi
tamongt
hesel
ectf
ew t
oof
feronl
i
neas

wel
lasof
fl
inet
radi
ngf
aci
l
iti
es.

I
ndi
aInf
oli
neMar
ket
ing&Ser
vices

I
ndi
aInf
oli
neMar
ket
ingandSer
vicesLi
mit
edi
sthehol
dingcompanyofI
ndi
aInf
oli
ne

I
nsur
anceSer
vicesLi
mit
edandI
ndi
aInf
oli
neI
nsur
anceBr
oker
sLi
mit
ed.

 I
ndi
aInf
oli
neI
nsur
anceSer
vicesLi
mit
edi
sar
egi
ster
edCor
por
ateAgentwi
tht
he

I
nsur
ance Regul
ator
y and Dev
elopmentAut
hor
it
y(I
RDA)
.Iti
sthe l
argest

Cor
por
ateAgentf
orI
CICIPr
udent
ialLi
feI
nsur
anceCoLi
mit
ed,whi
chi
sIndi
a'
s

l
argestpr
ivat
eLi
feI
nsur
anceCompany
.Indi
aInf
oli
newast
hef
ir
stcor
por
ate

agentt
ogetl
i
censedbyI
RDAi
near
ly2001.

 I
ndi
aInf
oli
neI
nsur
anceBr
oker
sLi
mit
edI
ndi
aInf
oli
neI
nsur
anceBr
oker
sLi
mit
ed

i
sanewl
yfor
medsubsi
diar
ywhi
chwi
l
lcar
ryoutt
hebusi
nessofI
nsur
ance

br
oki
ng.

I
ndi
aInf
oli
neI
nvest
mentSer
vicesLi
mit
ed

Consol
i
dat
edshar
ehol
dingsofal
lthesubsi
diar
ycompani
esengagedi
nloansand

f
inanci
ngact
ivi
ti
esunderonesubsi
diar
y.Recent
ly,Or
ientGl
obal
,aSi
ngapor
e-based

i
nvest
menti
nst
it
uti
oni
nvest
edUSD 76.
7mi
l
li
onf
ora22.
5% st
akei
nIndi
aInf
oli
ne

I
nvest
mentSer
vices.Thi
swi
l
lhel
pfocusedex
pansi
onandcapi
talr
aisi
ngi
nthesai
d

subsi
diar
iesf
orv
ari
ousl
endi
ngbusi
nessesl
i
kel
oansagai
nstsecur
it
ies,
SMEf
inanci
ng,

di
str
ibut
ionofr
etai
lloanpr
oduct
s,consumerf
inancebusi
nessandhousi
ngf
inance

busi
ness.I
ndi
aInf
oli
neI
nvest
mentSer
vicesPr
ivat
eLi
mit
edconsi
stsoft
hef
oll
owi
ng
st
ep-
downsubsi
diar
ies.

 I
ndi
aInf
oli
neDi
str
ibut
ionCompanyLi
mit
ed(
dist
ri
but
ionofr
etai
ll
oanpr
oduct
s)

 Money
li
neCr
edi
tLi
mit
ed(
consumerf
inance)

 I
ndi
aInf
oli
neHousi
ngFi
nanceLi
mit
ed(
housi
ngf
inance)

I
IFL(
Asi
a)Pr
ivat
eLi
mit
ed

I
IFL(
Asi
a)Pr
ivat
eLi
mit
edi
swhol
l
yownedsubsi
diar
ywhi
chhasbeeni
ncor
por
atedi
n

Si
ngapor
eto pur
sue f
inanci
alsect
oract
ivi
ti
es i
n ot
herAsi
an mar
ket
s.Fur
thert
o

obt
aini
ngt
henecessar
yregul
ator
yappr
oval
s,t
hecompanyhasbeeni
nit
ial
l
ycapi
tal
i
zed

at1mi
l
li
onSi
ngapor
edol
l
ars.
I
IFLMANAGEMENT

 THEMANAGEMENTTEAM

Mr
.Ni
rmal
Jai
n,Chai
rman&Managi
ngDi
rect
or

Ni
rmalJai
n,MBA(
II
M,Ahmadabad)andaChar
ter
edandCost

Account
ant
,foundedI
ndi
a’
sleadi
ngf
inanci
alser
vicescompany I
ndi
a

I
nfol
i
ne Lt
d.i
n 1995,pr
ovi
ding gl
obal
l
y accl
aimed f
inanci
al

ser
vices i
n equi
ti
es and commodi
ti
es br
oki
ng,l
i
fei
nsur
ance and mut
ualf
unds

di
str
ibut
ion,
amongot
her
s.

Mr
.RVenkat
araman,
Execut
iveDi
rect
or

RVenkat
araman,co-
promot
erandExecut
iveDi
rect
orofI
ndi
a

I
nfol
i
ne Lt
d.,i
s a B. Tech (
Elect
roni
cs and El
ect
ri
cal

Communi
cat
ionsEngi
neer
ing,I
ITKhar
agpur
)andanMBA(
II
M

Bangal
ore)
.Hej
oinedt
heI
ndi
aInf
oli
neboar
dinJul
y1999.

 THEBOARDOFDI
RECTORS

Apar
tfr
om Ni
rmal
Jai
nandRVenkat
araman,
theBoar
dofDi
rect
orsofI
ndi
aInf
oli
neLt
d.

compr
ises:

Mr
.Ni
l
eshVi
kamsey
,IndependentDi
rect
or

Mr
.Vi
kamsey
,Boar
dmembersi
nceFebr
uar
y2005-apr
act
ici
ng

Char
ter
ed Account
antand par
tner(
Khi
mjiKunv
erj
i& Co.
,

Char
ter
edAccount
ant
s),amemberf
ir
m ofHLBI
nter
nat
ional
,

headedt
heaudi
tdepar
tmentt
il
l1990andt
her
eaf
teral
sohandl
esf
inanci
alser
vices,
consul
tancy
,inv
est
igat
ions,
mer
ger
sandacqui
sit
ions,
val
uat
ionset
c

MrSatPal
Khat
tar
,NonExecut
iveDi
rect
or

MrSatPalKhat
tar
,-Boar
d membersi
nce Apr
il2001 -

Pr
esi
dent
ial
Counci
lofMi
nor
it
yRi
ght
smember
,Chai
rmanoft
he Boar
d

ofTr
ust
ee ofSi
ngapor
e Busi
ness Feder
ati
on,i
s al
so a l
i
fe

t
rust
eeofSI
NDA,anonpr
ofi
tbody
,hel
pingt
heunder
-pr
ivi
l
egedI
ndi
ansi
nSi
ngapor
e.

Hej
oinedt
heI
ndi
aInf
oli
neboar
dinApr
il2001.

MrKr
ant
iSi
nha,
IndependentDi
rect
or

Mr
.Kr
ant
iSi
nha — Boar
d membersi
nce Januar
y 2005 —

compl
etedhi
smast
ersf
rom t
heAgr
aUni
ver
sit
yandst
art
edhi
s car
eer

asaCl
assIof
fi
cerwi
thLi
feI
nsur
anceCor
por
ati
onofI
ndi
a.

MrAr
unK.Pur
var
,IndependentDi
rect
or

Mr
.A.
K.Pur
var–Boar
dmembersi
nceMar
ch2008–compl
eted hi
s

Mast
ersdegr
eei
ncommer
cef
rom Al
l
ahabadUni
ver
sit
yin1966 anda

di
plomai
nBusi
nessAdmi
nist
rat
ioni
n1967.

PRODUCTS&SERVI
CES
Equi
ti
es

I
ndi
aInf
oli
nepr
ovi
dedt
hepr
ospectofr
esear
chedi
nvest
ingt
oit
scl
i
ent
s,whi
chwas

hi
ther
tor
est
ri
ctedonl
ytot
hei
nst
it
uti
ons.Resear
chf
ort
her
etai
linv
est
ordi
dnotexi
st

pr
iort
oIndi
aInf
oli
ne.I
ndi
aInf
oli
nel
ever
agedt
echnol
ogyt
obr
ingt
heconv
eni
enceof

t
radi
ng t
othe i
nvest
or’
slocat
ion of pr
efer
ence (
resi
dence or of
fi
ce) t
hrough

comput
eri
zedaccess.I
ndi
aInf
oli
nemadei
tpossi
blef
orcl
i
ent
stov
iew t
ransact
ion

cost
sand l
edgerupdat
esi
nrealt
ime.TheCompanyi
samong t
hef
ew f
inanci
al

i
nter
medi
ari
es i
nIndi
ato of
fera compl
ementofonl
i
ne and of
fl
ine br
oki
ng.The

Compani
esnet
wor
kofbr
anchesal
soal
l
owscust
omer
stopl
aceor
der
sonphoneor

v
isi
tourbr
anchesf
ort
radi
ng.

Commodi
ti
es

I
ndi
aInf
oli
ne’
sext
ensi
oni
ntocommodi
ti
est
radi
ngr
econci
l
esi
tsst
rat
egi
cint
entt
o

emer
geasaonest
opsol
uti
onsf
inanci
ali
nter
medi
ary
.It
sexper
iencei
nsecur
it
ies

br
oki
ng has empower
ed i
twi
thr
equi
sit
e ski
l
ls and t
echnol
ogi
es.The Compani
es

commodi
ti
esbusi
nesspr
ovi
desacont
ra-
cycl
i
calal
ter
nat
ivet
oequi
ti
esbr
oki
ng.The

Companywasamongt
hef
ir
stt
oof
fert
hef
aci
l
ityofcommodi
ti
est
radi
ngi
nIndi
a’
s

y
oung commodi
ti
es mar
ket(
the MCX commenced oper
ati
ons i
n 2003)
.Av
erage

mont
hlyt
urnov
eront
hecommodi
tyexchangesi
ncr
easedf
rom Rs0.
34bnt
oRs20.
02

bn.

I
nsur
ance
Anent
ryi
ntot
hissegmenthel
pedcompl
etet
hecl
i
ent
'spr
oductbasket
;concur
rent
ly,i
t

gr
aduat
edt
heCompanyi
ntoaonest
opr
etai
lfi
nanci
alsol
uti
onspr
ovi
der
.Toensur
e

maxi
mum r
eacht
ocust
omer
sacr
ossI
ndi
a,i
thasempl
oyedamul
tipr
ongedappr
oach

andr
eachesoutt
ocust
omer
svi
aourNet
wor
k,Di
rectandAf
fi
li
atechannel
s.I
ndi
a

I
nfol
i
newast
hef
ir
stcor
por
atei
nIndi
atogett
heagencyl
i
censei
near
ly2001.

I
nvestOnl
i
ne

I
ndi
aInf
oli
nehasmadei
nvest
ingi
nMut
ual
fundsandpr
imar
ymar
ketsoef
for
tl
ess.Onl
y

r
egi
str
ati
oni
sneeded.Nopaper
wor
knoqueuesandNor
egi
str
ati
onchar
ges.I
ndi
a

I
nfol
i
neof
fer
sahostofmut
ualf
undchoi
cesunderoner
oof
,backedbyi
n-dept
h

r
esear
chandadv
icef
rom r
esear
chhouseandt
ool
sconf
igur
edasi
nvest
orf
ri
endl
y.

Weal
thManagement

Thekeyt
oachi
evi
ngasuccessf
ulI
nvest
mentPor
tfol
i
oist
ohav
eacar
eful
l
ypl
anned

f
inanci
alst
rat
egybasedonat
hor
oughunder
standi
ngoft
hecl
i
ent
'si
nvest
mentneeds

andr
iskappet
it
e.TheI
IFLPr
ivat
eWeal
thManagementTeam off
inanci
alexper
tswi
l
l

r
ecommendanappr
opr
iat
efi
nanci
alst
rat
egyt
oef
fect
ivel
ymeetcust
omer
’si
nvest
ment

r
equi
rement
s.

AssetManagement
I
ndi
aInf
oli
nei
sal
eadi
ngpan-
Indi
amut
ualf
unddi
str
ibut
ionhouseassoci
atedwi
th

l
eadi
ng assetmanagementcompani
es.I
toper
atespr
imar
il
yint
her
etai
lsegment

l
ever
agi
ngi
tsexi
sti
ngdi
str
ibut
ionnet
wor
ktor
eachpr
ospect
ivecl
i
ent
s.I
thasr
ecei
ved

t
hei
n-pr
inci
pleappr
oval
tosetupamut
ual
fund.

Por
tfol
i
oManagement

I
IFLPor
tfol
i
oManagementSer
vicei
sapr
oductwher
einanequi
tyi
nvest
mentpor
tfol
i
o

i
scr
eat
edt
osui
tthei
nvest
mentobj
ect
ivesofacl
i
ent
.Indi
aInf
oli
nei
nvest
sthecl
i
ent
’s

r
esour
cesi
ntost
ocksf
rom di
ff
erentsect
ors,dependi
ngoncl
i
ent
’sr
isk-
ret
urnpr
ofi
l
e.

Thi
sser
vicei
spar
ti
cul
arl
yadv
isabl
efori
nvest
orswhocannotaf
for
dtogi
vet
imeor

don'
thav
ethatexper
ti
sef
orday
-to-
daymanagementoft
hei
requi
typor
tfol
i
o.

Newsl
ett
ers

Asasubscr
ibert
otheDai
l
yMar
ketSt
rat
egy
,cl
i
ent
’sgetr
esear
chr
epor
tsofI
ndi
a

I
nfol
i
ner
esear
cht
eam onapr
ior
it
ybasi
s.TheI
ndi
ainf
oli
neWeekl
yNewsl
ett
eri
sthe

f
lashbackf
ort
heweekgoneby
.Aweekl
yout
lookcoupl
edwi
tht
hebestoft
heweb

st
ori
esf
rom I
ndi
ainf
oli
neandl
i
nkst
oimpor
tanti
nvest
menti
deas,LeaderSpeakand

f
eat
uresi
sdel
i
ver
edi
nthecl
i
ent
’si
nboxev
eryFr
idayev
eni
ng.
 CHAPTERV

DATAANALYSI
S&I
NTERPRETATI
ONS
ANALYSI
SOFAUTOMOBI
LEI
NDUSTRY

Ov
eraper
iodofmor
ethant
wodecadest
heI
ndi
anAut
omobi
l
eindust
ryhasbeen

dr
ivi
ngi
tsowngr
owt
hthr
oughphases.Wi
thcompar
ati
vel
yhi
gherr
ateofeconomi
c

gr
owt
hrat
eindexagai
nstt
hatofgr
eatgl
obalpower
s,I
ndi
ahasbecomeahubof

domest
icandexpor
tsbusi
ness.Theaut
omobi
l
esect
orhasbeencont
ri
but
ingi
tsshar
e

t
otheshi
ningeconomi
cper
for
manceofI
ndi
aint
her
ecenty
ear
s.

Tounder
standt
hisi
ndust
ryf
ort
hepur
poseofi
nvest
mentweneedt
oanal
yzei
tbyt
he

f
oll
owi
ngappr
oach:

Fundament
alAnal
ysi
s(E.
I.
CAppr
oach)

a.Economyanal
ysi
s

b.I
ndust
ryanal
ysi
s

c.Companyanal
ysi
s

Fundament
alAnal
ysi
s

Fundament
alanal
ysi
sist
hest
udyofeconomi
c,i
ndust
ryandcompanycondi
ti
onsi
nan

ef
for
ttodet
ermi
net
hev
alueofacompanysst
ock.Fundament
alanal
ysi
sty
pical
l
y

f
ocusesonkeyst
ati
sti
csi
ncompanysf
inanci
alst
atement
stodet
ermi
nei
fthest
ock

pr
icei
scor
rect
lyv
alued.

Mostf
undament
ali
nfor
mat
ionf
ocusesoneconomi
c,i
ndust
ryandcompanyst
ati
sti
cs.

Thet
ypi
cal
appr
oacht
oanal
yzi
ngacompanyi
nvol
vest
hreebasi
cst
eps:

1.Det
ermi
net
hecondi
ti
onoft
hegener
aleconomy
.
2.Det
ermi
net
hecondi
ti
onoft
hei
ndust
ry.

3.Det
ermi
net
hecondi
ti
onoft
hecompany
.

1.ECONOMYANALYSI
S

Economi
canal
ysi
sist
heanal
ysi
soff
orcesoper
ati
ngt
heov
eral
leconomyacount
ry.

Economi
canal
ysi
sisapr
ocesswher
ebyst
rengt
hsandweaknessesofaneconomyar
e

anal
yzed.Economi
canal
ysi
sisi
mpor
tanti
nor
dert
ounder
standexactcondi
ti
onofan

economy
.

GDPandAut
omobi
l
eIndust
ry

I
nabsol
utet
erms,
Indi
a i
s16t
h i
nthewor
ldi
n t
erms

ofnomi
nalf
act
oryout
put
.Theser
vicesect
or i
s

gr
owi
ngr
api
dlyi
nthepastf
ewy
ear
s.Thi
sis t
hepi
e

-char
tshowi
ng cont
ri
but
ions ofdi
ff
erent

sect
orsi
nIndi
aneconomy
.

Today
,aut
omobi
l
esect
ori
nIndi
aisoneoft
hekeysect
orsoft
heeconomyi
nter
msof
t
heempl
oyment
.Di
rect
lyandi
ndi
rect
lyi
templ
oysmor
ethan10mi
l
li
onpeopl
eandi
fwe

addt
henumberofpeopl
eempl
oyedi
ntheaut
o-componentandaut
oanci
l
lar
yindust
ry

t
hent
henumbergoesev
enhi
gher
.

Ast
hewor
ldeconomysl
i
ppedi
ntor
ecessi
onhi
tt
ingt
hedemandhar
dandt
hebanki
ng

sect
ort
akesconser
vat
iveappr
oach t
owar
dsl
endi
ng t
o cor
por
atesect
or,t
heGDP

gr
owt
hhasdowngr
adedi
tto7.
1percentf
or2008-
09andi
thasi
ncr
easedt
o8.
6%i
n

2010byov
ercomi
ngt
heset
backsofr
ecessi
on.

Recessi
on

Aut
oindust
ryi
nIndi
ahadbeenhi
thar
dbyongoi
nggl
obal
financi
alr
ecessi
on.Buti
tisi
n

agoodshapenow.Muchoft
hisopt
imi
sm r
esul
tedf
rom r
enewedi
nter
estbei
ngshown

i
nIndi
aaut
oindust
rybyr
eput
edov
erseascarmaker
s.Ni
ssanMot
orswhi
chi
sawel
l

knownJapanesecarmaki
ngcompanyr
egar
dedI
ndi
aaut
omobi
l
emar
ketasagl
obal
car

manuf
act
uri
nghubf
orf
utur
eandi
nvest
edhugeamounti
nourmar
ket
.Ther
ear
esome

ot
heraut
omobi
l
ecompani
esofwor
ldwhohav
eshowni
nter
esti
nIndi
aaut
omar
ket
.

Maj
ornamesamongt
hesear
eGener
alMot
ors,
SkodaAut
oandMer
cedes-
Benz.These

compani
eshav
emaj
orpl
ansl
i
nedupf
orI
ndi
aaut
oindust
ry.Thesear
efewsi
gnsoft
he

r
evol
uti
oni
zedaut
oindust
ryaf
terr
ecessi
on.

I
nfl
ati
on
Ther
isei
ninf
lat
ionwi
l
lhav
eadv
ersei
mpactont
hei
ndust
ryt
hatwi
l
lnotonl
ysee

i
nter
estr
atesget
ti
ngf
urt
herhar
denedbutal
soadr
opi
ndemandduet
othesqueezei
n

pur
chasi
ngpower
.Theef
fectofi
nfl
ati
onhasaf
fect
edev
erysect
orwhi
chi
srel
atedt
o

carmanuf
act
uri
ngandpr
oduct
ion.Thei
ncr
easei
nthepr
iceoff
uelandt
hest
eelduet
o

i
nfl
ati
onhasl
edt
oasl
owergr
owt
hrat
eoft
hecari
ndust
ryi
nIndi
a.

For
eignDi
rectI
nvest
ment

Theaut
omobi
l
esect
ori
ntheI
ndi
ani
ndust
ryi
soneoft
hehi
ghper
for
mingsect
orsoft
he

I
ndi
aneconomy
.Thi
shascont
ri
but
edl
argel
yinmaki
ngI
ndi
aapr
imedest
inat
ionf
or

many i
nter
nat
ionalpl
ayer
sint
he aut
omobi
l
eindust
ry who wi
sh t
o setup t
hei
r

busi
nessesi
nIndi
a.Aut
omat
icappr
ovalf
orf
orei
gnequi
tyi
nvest
mentupt
o100per

centofmanuf
act
ureofaut
omobi
l
esandcomponenti
sper
mit
ted.

Expor
ts

Despi
ter
ecessi
on,
theI
ndi
anaut
omobi
l
emar
ketcont
inuest
oper
for
m bet
tert
hanmost

oft
heot
heri
ndust
ri
esi
ntheeconomyi
ncomi
ngf
utur
e;mor
eandmor
eMNC’
scomi
ng

i
nIndi
atoset
upt
hei
rvent
ureswhi
chcl
ear
lyshowst
hescopeofexpansi
on.Dur
ingApr
il

-
Januar
y2010,
over
all
aut
omobi
l
eexpor
tsr
egi
ster
edagr
owt
hrat
eof13.
24per
cent
.
2.I
NDUSTRYANALYSI
S(AUTOMOBI
LE)

Theaut
omobi
l
eindust
ryi
nIndi
aist
heni
nthl
argesti
nthewor
ld wi
th an annual

pr
oduct
ionofov
er2.
3mi
l
li
onuni
tsi
n2008.I
n2009,I
ndi
aemer
gedasAsi
a'
sfour
th

l
argestexpor
terofaut
omobi
l
es,behi
nd Japan,Sout
h Kor
ea and Thai
l
and.The

Aut
omobi
l
eIndust
ryi
soneoft
hef
ast
estgr
owi
ngsect
orsi
nIndi
a.Thei
ncr
easei
nthe

demandf
orcar
s,andot
herv
ehi
cles,power
edbyt
hei
ncr
easei
nthei
ncomei
sthe

pr
imar
ygr
owt
hdr
iveroft
heaut
omobi
l
eindust
ryi
nIndi
a.I
n2009,est
imat
edr
ateof

gr
owt
hofI
ndi
aAut
oindust
ryi
sgoi
ngt
obe9%.
TheI
ndi
anaut
omobi
l
esect
ori
sfarf
rom

bei
ngsat
urat
ed,
leav
ingampl
eoppor
tuni
tyf
orv
olumegr
owt
h.

Segment
ati
onofAut
omobi
l
eIndust
ry

The aut
omobi
l
e i
ndust
ry compr
ises of

Heav
yvehi
cl
es (
trucks,buses,t
empos,

t
ract
ors)
;passengercar
s;Two-
wheel
ers;

Commer
cialVehi
cl
es;andThr
ee-
wheel
ers.

Fol
l
owi
ng i
sthe segment
ati
on t
hathow

mucheachsect
orcompr
isesofwhol
eIndi
anAut
omobi
l
eIndust
ry.

I
ndust
ryl
i
fecy
cle

Thei
ndust
ri
all
i
fecy
clei
sat
erm usedf
orcl
assi
fyi
ngi
ndust
ryl
i
feov
ert
ime.I
ndust
ryl
i
fe

cy
clecl
assi
fi
cat
iongener
all
ygr
oupsi
ndust
ri
esi
ntooneoff
ourst
ages:pi
oneer
,gr
owt
h,

mat
uri
tyanddecl
i
ne.I
nthepi
oneerphase,
thepr
oducthasnotbeenwi
del
yaccept
edor

adopt
ed.Busi
nessst
rat
egi
esar
edev
elopi
ng,andt
her
eishi
ghr
iskoff
ail
ure.Howev
er,

successf
ulcompani
escangr
ow atext
raor
dinar
yrat
es.TheI
ndi
anaut
omobi
l
esect
or
haspassedt
hisst
agequi
tesuccessf
ull
y.Thei
ndust
ryi
sgr
owi
ngr
api
dly
,of
tenatan

accel
erat
ingr
ateofsal
esandear
ningsgr h.I
owt ndi
anAut
omot
iveI
ndust
ryi
sboomi
ng

wi
thagr
owt
hrat
eofar
ound15%annual
l
y.Thegr
owt
hrat
eoft
heaut
omobi
l
eindust
ry

i
nIndi
aisgr
eat
ert
hant
heGDPgr
owt
hrat
eoft
heeconomy
,sot
heaut
omobi
l
esect
or

canbev
erywel
lbesai
dtobei
nthegr
owt
hphase.

Swotanal
ysi
s:

Ascanoft
hei
nter
nalandext
ernalenv
ironmenti
sani
mpor
tantpar
toft
hest
rat
egi
c

pl
anni
ngpr
ocess.Env
ironment
alf
act
orsi
nter
nalt
othef
ir
m usual
l
ycanbecl
assi
fi
edas

st
rengt
hs(
S)orweaknesses(
W),andt
hoseex
ter
nalt
othef
ir
m canbecl
assi
fi
edas

oppor
tuni
ti
es(
O)ort
hreat
s(T)
.Such an anal
ysi
soft
hest
rat
egi
cenv
ironmenti
s

r
efer
redt
oasaSWOTanal
ysi
s.SWOTanal
ysi
soft
heI
ndi
anaut
omobi
l
esect
orgi
ves

t
hef
oll
owi
ngpoi
nts:

1.St
rengt
hs

 Lar
gedomest
icmar
ket

 Sust
ainabl
elaborcostadv
ant
age

 Compet
it
iveaut
ocomponentv
endorbase

 Gov
ernmenti
ncent
ivesf
ormanuf
act
uri
ngpl
ant
s

 St
rongengi
neer
ingski
l
lsi
ndesi
gnet
c

2.Weaknesses

 Lowl
aborpr
oduct
ivi
ty
  Hi
ghi
nter
estcost
sandhi
ghov
erheadsmaket
hepr
oduct
ionuncompet
it
ive

 Var
iousf
ormsoft
axespushupt
hecostofpr
oduct
ion

 Lowi
nvest
menti
nResear
chandDev
elopment

 I
nfr
ast
ruct
urebot
tl
eneck

3.Oppor
tuni
ti
es

 I
ncr
easi
ngchal
l
engesi
nconsumerdemands,
technol
ogydev
elopment
,and

gl
obal
i
zat
ion.

 Heav
ythr
ustonmi
ningandconst
ruct
ionact
ivi
ty

 I
ncr
easei
nthei
ncomel
evel

 Cuti
nexci
sedut
ies

4.Thr
eat
s

 I
gnor
anceofResear
ch&dev
elopment

 Ri
singi
nter
estr
ates

 Cutt
hroatcompet
it
ion

3.COMPANYANALYSI
S

Thecompanyanal
ysi
sshowst
hel
ong-
ter
m st
renghtoft
hecompanyt
hatwhati
sthe

f
inanci
alposi
ti
onoft
hecompanyi
nthemar
ket
,wher
eitst
andsamongi
tscompet
it
ors

andwhoar
ethekeydr
iver
soft
hecompany
,whatar
ethef
utur
epl
ansoft
hecompany
,

whatar
ethepol
i
ciesofgov
ernmentt
owar
dst
hecompanyandhow t
hest
akeoft
he

companydi
vest
edamongdi
ff
erentgr
oupsofpeopl
e.
Her
e,Ihav
etakent
hreecompani
esnamel
yTATAMot
ors,Mar
utiSuzukiandMahi
ndr
a

andMahi
ndr
afort
hepur
poseoff
undament
alanal
ysi
s.

Tat
aMot
orsLi
mit
edi
sIndi
a'
slar
gestaut
omobi
l
ecompany
,wi
thconsol
i
dat
edr
evenues

ofRs.92,
519cr
ores(
USD20bi
l
li
on)i
n2009-
10.I
tist
hel
eaderi
ncommer
cialv
ehi
cles

i
neachsegment
,andamongt
het
opt
hreei
npassengerv
ehi
cleswi
thwi
nni
ngpr
oduct
s

i
nthecompact
,mi
dsi
zecarandut
il
it
yvehi
clesegment
s.Thecompanyi
sthewor
ld'
s

f
our
thl
argestt
ruckmanuf
act
urer
,andt
hewor
ld'
ssecondl
argestbusmanuf
act
urer
.

Mar
utiSuzukii
sasubsi
diar
yofSuzukiMot
orCor
por
ati
onJapan.Mor
ethanhal
fthe

number
sofcar
ssol
dinI
ndi
awearMar
utiSuzukibadge.Theyof
feraf
ullr
angeofcar
s

–f
rom ent
ryl
evelMar
uti800&Al
tot
ost
yli
shhat
chbackRi
tz,Ast
ar,Swi
ft
,WagonR,

Est
il
loandsedansDzi
re,SX4andSpor
tsUt
il
it
yVehi
cleGr
andVi
tar
a.Si
ncei
ncept
ion,i
t

haspr
oducedandsol
dov
er7.
5mi
l
li
onv
ehi
clesi
nIndi
aandexpor
tedov
er500,
000uni
ts

t
oEur
opeandot
hercount
ri
es.I
tst
urnov
erf
ort
hef
iscal2008-
09st
oodatRs.203,
583

Mi
l
li
on&Pr
ofi
taf
terTaxatRs.12,
187Mi
l
li
on.
TheMahi
ndr
aGr
oup’
sAut
omot
iveSect
ori
sint
hebusi
nessofmanuf
act
uri
ngand

mar
ket
ingut
il
it
yvehi
cl
esandl
i
ghtcommer
cialv
ehi
cles,i
ncl
udi
ngt
hree-
wheel
ers.I
tis

t
hemar
ketl
eaderi
nut
il
it
yvehi
clesi
nIndi
asi
ncei
ncept
ion,andcur
rent
lyaccount
sfor

abouthal
fofI
ndi
a’
smar
ketf
orut
il
it
yvehi
cles.TheAut
omot
iveSect
orcont
inuest
obea

l
eaderi
ntheut
il
it
yvehi
clesegmentwi
thadi
ver
sepor
tfol
i
othati
ncl
udesmasst
ranspor
t

aswel
lasnewgener
ati
onv
ehi
clesl
i
keScor
pio,
Bol
eroandt
her
ecent
lyl
aunchedXy
lo.
TATAMOTORS-Bal
ancesheet
Bal
anceSheetofTat
a
Motor
s  
  Mar'
05 Mar'
06 Mar'
07 Mar'
08 Mar'
09
Sour
cesoff
unds        
Tot
alShar
eCapi
tal 361.
79 382.
87 385.
41 385.
54 514.
05
Equi
tyShar
eCapi
tal 361.
79 382.
87 385.
41 385.
54 514.
05
ShareAppl
i
cat
ionMoney 0.
00 0.
00 0.
00 0.
00 0.
00
Reserv
es 3,
749.
60 5,
127.
81 6,
458.
39 7,
428.
45 11,
855.
15
Rev
aluati
onReser
ves 0.
00 26.
39 25.
95 25.
51 25.
07
Net
wor t
h 4,
111.
39 5,
537.
07 6,
869.
75 7,
839.
50 12,
394.
27
Secur
edLoans 489.
81 822.
76 2,
022.
04 2,
461.
99 5,
251.
65
Unsecur
edLoans 2,
005.
61 2,
114.
08 1,
987.
10 3,
818.
53 7,
913.
91
Tot
alDebt 2,
495.
42 2,
936.
84 4,
009.
14 6,
280.
52 13,
165.
56
Tot
alLi
abi
l
iti
es 6,
606.
81 8,
473.
91 10,
878.
89 14,
120.
02 25,
559.
83

Appl
i
cat
ionoff
unds        
Gr
ossBl
ock 6,
611.
95 7,
971.
55 8,
775.
80 10,
830.
83 13,
905.
17
Less:
Accum.Depr
eci
ati
on 3,
454.
28 4,
401.
51 4,
894.
54 5,
443.
52 6,
259.
90
NetBlock 3,
157.
67 3,
570.
04 3,
881.
26 5,
387.
31 7,
645.
27
Capi
tal
Wor
kinPr
ogr
ess 538.
84 951.
19 2,
513.
32 5,
064.
96 6,
954.
04

I
nvest
ment
s 2,
912.
06 2,
015.
15 2,
477.
00 4,
910.
27 12,
968.
13
I
nvent
ori
es 1,
601.
36 2,
012.
24 2,
500.
95 2,
421.
83 2,
229.
81

Sundr
yDebt
ors 811.
32 715.
78 782.
18 1,
130.
73 1,
555.
20

CashandBankBal
ance 345.
26 327.
66 535.
78 750.
14 638.
17

Tot
alCur
rentAsset
s 2,
757.
94 3,
055.
68 3,
818.
91 4,
302.
70 4,
423.
18
LoansandAdv
ances 2,
831.
16 5,
964.
61 6,
208.
53 4,
831.
36 5,
909.
75
Fi
xedDeposit
s 1,
659.
78 791.
77 290.
98 1,647.
17 503.
65
Tot
alCA,Loans&Adv
ances 7,
248.
88 9,
812.
06 10,
318.
42 10,
781.
23 10,
836.
58
Def
fer
edCr
edi
t 0.
00 0.
00 0.
00 0.
00 0.
00
Cur
rentLi
abi
l
iti
es 6,
142.
74 6,
673.
61 6,
956.
88 10,
040.
37 10,
968.
95
Pr
ovi
sions 1,
126.
06 1,
215.
04 1,
364.
32 1,
989.
43 1,
877.
26
Tot
alCL&Pr
ovi
sions 7,
268.
80 7,
888.
65 8,
321.
20 12,
029.
80 12,
846.
21
NetCur
rentAsset
s -
19.
92 1,
923.
41 1,
997.
22 -
1,248.
57 -
2,009.
63

Total
Assets 6,
606.
81 8,
473.
91 10,
878.
89 14,
120.
02 25,
559.
83
Conti
ngentLi
abi
l
iti
es 1,
450.
32 2,
185.
63 5,
196.
07 5,590.
83 5,433.
07
BookVal
ue(
Rs) 113.
65 143.
94 177.
59 202.
70 240.
64
TATAMOTORS–Pr
ofi
t&Lossaccount

Pr
ofit&LossaccountofTat
a
Motors  
  Mar'
05 Mar'
06 Mar'
07 Mar'
08 Mar'
09
I
ncome        
Sal
esTur
nov
er 20,
262.
61 23,
490.
55 31,
089.
69 33,
123.
54 28,
538.
20
Exci
seDut
y 3,
063.
44 3,401.
92 4,425.
44 4,355.
63 2,877.
53
NetSal
es 17,
199.
17 20,
088.
63 26,
664.
25 28,
767.
91 25,
660.
67
Ot
herI
ncome 403.
98 852.
41 1,114.
38 734.
17 921.
29
StockAdjust
ment
s 144.
00 256.
91 349.
68 -
40.
48 -
238.
04
TotalI
ncome 17,
747.
15 21,
197.
95 28,
128.
31 29,
461.
60 26,
343.
92
Expendi
tur
e        
RawMat er
ial
s 12,
245.
28 14,
633.
02 19,
879.
56 20,
891.
33 18,
801.
37
Power&Fuel Cost 237.
81 258.
51 327.
41 325.
19 304.
94
Employ
eeCost 1,
039.
34 1,143.
13 1,367.
83 1,544.
57 1,551.
39
Ot
herManuf
act
uri
ngExpenses 592.
64 671.
31 872.
95 904.
95 866.
65
Sel
l
ingandAdmi
nExpenses 890.
21 1,
061.
07 1,
505.
23 2,
197.
49 1,
652.
31
Mi
scel
l
aneousExpenses 620.
27 740.
99 1,
051.
49 964.
78 1,
438.
89
Preoperat
iveExpCapi
tal
i
sed -
282.
43 -
308.
85 -
577.
05 -1,
131.
40 -
916.
02
TotalExpenses 15,
343.
12 18,
199.
18 24,
427.
42 25,
696.
91 23,
699.
53
Oper
ati
ngPr
ofi
t 2,
000.
05 2,
146.
36 2,
586.
51 3,
030.
52 1,
723.
10
PBDI
T 2,
404.
03 2,
998.
77 3,
700.
89 3,
764.
69 2,
644.
39
I
nter
est 234.
30 350.
24 455.
75 471.
56 704.
92
PBDT 2,
169.
73 2,
648.
53 3,
245.
14 3,
293.
13 1,
939.
47
Depreci
ati
on 450.
16 520.
94 586.
29 652.
31 874.
54
OtherWrit
tenOf
f 67.
12 73.
78 85.
02 64.
35 51.
17
Prof
itBeforeTax 1,
652.45 2,
053.
81 2,
573.83 2,
576.
47 1,
013.
76
Extr
a-or
dinaryi
tems -
1.54 0.
00 -
0.07 0.
00 15.
29
PBT(PostExt
ra-
ordI
tems) 1,
650.
91 2,
053.
81 2,
573.
76 2,
576.
47 1,
029.
05
Tax 415.
50 524.
93 660.
37 547.
55 12.
50
Report
edNetProf
it 1,
236.
95 1,
528.
88 1,
913.
46 2,
028.
92 1,
001.
26
Total
ValueAddi
ti
on 3,
097.
84 3,
566.
16 4,
547.
86 4,
805.
58 4,
898.
16
PreferenceDi vi
dend 0.
00 0.
00 0.
00 0.
00 0.
00
EquityDividend 452.
19 497.
94 578.
07 578.
43 311.
61
Corpor at
eDi vi
dendTax 63.
42 69.
84 98.
25 81.
25 34.
09
Pershar edat a(annual
ised)        
Sharesi nissue(lakhs) 3,
617.
52 3,
828.
34 3,
853.
74 3,
855.
04 5,
140.
08
EarningPerShar e(Rs) 34.
19 39.
94 49.
65 52.
63 19.
48
EquityDividend( %) 125.
00 130.
00 150.
00 150.
00 60.
00
BookVal ue( Rs) 113.
65 143.
94 177.
59 202.
70 240.
64
MARUTISUZUKI–Bal
anceSheet

BalanceSheetofMar
uti
SuzukiIndi
a  
  Mar'05 Mar'
06 Mar'
07 Mar'
08 Mar'
09
SourcesOfFunds        
TotalShar
eCapital 144.
50 144.
50 144.
50 144.
50 144.
50
Equit
yShareCapital 144.
50 144.
50 144.
50 144.
50 144.
50
ShareAppli
cat
ionMoney 0.
00 0.
00 0.
00 0.
00 0.
00
Reser
ves 4,
234.
30 5,
308.
10 6,
709.
40 8,
270.
90 9,
200.
40
Reval
uati
onReser
ves 0.
00 0.
00 0.
00 0.
00 0.
00
Networt
h 4,
378.
80 5,
452.
60 6,
853.
90 8,
415.
40 9,
344.
90
Secur
edLoans 307.
60 71.
70 63.
50 0.
10 0.
10
Unsecur
edLoans 0.
00 0.
00 567.
30 900.
10 698.
80
Tot
alDebt 307.
60 71.
70 630.80 900.
20 698.
90
Tot
alLi
abi
li
ti
es 4,
686.
40 5,
524.
30 7,
484.
70 9,
315.
60 10,
043.
80
Appl
i
cat
ionOfFunds        
GrossBlock 5,
053.
10 4,
954.
60 6,
146.
80 7,
285.
30 8,
720.
60
Less:Accum.Depreci
ati
on 3,
179.
40 3,
259.
40 3,
487.
10 3,
988.
80 4,
649.
80
NetBlock 1,
873.
70 1,
695.
20 2,
659.
70 3,
296.
50 4,
070.
80
Capit
alWor ki
nProgress 42.
10 92.
00 238.
90 736.
30 861.
30
Inv
estments 1,
516.
60 2,
051.
20 3,
409.
20 5,
180.
70 3,
173.
30
Inv
entori
es 666.
60 881.
20 713.
20 1,
038.
00 902.
30
SundryDebtor
s 599.
50 654.
80 747.
40 655.
50 918.
90
CashandBankBal ance 79.
40 51.
60 114.
80 324.
00 239.
00
TotalCurr
entAssets 1,
345.
50 1,
587.
60 1,
575.
40 2,
017.
50 2,
060.
20
LoansandAdv ances 801.
90 933.
10 1,
072.
60 1,
173.
00 1,
809.
80
Fi
xedDeposi ts 950.
00 1,
350.
00 1,
308.
00 0.
00 1,
700.
00
Total CA,Loans&Adv ances 3,
097.
40 3,
870.
70 3,
956.
00 3,
190.
50 5,
570.
00
DefferedCr edit 0.
00 0.
00 0.
00 0.
00 0.
00
CurrentLiabili
ti
es 1,
454.
20 1,
704.
80 2,
288.
60 2,
718.
90 3,
250.
90
Provisions 389.
20 480.
00 490.
50 369.
50 380.
70
Total CL&Pr ov i
sions 1,
843.
40 2,
184.
80 2,
779.
10 3,
088.
40 3,
631.
60
NetCur r
entAsset s 1,
254.
00 1,
685.
90 1,
176.
90 102.
10 1,
938.
40
Miscel l
aneousExpenses 0.
00 0.
00 0.
00 0.
00 0.
00
Total
Assets 4,
686.
40 5,
524.
30 7,
484.
70 9,
315.
60 10,
043.
80
Conti
ngentLi
abi
li
ti
es 893.
60 1,
289.
70 2,
094.
60 2,
734.
20 1,901.
70
BookValue(Rs) 151.
56 188.
73 237.23 291.
28 323.
45
MARUTISUZUKI–Pr
ofi
t&Lossaccount

Pr
ofit&Lossaccountof
Maruti
Suzuki  
  Mar'
05 Mar'
06 Mar'
07 Mar'
08 Mar'
09
I
ncome        
SalesTurnover 13,
458.
20 14,
898.
80 17,
358.
40 21,
200.
40 23,
381.
50
ExciseDuty 2,
411.
90 2,700.
90 2,552.
00 3,133.
60 2,652.
10
NetSales 11,
046.
30 12,
197.
90 14,
806.
40 18,
066.
80 20,
729.
40
OtherIncome 187.
50 184.
40 338.
10 494.
00 491.
70
StockAdjust
ment
s 141.
70 199.
70 -
200.
70 336.
30 -
356.
60
TotalI
ncome 11,
375.
50 12,
582.
00 14,
943.
80 18,
897.
10 20,
864.
50
Expendi
ture        
RawMat eri
als 8,
650.
20 9,423.
40 10,
863.
00 13,
958.
30 15,
983.
20
Power&Fuel Cost 58.
10 57.20 97.
40 147.
30 193.
60
Empl oyeeCost 196.
00 228.70 288.
40 356.
20 471.
10
OtherManuf act
uri
ngExpenses 215.
70 302.40 392.
40 523.
30 716.
10
Sell
ingandAdmi nExpenses 374.
27 349.51 483.
26 521.
48 751.
06
Miscel l
aneousExpenses 121.
73 145.39 239.
44 287.
62 303.
44
Preoper at
iv eExpCapit
ali
zed -
22.
40 -
6.70 -
14.
30 -
19.
80 -
22.
30
Total Expenses 9,
593.
60 10,
499.90 12,
349.
60 15,
774.
40 18,
396.
20
Oper ati
ngPr ofi
t 1,
594.
40 1,897.70 2,256.
10 2,628.
70 1,976.
60
PBDI T 1,
781.
90 2,082.10 2,594.
20 3,122.
70 2,468.
30
I
nterest 36.
00 20.40 37.
60 59.
60 51.
00
PBDT 1,
745.
90 2,061.70 2,556.
60 3,063.
10 2,417.
30
Depreci at
ion 456.
80 285.40 271.
40 568.
20 706.
50
OtherWr i
ttenOf f 16.
30 0.00 0.
00 0.
00 0.
00
ProfitBefor eTax 1,
272.
80 1,776.30 2,285.
20 2,494.
90 1,710.
80
Ext
ra-
ordi
naryit
ems 51.
40 5.
40 33.
40 76.
60 37.
90
PBT(PostExtr
a-or
dIt
ems) 1,
324.
20 1,
781.
70 2,
318.
60 2,
571.
50 1,
748.
70
Tax 446.
50 560.
90 705.
30 763.
30 457.
10
Repor
tedNetPr
ofi
t 853.
60 1,
189.
10 1,
562.
00 1,
730.
80 1,
218.
70
Tot
alVal
ueAddi
ti
on 943.
40 1,
076.
50 1,
486.
60 1,
816.
10 2,
413.
00
Pref
erenceDiv
idend 0.
00 0.
00 0.
00 0.
00 0.
00
Equi
tyDivi
dend 57.
80 101.
10 130.
00 144.
50 101.
10
Cor
por
ateDi
vi
dendTax 8.
20 14.
20 21.
90 24.
80 17.
20
Pershar
edat
a(annual
i
zed)        
Shar
esi
nissue(
lakhs) 2,
889.
10 2,
889.
10 2,
889.
10 2,
889.
10 2,
889.
10
Earni
ngPerShare(
Rs) 29.
55 41.
16 54.
07 59.
91 42.
18
Equit
yDi
v i
dend(%) 40.
00 70.
00 90.
00 100.
00 70.
00
BookValue(Rs) 151.
56 188.
73 237.
23 291.
28 323.
45
MAHI
NDRA&MAHI
NDRA–Bal
anceSheet

Bal
anceSheetof
Mahindr
aandMahindr
a  
  Mar'
05 Mar'
06 Mar'
07 Mar'
08 Mar'
09
SourcesOfFunds        
TotalShar
eCapit
al 116.
01 233.
40 238.
03 239.
07 272.
62
Equi
tyShar
eCapi
tal 116.
01 233.
40 238.
03 239.
07 272.
62
ShareAppli
cat
ionMoney 0.
00 0.
00 0.
00 0.
00 0.
00
Pref
erenceShareCapi
tal 0.
00 0.
00 0.
00 0.
00 0.
00
Reserves 1,
881.
93 2,
662.
14 3,
302.
01 4,
098.
53 4,
959.
26
Reval
uationReser
ves 14.
32 13.
33 12.
86 12.
47 12.
09
Networth 2,
012.
26 2,
908.
87 3,
552.
90 4,
350.
07 5,
243.
97
SecuredLoans 336.
82 216.
68 106.
65 617.
26 981.
00
UnsecuredLoans 715.
80 666.
71 1,
529.
35 1,
969.
80 3,
071.
76
TotalDebt 1,
052.
62 883.
39 1,
636.
00 2,
587.
06 4,
052.
76
TotalLi
abil
it
ies 3,
064.
88 3,
792.
26 5,
188.
90 6,
937.
13 9,
296.
73
Appli
cati
onOfFunds        
GrossBlock 2,
676.
51 2,
859.
25 3,
180.
57 3,
552.
64 4,
893.
89
Less:Accum.Depreci
ati
on 1,
335.
56 1,
510.
27 1,
639.
12 1,
841.
68 2,
326.
29
NetBlock 1,
340.
95 1,
348.
98 1,
541.
45 1,
710.
96 2,
567.
60
Capi
talWorkinPr
ogr
ess 133.
93 205.
46 329.
72 649.
94 646.
73
I
nvestments 1,
189.
79 1,
669.
09 2,
237.
46 4,
215.
06 5,
786.
41
I
nventor
ies 759.
83 878.
74 878.
48 1,
084.
11 1,
060.
67
Sundr
yDebt
ors 511.
53 637.
97 700.
89 1,
004.
88 1,
043.
65
CashandBankBal
ance 198.
07 258.
39 415.
89 310.
58 635.
61
Total
Curr
entAssets 1,
469.
43 1,
775.
10 1,
995.
26 2,
399.
57 2,
739.
93
LoansandAdvances 461.
07 558.
02 1,
011.
50 866.
19 1,
402.
45
Fi
xedDeposi
ts 425.
91 471.
92 910.
18 550.
65 938.
82
Tot
alCA,
Loans&Adv
ances 2,
356.
41 2,
805.
04 3,
916.
94 3,
816.
41 5,
081.
20
Def
fer
edCr
edi
t 0.
00 0.
00 0.
00 0.
00 0.
00
CurrentLiabi
l
iti
es 1,
480.
87 1,
711.
23 2,
138.
77 2,
525.
31 3,
520.
20
Provisions 499.
71 543.
14 715.
43 943.
46 1,
277.
56
Total CL&Provisi
ons 1,
980.
58 2,
254.
37 2,
854.
20 3,
468.
77 4,
797.
76
NetCur
rentAsset
s 375.
83 550.
67 1,
062.
74 347.
64 283.
44
Mi
scel
l
aneousExpenses 24.
38 18.
05 17.
55 13.
53 12.
55
Total
Assets 3,
064.
88 3,
792.
25 5,
188.
92 6,
937.
13 9,
296.
73
Conti
ngentLi
abi
li
ti
es 758.
14 946.
36 1,
008.
27 985.
35 1,
220.
39
BookValue(Rs) 178.
95 124.
06 148.
72 181.
43 191.
91
MAHI
NDRA&MAHI
NDRA–Pr
ofi
t&Lossaccount

Pr
ofi
t&Lossaccountof
Mahi
ndr
aandMahi ndr
a  
  Mar'
05 Mar'
06 Mar'
07 Mar'
08 Mar'
09
I
ncome        
SalesTurnover 7,
649.
51 9,
273.
09 11,
231.
99 12,
894.
94 14,
713.
03
ExciseDuty 1,
054.
82 1,
136.
50 1,310.
65 1,584.
57 1,587.
05
NetSal es 6,
594.
69 8,
136.
59 9,921.
34 11,
310.
37 13,
125.
98
OtherIncome 209.
74 455.
20 531.
17 575.
96 369.
85
StockAdj ust
ment s 174.
05 103.
20 6.
41 149.
11 -
156.
29
TotalIncome 6,
978.
48 8,
694.
99 10,
458.
92 12,
035.
44 13,
339.
54
Expendi t
ure        
RawMat eri
als 4,
829.
29 5,
885.
21 6,937.
16 7,963.
82 9,
208.
71
Power&Fuel Cost 52.
64 57.
46 65.
19 91.
33 98.
69
Empl oyeeCost 464.
25 551.
78 666.
15 853.
65 1,
024.
61
OtherManuf acturi
ngExpenses 48.
01 54.
44 68.
80 73.
35 75.
36
Sell
ingandAdmi nExpenses 545.
57 667.
99 891.
29 1,108.
33 954.
83
Miscell
aneousExpenses 141.
95 177.
89 210.
03 257.
84 558.
07
Preoperat
iveExpCapit
ali
zed -
31.
84 -26.
53 -
47.
10 -
46.
49 -
42.
83
TotalExpenses 6,
049.
87 7,
368.
24 8,
791.
52 10,
301.
83 11,
877.
44
Oper
atingPr
ofi
t 718.
87 871.
55 1,
136.
23 1,
157.
65 1,
092.
25
PBDIT 928.
61 1,
326.
75 1,
667.
40 1,
733.
61 1,
462.
10
I
nter
est 30.
24 26.
96 19.
80 87.
59 134.
12
PBDT 898.
37 1,
299.
79 1,
647.
60 1,
646.
02 1,
327.
98
Depreci
ati
on 184.
05 200.
01 209.
59 238.
66 291.
51
OtherWrit
tenOf
f 0.
15 0.
28 0.
33 0.
59 0.
00
Prof
itBeforeTax 714.
17 1,
099.
50 1,
437.
68 1,
406.
77 1,
036.
47
Extr
a-or
dinaryi
tems 0.
00 0.
00 -
19.
19 0.
00 4.
07
PBT(PostExt
ra-
ordIt
ems) 714.
17 1,
099.
50 1,
418.
49 1,
406.
77 1,
040.
54
Tax 201.
50 242.
40 350.
10 303.
40 199.
69
Repor
tedNetProf
it 512.
67 857.
10 1,
068.
39 1,
103.
37 836.
78
Tot
alVal
ueAddi
ti
on 1,
220.
58 1,
483.
04 1,
854.
37 2,
338.
01 2,
668.
73
Pr
efer
enceDi
vi
dend 0.
00 0.
00 0.
00 0.
00 0.
00
Equi
tyDi
vi
dend 150.
81 243.
97 282.
23 282.
61 278.
83
Cor
por
ateDi
vi
dendTax 21.
15 34.
22 42.
50 38.
48 33.
23
Pershar
edat
a(annual
i
zed)        
Shar
esi
nissue(
lakhs) 1,
116.
48 2,
334.
00 2,
380.
33 2,
390.
73 2,
726.
16
Ear
ningPerShar
e(Rs) 45.
92 36.
72 44.
88 46.
15 30.
69
Equi
tyDi
vi
dend(
%) 130.
00 100.
00 115.
00 115.
00 100.
00
BookVal
ue(
Rs) 178.
95 124.
06 148.
72 181.
43 191.
91
RATI
OANALYSI
SOFTATAMOTORS,
MARUTISUZUKIANDMAHI
NDRA&
MAHI
NDRA

EARNI
NGSPERSHARE

EARNI
NGSPERSHARE

YEARS Mar'
05 Mar'
06 Mar'
07 Mar'
08 Mar'
09
TATA 34.
19 39.
94 49.
65 52.
63 19.
48
MARUTI 29.
55 41.
16 54.
07 59.
91 42.
18
MAHINDRA 45.
92 36.
72 44.
88 46.
15 30.
69

I
nter
pret
ati
ons
EPSmeasur
est
hepr
ofi
tav
ail
abl
etot
heequi
tyshar
ehol
der
spershar
e,t
hati
s,t
he

amountt
hatt
heycangetonev
eryshar
ehel
d.Ti
l
l2008TATAandMar
utihadar
isi
ng

EPSbuti
n2009bot
hoft
hem f
allandt
heef
fecti
smor
eonTat
amot
orsbecauseoft
he

sl
umpi
ndomest
icandi
nter
nat
ionalmar
ket
sandshar
pfal
linsal
esandnetpr
ofi
ts

whi
chr
esul
tedi
nlowEPS.Mahi
ndr
aisnotmuchaf
fect
edasi
tssal
eshav
eincr
eased

f
rom t
hepr
evi
ousy
ear
.Butast
rend showsMahi
ndr
amot
orshaspot
ent
ialso a

shar
ehol
dercanexpectbet
teri
nfut
ure.
 SALES

SALES

YEARS Mar'
05 Mar'
06 Mar'
07 Mar'
08 Mar'
09
TATA 20,
262.
61 23,
490.
55 31,
089.
69 33,
123.
54 28,
538.
20
MARUTI 13,
458.
20 14,
898.
80 17,
358.
40 21,
200.
40 23,
381.
50
MAHINDRA 7,
649.
51 9,273.
09 11,
231.
99 12,
894.
94 14,
713.
03

I
nter
pret
ati
ons

Mar
utiandMahi
ndr
ashow aposi
ti
vet
rendi
nsal
esov
ert
hepastf
ivey
ear
s.Though

sl
owdowni
ntheeconomybr
oughthur
dlesbutt
hesecompani
eshav
epot
ent
ialt
ogr
ow

i
nfut
ureasl
otsofpr
oduct
sar
est
il
ltoaddi
nthei
rpor
tfol
i
o.Mor
eov
eri
ncr
eased

demandi
nfor
eignmar
ketal
soseemst
obeaposi
ti
vesi
gnalf
orbet
terf
utur
e.TATAhas

wi
tnessedadecl
i
nei
nsal
esofeachsegment
.Mar
uti
andMahi
ndr
aar
egoi
ngswi
ft
ly.
 DI
VIDENDPERSHARE

DI
VIDENDPERSHARE

YEARS Mar
'05 Mar
'06 Mar
'07 Mar
'08 Mar
'09
TATA 12.5 13 15 15 6
MARUTI 2 3.
5 4.
5 5 3.
5
MAHINDRA 13 10 11.5 11.5 10

I
nter
pret
ati
ons

Tat
amot
orsandMar
utiSuzukibot
hthecompani
esshowedaposi
ti
vet
rendi
npay
ing

di
vi
dendst
il
l2008,butt
hescenar
iochangedi
n2009asbot
hthecompany
’sdi
vi
dend

pershar
efel
l
.Accor
dingt
ogr
aphTat
a’sdi
vi
dendhasf
all
endr
ast
ical
l
ywhi
l
eMar
uti

st
ickt
obel
ow5pershar
e.Mahi
ndr
ahasmadeasl
i
ghtr
educt
ionf
rom r
s.11.
5pershar
e

i
n2008t
ors.
10pershar
ethi
syear
.Ther
efor
eMahi
ndr
awoul
dbet
hebestopt
ionf
oran

i
nvest
or.
 RETURNONI
NVESTMENT(
ROI
)

Ret
urnonI
nvest
ment

YEARS Mar'
05 Mar'
06 Mar'
07 Mar'
08 Mar'
09
TATA 30.
09 27.
74 27.
96 25.
98 8.
09
MARUTI 19.
49 21.
81 22.
79 20.
56 13.
04
MAHINDRA 25.
66 29.
6 30.
18 25.
51 16.
03

I
nter
pret
ati
ons

ROIi
soneoft
hemosti
mpor
tantr
ati
osusedf
ormeasur
ingt
heov
eral
lef
fi
ciencyofa

f
ir
m and det
ermi
nes whet
hert
he i
nvest
ment
sint
he f
ir
ms ar
e at
tr
act
ive ornot
.

Accor
dingt
hegr
aph,ROIofTATAhasdecl
i
nedt
oal
argeext
enti
n2009,maki
ngi
ta

qui
ter
iskyi
nvest
ment
.Mar
uti
’
sROIhasal
sodecl
i
nedbutMahi
ndr
a’sROIi
sshowi
nga

hi
gherr
atecompar
edt
oTATAandMar
utii
n2009.Ast
hei
nvest
orswoul
dli
ket
oinv
est

onl
ywher
ether
etur
nishi
gher
,Mahi
ndr
awoul
dbeat
tr
act
ivef
ori
nvest
ment
.
 DI
VIDENDPAYOUTRATI
O

DI
VIDENDPAYOUTRATI
O

YEARS Mar'
05 Mar'
06 Mar'
07 Mar'
08 Mar'
09
TATA 41.
68 37.
13 35.
34 32.
51 34.
52
MARUTI 7.
73 9.
69 9.
72 9.
78 9.
7
MAHINDRA 33.
54 32.
45 30.
39 29.
1 37.
29

I
nter
pret
ati
ons

Di
vi
dendpay
outr
ati
oist
heper
cent
ageofear
ningspai
dtoshar
ehol
der
sindi
vi
dends.I
t

pr
ovi
desani
deat
oani
nvest
orofhow wel
lear
ningssuppor
tthedi
vi
dendpay
ment
s.

Mar
utihasmai
ntai
nedast
abl
epay
outr
ati
o.Bot
hTATAandMahi
ndr
ahav
eincr
eased

t
hei
rpay
outr
ati
oinwhi
chMahi
ndr
ashowsahi
gherpay
outr
ati
o.
 PRI
CE-
EARNI
NGSRATI
O(P/
ERATI
O)

PRI
CE-
EARNI
NGSRATI
O

YEARS Mar'
05 Mar
'06 Mar
'07 Mar
'08 Mar
'09
TATA 19.
09 22.
5 14.
9 3.
02 40.6
MARUTI 21.
5 22.
5 18.
3 8.
6 36.9
MAHINDRA 11.
1 24.
6 19.
1 5.
9 35.2

I
nter
pret
ati
ons

Thi
srat
ioi
swi
del
yusedbyi
nvest
orst
odeci
dewhet
herornott
obuyshar
esi
na

par
ti
cul
arcompany
.Aspert
hegr
aph,
in2008,
theP/
Erat
iooft
het
hreecompani
eswas

t
hel
owestcompar
edt
othepr
evi
ousy
ear
s.TATAhast
hehi
ghestP/
Erat
ioi
n2009

whi
chi
ndi
cat
est
hati
tisov
erv
alued,sot
hei
nvest
orscanbenef
itbysel
l
ingt
heshar
es.

Ani
nvest
orcangof
orMahi
ndr
aasi
tsP/
Erat
ioi
sthel
owesti
n2009whi
chi
ndi
cat
es

t
hati
tisunder
val
uedandt
her
eisascopef
orgr
owt
hint
hef
utur
e.
 CHAPTERVI

FI
NDI
NGS,
SUGGESTI
ONS&CONCLUSI
ON
FI
NDI
NGS

Fr
om t
hedat
aanal
ysi
sandi
nter
pret
ati
onsoft
her
ati
osoft
hreecompani
es’v
iz.Tat
a

Mot
ors,Mar
utiSuzukiandMahi
ndr
aandMahi
ndr
a,t
hef
oll
owi
ngf
indi
ngshav
ebeen

gi
ven:

 Thet
hreecompani
eswer
eper
for
mingwel
lti
l
l2008wi
thaposi
ti
vet
rendi
nthe

ear
ningspershar
e.Butt
her
ewasadownwar
dtr
endi
n2009.Especi
all
y,TATA

haswi
tnessedast
eepf
all
int
hey
ear2009.

 Thesal
est
rendhasbeenupwar
dandposi
ti
vei
ncaseofal
lthet
hreecompani
es.

Thesal
esgr
owt
hlooksposi
ti
vebuti
nthey
ear2009,
TATA’
ssal
eshav
edecl
i
ned

wher
easMar
uti
andMahi
ndr
ahav
emai
ntai
nedt
hesameupwar
dposi
ti
vet
rend.

 I
ncaseofdi
vi
dendpershar
e,t
her
ewer
efl
uct
uat
ionsdur
ingt
heper
iod2005-

2009.Duet
orecessi
on,t
hedi
vi
dendspershar
ehav
edecl
i
nedi
nal
lthet
hree

compani
es.Tat
a’sdi
vi
dendhasf
all
endr
ast
ical
l
ywhi
l
eMar
utist
ickt
obel
ow 5

pershar
e.Mahi
ndr
ahasmadeasl
i
ghtr
educt
ionf
rom r
s.11.
5pershar
ein2008

t
ors.
10pershar
ethi
syear
.

 Ther
etur
noni
nvest
menthasbeenf
luct
uat
ingsi
nce2005andt
hey
ear2009

wi
tnessedl
owr
etur
nsi
ncaseofal
lthecompani
esamongstwhi
chTATAhast
he

l
eastr
ateofr
etur
n.Compar
edt
othet
hreecompani
es,
Mahi
ndr
ahast
hehi
ghest

ROIi
n2009.

 Mar
utihadast
abl
edi
vi
dendpay
outr
ati
osi
nce2005.TATAandMahi
ndr
ahav
e

i
ncr
easedt
hei
rpay
outr
ati
oinwhi
chMahi
ndr
ashowsahi
gherpay
outr
ati
o.

 The t
hree compani
es hav
e wi
tnessed a l
ow pr
ice ear
nings r
ati
oin 2008

compar
ed t
othe pr
evi
ous y
ear
s.Butt
he r
ati
oincr
eased i
n 2009 i
nthr
ee
 compani
es.TATAhast
hehi
ghestP/
Erat
ioi
n2009whi
chi
ndi
cat
est
hati
tis

ov
erv
aluedandMahi
ndr
a’sP/
Erat
ioi
sthel
owesti
n2009whi
chi
ndi
cat
est
hati
t

i
sunder
val
uedandt
her
eisascopef
orgr
owt
hint
hef
utur
e.

Byanal
yzi
ngt
hecur
rentt
rendofI
ndi
anEconomyandAut
omobi
l
eIndust
ryIhav
efound

t
hatbei
ngadev
elopi
ngeconomyt
her
eisl
otofscopef
orgr
owt
handt
hisi
ndust
ryst
il
l

hast
ocr
ossmanyl
evel
ssot
her
ear
ehugeoppor
tuni
ti
est
oinv
esti
nandt
hisi
sbei
ng

pr
ovedasmor
eandmor
efor
eigncompani
esar
eset
ti
ngupt
her
event
uresi
nIndi
a.

I
ncr
ease i
nincome l
evel
,incr
ease i
n consumerdemand,t
echnol
ogydev
elopment
,

gl
obal
i
zat
ion,
for
eigni
nvest
ment
sar
efewoft
heoppor
tuni
ti
eswhi
cht
hei
ndust
ryhast
o

expl
oref
ordev
elopi
ngt
heeconomy
.
SUGGESTI
ONS

Byanal
yzi
ngt
heaut
omobi
l
eindust
rywi
tht
hehel
poff
undament
alanal
ysi
s,i
thasbeen

r
eveal
edt
hatt
hisi
ndust
ryhasal
otofpot
ent
ialt
ogr
ow.Sor
ecommendi
ngi
nvest
ingi
n

Aut
omobi
l
eindust
rywi
thnodoubti
sgoi
ngt
obeagoodandsmar
topt
ionbecauset
his

i
ndust
ryi
sboomi
ngl
i
kenev
erbef
orenotonl
yinI
ndi
abutal
lov
ert
hewor
ld.

Thet
hreegi
ant
sofI
ndi
anAut
omobi
l
eindust
ryv
iz.TATAMot
ors,Mar
utiSuzukiand

Mahi
ndr
aandMahi
ndr
ahav
eout
per
for
medi
nthei
ndust
ry.

 Fr
om t
hecompanyanal
ysi
s,wecanknowt
hatMahi
ndr
awoul
dbeabet
teropt
ion

f
orani
nvest
orcompar
edt
oTATA andMar
uti
.Inv
iew oft
hesl
umpi
nthe

domest
icandi
nter
nat
ionalmar
ket
,TATAhasr
ecor
dedasl
owdowni
nsal
esand

i
ncomel
evel
.It
sEar
ningspershar
ehasal
sodecl
i
neddr
ast
ical
l
y.I
thasr
educed

i
tsdi
vi
dendpershar
efr
om r
s.15i
nthepr
evi
ousy
eart
ors.
6in2009.Ther
etur
n

oni
nvest
menti
sal
sov
eryl
ow.I
nvi
ewofal
lthese,TATAi
snotabet
teropt
ion

f
orani
nvest
or.

 Thegl
obalt
urmoi
linf
inanci
almar
ket
shasaf
fect
edMar
utial
so.Thecompanyi
s

mai
ntai
ningast
abl
eposi
ti
on.I
tssal
eshav
egr
ownov
erpastf
ivey
ear
s.I
nspi
teof

t
hegener
aleconomi
csl
owdown,t
hesal
esofMar
utiSuzukii
ncr
easedf
rom Rs

21200Cr
oret
oRs23381Cr
ore.Asi
tismai
ntai
ningast
abl
eposi
ti
on,i
tcanbe

r
ecommendedt
hatf
ornowMar
utishar
epr
iceshowst
hati
t’
sat
imet
ohol
dthe

posi
ti
onorbuymor
eshar
esast
her
eisscopeoff
urt
herr
isei
nshar
epr
ices.

 Despi
tet
hechal
l
engi
ng busi
nessenv
ironment
,Mahi
ndr
a hasmai
ntai
ned i
ts

upwar
dsal
esl
evel
.It
sRet
urnonI
nvest
menti
smuchhi
ghercompar
edt
oTATA
 andMar
uti
.Thedi
vi
dendpershar
eisr
s.10whi
chi
shi
gheramongstt
het
hree

compani
es.Thecompanyhaspot
ent
ialt
ogr
ow.I
twoul
dbet
hebestopt
ionf
or

t
hei
nvest
or.

 I
nvest
ingi
nMar
utiSuzukif
orl
ongt
imecoul
dbeagoodopt
ionwher
easi
nTATA

mot
orst
her
eisachanceofget
ti
ngcor
rect
ion,
asi
tal
readywentonhi
ghsi
dei
na

v
eryshor
tper
iodoft
imeandi
sexper
ienci
ngadownf
all
from 2008.

 Hol
dingt
heshar
esf
orl
ongt
imecoul
dbeawr
ongst
epandatt
hispoi
ntoft
ime

t
hosewhoi
nvest
edear
li
ercanbookt
hei
rpr
ofi
ts.AsMahi
ndr
a’sshar
esar
e

under
val
ued,
thei
nvest
orcanbuyt
heseshar
es.Thi
sisbecausear
elat
ivel
ylower

P/
Ewoul
dsav
einv
est
orsf
rom pay
ingav
eryhi
ghpr
icet
hatdoesnotj
ust
if
ythe

v
alueofani
nvest
ment
.

FewSuggest
ionsf
or“
RightSt
ockSel
ect
ion”

Ther
ear
ethr
eef
act
orswhi
chani
nvest
ormustconsi
derf
orsel
ect
ingt
her
ightst
ocks.

 Busi
ness:
Ani
nvest
ormustl
ooki
ntowhatki
ndofbusi
nesst
hecompanyi
sdoi
ng,

v
isi
bil
i
tyoft
hebusi
ness,i
tspastt
rackr
ecor
d,capi
talneedsoft
hecompanyf
or

expansi
onet
c.

 Bal
anceSheet
:Thei
nvest
ormustf
ocusoni
tskeyf
inanci
alr
ati
ossuchas

ear
ningspershar
e,pr
ice-
ear
ningr
ati
o;debt
-equi
tyr
ati
o,di
vi
dendspershar
eet
c

andhemustal
socheckwhet
hert
hecompanyi
sgener
ati
ngcashf
lows.

 Bar
gai
ning:Thi
sist
hemosti
mpor
tantf
act
orwhi
chshowst
het
ruewor
thoft
he

company
.An i
nvest
orneedst
o choosev
aluat
ion par
amet
erswhi
ch sui
tit
s

busi
ness.
I
nvest
mentr
ules

 I
nvestf
orl
ongt
ermi
nequi
tymar
ket
s

 Al
i
gny
ourt
houghtpr
ocesswi
tht
hebusi
nesscy
cleoft
hecompany
.

 Sett
hepur
posef
ori
nvest
ment
.

 Longt
erm goal
sshoul
dbet
heobj
ect
iveofequi
tyi
nvest
ment
.

 Di
sci
pli
nedi
nvest
mentdur
ingmar
ketv
olat
il
it
yhel
psat
tai
nspr
ofi
ts.

 Pl
anni
ng,
Knowl
edgeandDi
sci
pli
near
ever
ycr
uci
alf
ori
nvest
ment
.
CONCLUSI
ON

TheAut
omobi
l
eindust
ryi
nIndi
aist
hesev
ent
hlar
gesti
nthewor
ldwi
thanannual

pr
oduct
ionofov
er2.
6mi
l
li
onuni
tsi
n2009.I
n2009,I
ndi
aemer
gedasAsi
a'
sfour
th

l
argestexpor
terofaut
omobi
l
es,
behi
ndJapan,
Sout
hKor
eaandThai
l
and.

Thecol
l
apsei
nmar
ketpl
acewi
tnessedunpr
ecedent
edt
urbul
encei
nthewakeofgl
obal

f
inanci
almel
tdown.Ar
unawayi
nfl
ati
ont
ouchi
ngahi
ghpoi
ntof12%ear
lyi
nthey
ear
,

t
het
ightmonet
arypol
i
ciesf
oll
owedbyt
heaut
hor
it
iesf
ormostoft
hey
eart
ocont
rol

i
nfl
ati
onwi
tht
heconsequenthi
ghi
nter
estr
atesandweakconsumerdemand,hav
e

col
l
ect
ivel
yhadadev
ast
ati
ngef
fectont
heaut
omot
ivesect
or.

Mar
utiSuzukiI
ndi
aLTD.companyhasat
rendofgr
owt
hfr
om t
il
l2008.
Dur
ingt
hef
inanci
aly
ear2008-
09t
het
her
eis

downf
alli
nthegr
owt
hoft
hecompany
.Themai
nreasonbehi
ndt
hisdownf
alli
sbecauseoft
hegl
obalr
ecessi
on.The

downf
allofnetpr
ofi
tdur
ingt
hef
inanci
aly
ear2008-
09i
s29.
6%ov
ert
hef
inanci
aly
ear2007-
2008.

TATAMot
ors,whi
chwast
ryi
ngt
oconsol
i
dat
eit
sleader
shi
pposi
ti
oni
nthemar
ket
,al
sohadt
ofacet
hei
mpactof

gl
obalmel
tdown.Ami
dthecr
ippl
i
ngeconomi
ccr
isi
s,Tat
apur
chasedBr
it
ain’
sJaguarLand

Rov
er(
JLR)f
rom For
dMot
orCompany
.Acqui
ri
ngJLRsaddl
edTat
awi
thsomet
ough

l
osses.Di
vi
dendsandear
ningsr
emai
nlow.

I
nspi
teofi
tbei
ngat
oughy
earf
oral
lthecompani
esacr
osst
hegl
obeandi
nIndi
a,

Mahi
ndr
ahasgi
venasat
isf
act
oryper
for
mance.Atpr
esenti
tsshar
esar
eunder
val
ued

gi
vi
ngi
tapot
ent
ial
forgr
owt
h.

Gl
obal
recessi
onhadadampeneref
fectont
hegr
owt
hofaut
omobi
l
eindust
rybuti
twas

ashor
tter
m phenomenon.Thei
ndust
ryi
sbounci
ngback.Onef
act
orf
avor
ingt
hispoi
nt

i
sthatI
ndi
ahasbecomeahotdest
inat
ionf
orcompani
esofdi
ver
senat
uret
oinv
esti
n.
Cutt
hroatcompet
it
ionamong t
op compani
es,l
otsofnew carand v
ehi
clemodel

l
aunchesatr
egul
ari
nter
val
skeepst
heI
ndi
anaut
osect
ormov
ing.

Acont
inuousef
for
tatcostcut
ti
ngandi
mpr
ovi
ngpr
oduct
ivi
tywi
l
lhel
pthecompani
esi
n

maki
ngr
easonabl
epr
ofi
tsdespi
tet
hei
mpactofhi
ghercommodi
typr
icesandweaker

r
upee.

The anal
ysi
s gi
ves an opt
imi
sti
cvi
ew aboutt
he i
ndust
ry and i
ts gr
owt
h whi
ch

r
ecommendst
hei
nvest
orst
okeepagoodwat
chont
hemaj
orpl
ayer
stobenef
iti
n

t
ermsofr
etur
nsont
hei
rinv
est
ment
s.
BI
BLI
OGRAPHY

TextBooks

 Secur
it
yAnal
ysi
sandPor
tf o ManagementbyPuni
ol
i thav
athyPandi
an,Vi
kas
Publ
i
cat
ions.

 Secur
it
yanal
ysi
sandpor
tf omanagementbyV.
ol
i A.Av
adhani

 Fi
nanci
alMar
ket
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