1.1 INTRODUCTION ABOUT THE TOPIC The atket for long term securities like bonds, equity stocks and preferred stocks is divided into primary market snd secondary market Primary market deals with the new issues of securities. Outstanding ‘securities are trade! in the secondary market, which is commonly known ‘as stock market or stock exchange. Inthe secondary marker, the investors ean sell or buy securities Stock markets predominantly dealin the equity shares, Well regulated and active stock market promotes capital formation. The health of the economy is reflected by the prowth of the stock market. Stock broking is a growing industry in India, The main ‘reason is that Indian economy is one ofthe stromgest in the world. As @ result of that bor foreign and domestic investors are interested in {investing in Indian stock market The wpie selected for the stay is “Security Analysis of selected power sector securities listed in Bombay Stock Exchange” with reference to Motilal Oswal securities Ltd, Thrissurselected are NTPC, RELIANCE, POWERGRID, NHPC, TATAPOWER ‘and ADANI POWER. Security analysis is condueted by analyzing both the fundamental and technical aspects. The technical analysis includes bar chart, Moving Average & RSI (Relative Strength Index) ‘Security analysis‘An examination and evatuation of the various factors affect value of a security is known as Security analysis. Security analysis rofers to the analysis of tradable financial instruments, Financial instruments can be classified into debt securitis, equities, or some hybrid of the two, fuures contracts and tradable evedit derivasives are sometimes included. Security alysis is typically divided into tion of fundamental analysis, whieh celies upon the exa fundamental business factors such as financial statements, and {echnical analysis, which focuses upon price tends and! momentum = Two analytical models When the objective of the analysis is to determine what stock to buy and at what price, there are two basic methodologies jamental analysis maintains that markets the short run but that the “correet® price will eventually be reac. Profits can be made by trading the mispriced security and then waiting forthe 0 security. misprice a security in urket to recognize its "mistake" and resprice thefor deciding entry and exit points. Many technical investors use fundamenials to limit their universe of possible stock to ‘good’ companies Fundamental analysis Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and murkets. When applied wo futures and forex, it foeuses ‘on the overall state of the economy, interest rates, production, carnings, and management. When analyzing a stock, futures contract, or currency using fundamental analysis cere are two basic approaches one san us botom up analysis an top dosin analysis The term is used wo distinguish such analysis fiom other types of investment analysis, such as ‘quantitative analysis and technical analysis.A method of security valuation which involves examining. the company’s financials and operations, especially sales, earings, growth potenti, assas, debt, management, products, and competition, Fundamental analysis takes ito cconsibaton oly those variables tha ae dell elite ta the sary iinet cine dean thn venti edie che maith or inch 1 analysis data.+ Toe uct # company stack valuation and predict its probable price evolution, “To make a projection on its business performance, “To evaluate its management and make intemal business decisions, > Teal late its credit risk ‘Tools for fundamental analysis For fundamental analysis, the following ratios are used: EPS = PAT/No of equity shares pps = Amount declared as dividend / No, of equity shares Pay out ratio = DPs/ EPs ROE PAT / Net worth PFE ratio = MPS / EPSdemand ond supply forces re in turn influenced by a number of fundamenial factors as well as cenain psychological and emotional factors. The combined impact of all these factors is reflected in the share price movement, The technical analysis therefore concentrates on the movement of share price, Technical analysis the mame given 10 forecasting techniques that utilize historical share price data, Teehnical analysis is a method of evaluating securities by analyving statistics generated by market activity, such as past prices and volume, ‘Technical analysts do not attempt to measure a security’s intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity. Technical analysis believe thatthe historical performance ‘of stocks and markets are indications of future performance. ‘TOOLS OF TECHNICAL ANALYSIS > Relative Strength Indexfor the purpose of either uncovering profitable trading rules or testing ‘market efficieney, or both, The technical rading studies simulated only ‘one oF two tra ng systems In these studies, although transaction costs were deducted to compute net returns of technical trading strategies, risk vas not adequately handled, statistical tests of trading profits and data snooping problems were often disregarded, and out-of-sample verification along with parameter (trading rule) optimization were not ‘considered in the testing procedure, Goodman and John W Peavy (1983) in their study found that there is no way of making an expected profit by extrapolating past changes in the futures price, by chart or any other esoteric devices of magic or ‘mathematics, The market quotation already contains in itself all that can bbe known about the future and in that sense has discounted finure contingencies as much as is humanly possible. Philip © Regan (1988) explained that demonstrated that under a noisy:‘earnings numbers do contain formation useful for predicting Future ‘earnings changes that isnot contained in either pastor current earnings. Edvard (1992) found that also extends her test to include a “valuation link” between the predicted future earings changes: and stock rotums ring the annual report dissemination period, She finds evidence that this valuation link does exist. The non-earnings accounting numbers are therefore useful for predieting both future earnings and recurs. Dernark and Thomas R (1994) explained that the history of technical analysis dates back 10 at least the 18th century when the Japanese developed a form of technical analysis known as candlestick charting techniques, This technique was not introduced to the West until the 1970s Hackel ond Kenneth S (1996)found that it has been stated that “the task ‘of research is to discover what information projects future earnings and, from a financial statement analysis point of view, what information in theofa firm and supports the use of eapital expenditures for predicting Foture ‘earings or returns ‘Thomas Robinson (2002) in their study explained that Fundamental analysis involves assessing a firm’s equity value based on the analysis of published financial statements and other information without reference to the prices at which a firm's securities wade inthe capital markets. Palepu wd Krishna. (2004) found that technical analysis has been ‘extensively used among market participants such as brokers, dealers, fand wagers, speculators, and individual investors in the financial industry '3 Numerous surveys indicate that practitioners attribute a significant role to technical analysis. For example, futures fund mangers rely heavily on computer-guided technical trading systems, and about 30% to 40% of foreign exchange traders around the world believe that technical analysis is the major factor determining exchange rates in the short-run up to six‘cultural influences. But markets are social institutions, They "organize ‘and guide human social behavior through sanetions (formal and informal, negative and positive), mores, norms, status, and shared worldviews". Consequently, explaining economic exchange requires an understanding ‘ofthe behavior associated with the subculture of those in question. Dhanesh Kumar Khatri (2006) in their article found that a leading technical analyst, provides a more specific definition: “The technical approach to investinent is essentially a reflection of the idea that prices move in tends that are determined by the changing attitudes of investors toward a variety of economic, monetary, polit J, and psyehological foroes. The art of weehnival analysis, for itis an art, is wo ide fy a wend reversal ata relatively early stage and ride on that trend until the weight (ofthe evidence shows or proves thatthe trend has reversed.” Stephan H_ Penman (2007) in his study found that Technical analysis ludes a variety of forecasting te! jques such as chart analysis, patern ‘recognition analysis, seasonality and cycle analysis, and computerizedRan Caneiti & IBM Research (2008) explained that Composable Format Security Analysis, a security property of a protocol is eomposable if it remains intact even whon the protocol runs alongside other protocols in the same system. We describe a methed for asserting eomposable security properties, and demonstrate its usefulness. In particular, we show how this method ean be used to provide security analysis that is forma, relatively simple, and still does not make unjustified abstractions of the underlying cryptographic algorithms in use. It can also greatly enhance the feasibility of automated security analysis of systems of realistic size, Prasanna Chandra (2008) in his study he explained that Motivated by an ‘obvious gap between the widespread use of Bloomberg terminals in the fi nee industry and the seant resources available to an instructor on how to incorporate the available information through the terminal into a finance course, we illustrate our experience using the terminal in an ‘equity-focused security analysis and portfolio management course, Our ‘goal is to enable students inexperienced withthe terminal to prepare an analyst report We identify the most significant challenges we face and provide the corresponding solutions, Our results are also applicable to‘© To study fundamental and technical analysis of seeuri in the power sector. ‘+ To evaluate the performance ofthe company. * Tosanalyze the movement of stock ‘© To evaluate the risk and return of the selected securities. 132 NEED OF THE STUDY The capital gains of an investor are on the performance of a particular ‘company's stock inthe stock market. The stronger the company's share, the more profit the investor gots. So itis nevessary to ascertain, analyze ‘and interpret the share of various fms in order to know is position in the market. Investors ean make wise investment with the help ofthis analysis ‘Through this project, it tries to point out the company which ensure ‘maximum return snd minimum risk in power sector where in investment ‘could be made,Data considered only for past few months Indion capital market is featured by the weak form of efficient market hypothesis ‘The research will be confined to only 7 securities in the powerDUSTRY PROFILE Capital Market (@1@ The market where investment fands Tike bonds, equities and mortgages are traded is known as the capital market. The primal role of the capital market isto channclize investments from investors who have surplus funds tothe ones wh are running a deficit, The capita markot offers hoth fon term and overnight funds. The Financia instruments that have shor or medium term maturity periods are dealt in the money amare hers the financial instruments tha have fong maturity periods are dealt in the capital market. The different types of financial instruments tht are trade in the capital markats are equity instruments, credit market instruments, insurance instruments, foreign exchange insicaments, hybrid nsiruments and derivative intranets ‘A capital market is a mark for ssurtes (both debt and equi), ‘where business enterprises (sompanis) and goxecaments ean mise fong- term funds. {is defined a a market in which money is lent for periods Jonger than a year, as the raising of short-term funds takes place on otherPrimarymarket ‘The primary market i that part ofthe capital markets that deals with the issuance of new securities. Companies, governments or public sector institutions can obtain funding through the sale ofa new stock oF bond issue. This is typically done through a syndieate of securities dealers. The process of selling new issues to investors 4s called underwriting n the case ofa new stock issue, this sale is an inital public offering (1PO), Dealers earn acon that is bulle into the price ofthe security offering though st can be found inthe prospectus. ‘The primary markets are where new stock and bonds issues are sold (via underwriting) to investors. The secondary markets are where existing securities are sold and bought from one investor or trader to another, usually on a securities exchange, aver the counter or elsewhere Features of primary markets are:+ The primary market performs the crucial function of facilitating capital formation in the economy. + The new issue market does not include certain other sources of new Jong term external finance, such as loans ffom financial institutions, Borrowers in the new issue market may be raising capital for converting private capital into public capital; this is known a ‘uoing publi.” + The financial assets sold ean only be redeemed by the original holder. “Methods of issuing securities inthe primary market are: 1 Initial public offerings 2 Rights issue (Tor existing companies); An initial public stock offering (IPO) referred to simply as an “offering* or "flotation," is when a company issues common stockshareholders’ money in exchange for shares, a rights issue is a source of capital Secondary market ‘The secondary market, also known as the aftermarket, Is the financial market where previously issued securities and financial instruments such as stock, bonds, options, and futures are bought and sold, The term “secondary market*is also used to refer to the market for any used goods or assets, or an alternative use for an existing product or asset where the customer base is the second market (for example, corn has been adit jonally used primarily for food production and feedstock, but a second- o third- market has developed for use in ethanol production)corporations issuing shares in an IPO or private placement. or diteetly from the Federal povernment in the ease of treasuries. After the initial issuance, investors can purchase from other investors in the secondary market.the seondary market for a variety of assets ean vary from fragmented to centralize, ‘and from illiquid 10 very liquid, The major stock exchanges are the most Visible example of liquid sevondary markets = in this case, for stocks of Publicly traded companies. . Exchanges provide s centralized, liquid secondary market for the investors who own stocks that trade on those ‘exchanges. Most bonds and structured products trade “over the counter,” ‘or by phoning the bond desk of one’s broker-dealer. Functions of Secondary market Secondary marketing is vital to an efficient and modern capital market In the secondary market, securities are sold by and transferred from one Investor or speculator to another. It is dheeitiace encenne tine Giscemuntensnalins tideciteumstances) with the capital users preference to be able to use the ‘capital for an extended period of ime Stock Exchanges Stock exchanges are open markets that trade financial assets, Whether associated with a company or acting as an individual, a stock exchange is the place where stacks are bought and sold. ‘There are a number of major stock exchanges around the world and each of these plays a patt in determining the overall financial and economic condition of any economy. Stock exchanges deal with @ number of financial instruments such as stocks, bonds and equities. Both corporate and government bonds are traded in stock exchanges. Equities include popular investment options, rights issues, bonus issues, and all other forms of shares and stocks. The actual trading of stocks takes place through mediators such as Pnancial advisors, brokerage houses, and stockbrokers A stock exchange, (formerly a securities exchange) is a corporation i a aa i a i em alla eeelectronic networks, which gives them advantages of speed and cost of transactions. Trade on an exchange is by members only. The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market. A stock exchange is often the ‘most important component of a stock market, Supply and demand in stock markets are driven by various factors which, as in all free markets, affect the price of stocks (see stock valuation) There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the exchange. Such trading is said to be off exchange or over-the- counter. This is the usual way that derivatives and bonds are traced, Increasingly, stock exchanges are part ofa global market for securities. ‘The role ofstock exchangesstock exchanges protect the interests of both buyers and sellers bby assuring a timely transfer of money. The participants ofa stock market are required to operate within the specified transaction limits fixed by the regulatory authority of that stock market Speed and transparency are vital for all. stock market transactions. The companies listed in a stock exchange need to provide proper gui vance and ce regarding business perfor prospects, mergers and acquisitions, stock prices, dividends and cother information at all times, Investors make their investment decisions based on the information obtained from these companies, and the comments of analysts who track those companies. Bombay Stock Exchange Bombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage, mow spanning three centuries in its 133 years ofbeginning of October 2008, The total world derivatives market has been estimated at about $791 trillion face or nominal value, 11 times the size of the entire world economy. The value of the derivatives market, because it is stated in terms of notional values, cannot be directly compared to a stock or a fixed income security, which traditionally refers to an actual value, Moreover, the vast majority of derivatives ‘cancel’ each other out (Le, a derivative ‘bet’ on an event occurring is offset by a comparable derivative ‘bet’ on the event not oceurring.). Many such relatively illiquid securities are valued as marked to model, rather than an actual market price. ‘The stocks are listed and traded on stock exchanges which are entities of a corporation or mutual organization specialized in the business of bringing buyers and sellers of the organizations to a listing of stocks and securities together A transaction on a stock exchange must be made between two sine i hi a a Ne a i> Discretionary dealing, where the stockbroker ascertains the lient’s investment objectives and then makes all dealing decisions on the client's behalf Roles similar to that of a stockbroker include investment advisor, and finaneial advisor. A stockbroker may or may not be also an investment advisor. Stockbrokers also sometimes or exclusively trade on their own behalf, ss a principal, speculating that a share or other financial instrament will inerease or decline in price. In such eases the term broker makes litle sense and the individuals or ns trading in principal sometimes all themselves dealers, stock traders or simply waders. 2.2 COMPANY PROFILE Motilal Oswal Secu jes LtdServices, Institutional Equities, Private Equity, Investment Banking Services and Principal Strategies. Company have a diversified client base that includes retail ‘customers (including High Net wrth Individuals), mutual Funds, foreign insiutional investors, financial inst ns and corporate elients ‘company headquartered in Mumbai and as of June 30th, 2009, had a b 1,308 Business network spread over 355 cities and towns compris Locations at June 30th, 2009, company had 5,$7,373 registered ‘customers In 2006, the Company placed 9.48% of its equity with two leading private equity investors based out of the US ~New Vernon Private ‘Equity Limited and Bessemer Venture Partners. The company got listed ‘on BSE and NSE on September 9, 2007. The issue which was priced at Rs825 per share (fice value RSS per share) got an overwhelming response and was subscribed 27.18 times in turbulent market conditions. ‘The issue gave a return of 21% on the date of listing. As of end of fi ‘capitalization as of March 31, 2008 was Rs.19 bn. ical year 2008, the group net worth was Rs.7 ba and marketIn keeping with its tradition of personalized service, Motilal Oswal Securities Limited provides Customized Equity Advisory Group to clients based on their profile. Equity Research an inherent strength of MOSt, Converting that research to advice is Advisory. The presented and communicated with conviction to clieats by advisory team, 1¢ main function of Equity vestment ideas tified by the research team are MOSt Equity Advisor proactively helps you take informed equity investment decisions and build a healthy portfolio giving the best fit ro ‘your investment and trading needs > Derivatives Futures & options are derivatives, which use equity as their underlying, Henee Equity Advisory Group (EAG) will also act as advisors for F&O & help take informed decisions while trading in these derivative instrament, Since derivatives instrument provide good leverage opportunity, it is « great tool for speculation, Leverage is a double edge sword for whieh one requires an equity advisor. The advisors ‘will also help with various strategies like Bull Spread, Bear Spread, I a itrading habit’s & preference and trade anywhere, anytime. Buying and selling is as easy as click ofa button. Key Features: 4 Single platform for ultiple exchange BSE & NSE (Cash & F&O), Mutual Funds & 1PO, * + by tick market watch (BSE / NSE/ F&O), ingle window Order placement with instant co + Instant funds transfer from any of our 19 listed hanks. 4% Afler Market Order (AMO) can place orders in advance before market opens. > Mutual funds “Mutual funds offer the ideal platform to participate in the Equity & Debt market iretly through professional management, Mutual funds are becoming the most popular investment vehicles offering various kinds ‘of schemes with different investment objectivesreceived at different price levels and the demand for the issue is built up ‘over a period of time, > Motilal Oxwal Depository Services (MODES) Today MODES is available at all business locations of Motilal ‘Oswal, In terms of number of accounts MODES is the second biggest Depository Participant in CDSL with over 150,000 accounts. Holder of a MODES secount get recommendations on their holdings based on Motilal Oswal Research rated the "Most Independent Research - Local Brokerage" by Asia Money Brokers Poll 2006. > Marginal funding Motilal Oswal Financial Services understand needs and help the trader to meet ir liquidity requirements. Company offer Margin funding to individuals and corporate. Company provide finance for {investment in primary market issues and also possess expertise in financing for ments to buy securities from3 RESEARCH METHODOLOGY 3.1 Reasearch Type ‘The seument identified for conducting the study is power Sector in In ‘The number of companies selected for the study is: Seven. Analytial study is used to conduct the study. 3.2 Data collection secondary data is collected fiom websites, Books and magazines. 3.3 Tools for analysis © Fundamental Analysis ‘© Technical Analysis, For fundamental analysis, the following ratios are usedFor technical analysis, the following tools are used: # Relative strengl + 5 doy moving average ‘= 50 day moving average ‘Line chart and candlestick chat indexAnalysis and Interpretation of data Analysis of data is process of inspecting, leaning, transforming, and ‘modeling data with the goa! of highlighting useful information, suggesting conelusions, ond supporting decision making. Data analysis has multiple facts ‘and approaches, encompassing diverse techniques under a variety oP names, in ifferent business, science, and social seience domains. ADANI POWER ‘Table No:4.1.1 Share Price details of Adani Power for the year ended 2011-2012 Face value To Market capitalization @ 13701 'S2 week high. 70 ‘52 week low 36 Tnterpretati The face value of Adani Power is Rs 10 each. Their market capitalization‘Table No: 4.1.3 Return on Equity of Adani Power for the year ended 2011-2012 ‘SHARE CAPITAL 2180 RESERVE AND SURPLUS Sas NET WORTH ‘6029 ‘PROFIT AFTER TAX (PAT) 294 RETURN ON NET WORTH (a 635] Interpretation: ‘The net worth of Adani Power is Rs.6029. thei profit after tax is -294 ‘and thei return on net wowth is +635. “Table No: 4.14 Key Ratios of Adani Power for the year ended 2011-2012 CURRENT RATIO 023 DEBT EQUITY RATIO. 359 GROSS PROFIT RATIO Ca) 38.68 NET PROFIT RATIO 3) 5.93 INTEREST COVERAGE RATIOADANIPOWER- Line Chart 8 Interpretatio ‘The share price of Adani power is 50 atthe beginning ofthe study. After that price move upto 68, The share price now showing bullish trend afterADANI POWER -Candlestick chart aa | Seng “yen jaabeed “ 1 Interpretation: ‘The chart shows a positive irend of share price of ADANI POWER fier i i aADANI POWER- Moving average chart i” sr a a a a ar Interpretation: 5 day moving average of ADANI POWER cut the SO day movingADANI POWER - RSI Chart Interpretation: RSI chart of ADANI POWER shows the bullish buying trend of the stock. Stock is near to the RSI point 70 . it shows the strength of the stock. This stock touch the 70 level twice during the period of study‘Table No: 42. Share Prive details of Reliance Power for the year ended 2011-2012 Face valve io Market cap i) Bia '52 weak high i '52 week low 38 Interpretation: “The face value of Reliance Power is RS 10 cach. Their market capitalization is Rs 21164 er. The the low for the same is Rs 58, Jnest value for 52 week is Rs | land ‘Table Nu: 42.2 Pay Out Ratio of Reliance Power for the year ended 2011-2012 (EPS(Earing pershare) SS) CS Dividend yield % 0 Interpretation:NETWORTE Toms PROFIT AFTER TAX (PAT) 0 RETURN ON NET WORTH Ci) ass Interpretation: ‘The net worth of Reliance Power is Rs.16103, Their profit after tax is 310 and their return on net worth is.85 ‘Table No: 4.2 Key Ratios of Reliance Power forthe year ended 2011-2012 CURRENT RATION 526] DEBT FQUITY RATIO. 0.95 a AT RATION 300.62| NETFROFTAATIO. 05) 204 80 INTEREST COVERAGE RATIO 325 PRICE EARNING RATIO. T9835 Interpretation : ‘The current ratio of Reliance Power is 45.26 and their debt equity ratio is (0,05. The gross profit ratio is 300.62 pereentage and net profit ratio isReliance Power - Line chart Interpretation: ‘The reliance power stock shows bearish trend in the eurly stage of study, Now the movement of stock prise shows a recovery trend. Share price of RELIANCE POWER is 100 at the beginning of the study. Afier that price down upto 60 level. Now the stock shows recovery trend from the massiveRELIANCEPOWER-- Candlestick chart i & Maa a \ 4 hat Interpretation ‘The reliance power stock shows down trend in the early stage of study. ‘The stock price fall from 101 to 60 during the period of study. Now the stock isin recovery trend,liderpiitalicin: Reliance power - Moving average ChartRELIANCE POWER- RSI Chart Interpretation: RSI chart of Reliance power shows the bullish buying trend . The Stock now move tothe RSI point of 70. itshows the buying trend of the stok ‘eile ccd deans Maa iS,‘TATA POWER ‘Table No: 4.3.1 Share Price details of Tata Power for the year ended 2011-2012 Face value T | Market capitalization ( 21583 '52 week high. 13. ‘52 week low 7 Interpretation: ‘The face value of Tata Power is Rs | each, Their market capitalization is Rs 21583 cr, The highest value for 52 week is Rs 1 13and the low for the same is Rs 87. ‘Table Nor 43.2 1y Out Ratio of Tata Power for the year ended 2011-2012 EPS( Earning per share) 397, Dividend yield % 137Return on Equity of Tata Power for the year ended 2011-2012 SHARE CAPITAL RESERVE AND SURPLUS NET WORTH ‘PROFIT AFTER TAX PAT) RETURN ON NET WORTH Ci Interpretation: ‘The net worth of Tata Power is Rs.11957. Their profit after ay is 1169 land their return on net wort is 10,09 percentage, ‘Table No: 4.34 Key Ratios of Tata Power for the year ended 201 ‘CURRENT RATIO 9s DEBT EQUITY RATIO 0.64 ‘GROSS PROFIT RATIO 32.27 NET PROFIT RATIO. (a) Bot INTEREST COVERAGE RATIO 427 PRICE EARNING RATIO. 22.90 Interpretation ;ua cumrt2 orocet2 letereratetienns: Tata Power -Line Chart oats onfeaa onic ove o1tie‘TATA POWER-Candlestick Chart : \ Ae om Hh . i Wadd,TATA POWER- Moving average Chart 10 ‘~ Interpretation '5 day moving average of Tata power is below the 50 day moving average 1e. The price of this stock is below the support price .The stack price “will show a good trend only after it resist the SO day moving average line.‘TATA POWER - RSI Chart Interpretation: RSL of TATA POWER is 40 in the last period of study it shows the ‘bearish selling trend of stock, The chart shows negative trend of stock price during the period of study. The stock only eut 70 point level oncecESC Table No 4.4.1 Share Price details of CESC for the year ended 2011-2012 Face valve. io | Market capitalization r(o5) Bor 52 week high 345 'S2 week low 252 Interpretation: ‘The face value of CESC is Rs 10 each, Their market capitalization is Rs 4202 er. The highest value for 345 week is Rs 252 and the low for the same is RS 8. Table No 44.2 Pay Out Ratio of CESC for the year ended 2011-2012 f EPS(Eaming per share) 49.46Return on Equity of CESC for the year ended 2011-2012 ‘SHARE CAPITAL 13s, RESERVE AND SURPLUS R06 NET WORTH. con PROFIT AFTER TAX (PAT) 35a RETURN ON NET WORTH (a) 72.10 Interpretation: ‘The net worth of CESC is Rs,6011, Their profit after ax is $54 and their return on net worth is 12.10 Table No 44 Key Ratios of CESC for the year ended 2011-2012 ‘CURRENT RATIO [NET PROFIT RATIO) ey INTEREST COVERAGE RATIO PRICE EARNING RATIO Interpretation :CESC- Line chart teri? OLgeet? chun 9Lfa13 okMursd oLayetd Laud? Interpretatio CESC stock shows bullish trend in its share price. The chart shows theCandlestick Chart of CESC CESC-Candlestick chartChart Nos.a.3 Moving Average Chart of CESC CESC- MOVING AVERAGE CHART 0CESC- RSI Chart Interpretation: RSI of CESC shows positive buying trend of stock. RSI of stock is now above the 70 level, shows the bullish trend in the stock price, The ‘company only reached 30 point level twice during the period of study.‘Table No 4.5.1 Share Price details of NHPC for the year ended 2011-2012 Face valve io ‘Market capitalization @ 28601 | 52 wesk high 29 ‘52 week low is Interpretation: ‘The face value of NHPC is Rs 10 each, Their market capitalization is Rs 24601 cr. The highest value for $2 week is Rs 29 and the low forthe ssame is Rs 14 Table No 45.2 Pay Out Ratio of NHPC for the year ended 2011-2012Al RI AND SURPLUS 2 NET WORTH. 26353 PROFIT AFTER TAX (PAT) 2771 RETURN ON NET WORTH (4) 10.88 Interpretation: ‘The net worth of NHPC is Rs.263$3. Their profit afer tax is 2771 and their return om net worth is 10.88 Table No 454 Key Ratios of NHPC for the year ended 2011-2012 ‘CURRENT RATIO, Ta DEBT EQUITY RATIO 063 ‘GROSS PROFIT RATIO) ‘8405 NET PROFITRATIO. 0) 49.02 INTEREST COVERAGE RATIO 1128 PRICE EARNING RATIO 9.56 Interpretation + ‘The current jo of NHPC is 1.41 and their debt equity ratio is 0.63. TheNHPC Line Chart OLsiget2 GLOKCK? OLluely OLFAbI2 ELAM ObApIIE OFMap TE Interpretation: During the period of study, the price flls from 29 to 18, The first half ofthe study the stock price shows share price trend is downward. The share ecueaed Geil aia tae wels Kean ER Neen ases GeNHPC-Candlestick chart s raat 1 a" aki fig, g™ Me fisorit oLDieR2 LHS OLRDLA OLD} OMAP OLMapB Interpretation ‘The chart shows the bearish movement of stock during the period of study, The first half ofthe study the stock price shows upward trend after ‘share price reached Rs 30, the share price down sharply upto Rs 20.NHPC- Moving average Chart o> 3 > 2 9 PEEPLES * S Interpretation: ‘The chart shows the bearish trend of NHPC stock, The stock now moves below the 50 Day Moving average. The massive fall of share price fromNHPC- RSI Chart Interpretation: SI chart shows bearish selling trend of stock, RSI point of lst period shows 34 point, it give the clear-cut idea of negative movement ofthatShare Price details of Powergrid for the year ended 2011-2012 Face value — Market capitalization im [Bech 5 ‘week low Interpretation: ‘The face value of POWERGRID is Rs 10 each. Their market ‘capitalization is Rs 52084 er. The highest value for $2 weck is Rs 124.45 ‘and the Low for the same is Rs 101.2, Table No 4.6.2 Pay Out Ratio of Powergrid for the year ended 2011-2012 por share Dividend yield % 137 Interpretation: ‘The Farnings Per Share of POWERGRID is 9, their dividend yield ratio is also 1.87.TAX (PAT) RETURN ON NET WORTH (00) Interpretation: ‘The net worth of POWERGRID is Rs.23487, Their profit after tax 3254 and their return on net worth is 14.50, ‘Table No 4.6.1 Key Ratios of Powergrid for the year ended 201 2012 [CURRENT RATIO 074 DEBT EQUITY RATIO 2.10 ‘GROSS PROFIT RATIO a) M81 NET PROFIT RATIO Co) 32.43 INTEREST COVERAGE RATIO 337 PRICE EARNING RATIO 1s Interpretation : ‘The current ratio of POW {GRID is 0.74. and their debt equi 2.10. The gross profit ratio is 90.81 percentage and net profit ratio ‘Ra reemecnane: ‘Theily danense cnveriecsneie ik 507-POWERGRID-Line Chart i Ea rs > > 2 : ° ff & 2 Interpretation: ‘The share price of Powergrid shows a bullish trend during the last periodPOWERGRID-Candlestick chart ws \ Wy : Mi HE ttyl —POWERGRID-Moving average pe fa som ra rd Interpretation: POWERGRID's 5 day moving average eut the support line only once “during the period of study. Now the share price of company is above thePOWERGRID- RSI Chart Interpretation: RSI of powersrid stock is 70 above during the 9 period, after that it feome down into 45 level. 9 period is the idele time to buy POWERGRID stock:The 10 perid. shows 43 show eihter a possative or a negative trend, levelthat doesn'tNTPC Table No 47.1 Share Price details of NTPC for the year ended 2011-2012 Face value C io ‘Market capitalization i 127763 52 week high 175; 52 week low. 136, Interpretation: ‘The face value of NTPC is Rs 10 each, Their market capitalization is Rs 127763 er. The highest value for $2 week is Rs 175 and the low forthe ‘same is Rs 136, Table No47.2 Pay Out Ratio of NTPC for the year ended 2011-2012 EPS(Earing per share) 173 Dividend yield % 258, Interpretation:Return on Equity of NTPC for the year ended 2011-2012 ‘SHARE CAPITAL ws RESERVE AND SURPLUS 65084 NET WORTH 73291 PROFIT AFTER TAX (PAT) 9223 RETURN ON NET WORTH _(% 13.07 Interpretation: ‘The net worth of NTPC is Rs.73291. Their profit after tax is 9223 and their retura om net worth is 13.07 ‘Table No 4.7.4 Key Ratios of NTPC for the year ended 2011-2012 ‘CURRENT RATIO; 20 DEBT EQUITY RATIO 0.66 ‘GROSS PROFIT RATIO) 26.94 NET PROFITRATIO. (%e) 14.76 INTEREST COVERAGE RATIO. B19 PRICE EARNING RATIO. 1126NTPC Line chart Dioe2 OLDeeAD OLibn43 OLfebI3 GLAS Elagr3 OL aoyt8 Interpretation: ‘The stock price NTPC falls in every rise. The stock shows negative trendNTPC- Candlestick chart * Ah | 6 | Myon Ml rai Interpretation: NTPC stock price shows a down trend in the early stage of study.The {ast stage. The stock price NTPC falls stockAInterpretetion:.NTPC-RSI Chart Interpretation: RSI of NTPC stock shows 30 point level in 10° period of study. It shows ‘bearish selling trenel of that particular stock. RSI of th period is above the5. FINDINGS ‘© Table No 4.24 shoves that the profitability ratios are high in RELIANCE POWER while considering other securities selected for he study. ‘© Table No 4.1.3 shows ADANI POWER have negative return on equity. ‘© Table No 4.1.1 indicate that the Current share price of ADANI POWER is affordable one to investors and itis low risk serip. ‘© Table No 4.3.4 shows the Liquidity ratios are affordable in TATA, POWER than any other stocks under study, ‘© Table No 44.2 shows that the CESC have high EPS (49.46 rupees) than other stocks followed by NTPC .(13.75 rupees)Chart No 43.3 and 4.5.3 shows that the TATA POWER, and NHPC, stocks now trading below the critical line of $0 day moving average. Table No 43.1 shows Share price of TATA POWER shows negative trend during the study period, (Chart No 4.1.3 shows FIVE DAY MOVING AVERAG bullish trend in ADANI POWER, RELIANCE POWER & CESC shows @ stocks, MOVING AVERAGE shows mixed trend in all the stocks selected for the study.so we can’t predict the share price trend of power sector as a whole5.2 SUGGESTIONS ‘+ Foniamentals ofall power stock are not strong, as per the financial statement year ended 2012 Movement of TATA POWER, and NHPC shous a weaker tend The stocks now trading below the critical line so that an investor ean move from these stocks ‘+ ADANI POWER, RELIANCE and CESC shows bullish tend in its share price and its advisory o hold these shares ‘= Investor ean buy CESC stack in a long term prospective. ‘Its better to book profit en NTPC & POWER GRID stocks even though they trading above the $0 day moving average (RSI Chart, shows bearish wend) ‘Its advisory to an investor, should not depend only on ane 100}, rather one has gone for other chart pattems to get confirmation for5.3 CONLUSION ‘The study deals with share and share trading gives a goneral idea about the analysis of stocks. The analysis caried on two basis, Fundamental analysis and technieal analysis, Technical analysis shows a shor term trend based on historical data and fundamental analysis helpfal for the de found that the charts prepared on the basis of the share price, with the making for long term inyestinent. From the anal support of technical tools shows all the trends and variations as invrpreted in the theory. In the analysis using moving averuge itis found that if the price is lying above the moving average, the scrip is in a bullish trend if the price lying below the moving average the serip is in boorish trend, Technical analysis ignores the sctual nature of the ‘company. Technical analysis is bused solely on the chat that is to say price and volume information. The investor has to invest wisely on the ‘serip which gives high return with most possible risk