Contents

1] INTRODUCTION OF FUNDAMENTAL ANALYSIS. 2] GLOBAL ECONOMIC ANALYSIS. 4] INDIAN ECONOMY. 5] HOW INDIA WAS AFFECTED BY 2008 CRISIS 6] WHAT IS G7. 7] ROLE OF INDIA IN WTO 8] INDUSTRIAL ANALYSIS. 9] COMPANY ANALYSIS. 10] CONCLUTION 11]RECOMMENDATION
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INTROUCTION OF FUNDAMENTAL ANALYSIS.

Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. When applied to futures and forex, it focuses on the overall state of the economy, interest rates, production, earnings, and management. When analyzing a stock, futures contract, or currency using fundamental analysis there are two basic approaches one can use; bottom up analysis and top down analysis.[1] The term is used to distinguish such analysis from other types of investment analysis, such as quantitative analysis and technical analysis. Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts. There are several possible objectives:

1]to conduct a company stock valuation and predict its probable price evolution,

2]to make a projection on its business performance,

3]to evaluate its management and make internal business decisions,

4]to calculate its credit risk.

GLOBAL ECONOMIC ANALYSIS.

REFERANCE:-GOOGLE.COM The world- or global economy generally refers to the economy, which is based on economies of all of the world's countries, national economies. Also global economy can be seen as the economy of global society and national economies - as economies of local societies, making the global one. It can be evaluated in various kind of ways. For instance, depending on the model used, the valuation that is arrived at can be represented in a certain currency, such as 2006 US dollars. It is inseparable from the geography and ecology of Earth, and is therefore somewhat of a misnomer, since, while definitions and representations of the "world economy" vary widely, they must at a minimum exclude any consideration of resources or value based outside of the Earth. For example, while attempts could be made to calculate the value of currently unexploited mining opportunities in unclaimed territory in Antarctica, the same opportunities on Mars would not be considered a part of the world economyeven if currently exploited in some wayand could be considered of latent value only in the same way as uncreated intellectual property, such as a previously unconceived invention. Beyond the minimum standard of concerning value in production, use, and exchange on the planet Earth, definitions, representations, models, and valuations of the world economy vary widely. It is common to limit questions of the world economy exclusively to human economic activity, and the world economy is typically judged in monetary terms, even in cases in which there is no efficient market to help valuate certain goods or services, or in cases in which a lack of independent research or government cooperation makes establishing figures difficult. Typical examples are illegal drugs and other black

market goods, which by any standard are a part of the world economy, but for which there is by definition no legal market of any kind.

However, even in cases in which there is a clear and efficient market to establish a monetary value, economists do not typically use the current or official exchange rate to translate the monetary units of this market into a single unit for the world economy, since exchange rates typically do not closely reflect worldwide value, for example in cases where the volume or price of transactions is closely regulated by the government. Rather, market valuations in a local currency are typically translated to a single monetary unit using the idea of purchasing power. This is the method used below, which is used for estimating worldwide economic activity in terms of real US dollars. However, the world economy can be evaluated and expressed in many more ways. It is unclear, for example, how many of the world's 6.8 billion people have most of their economic activity reflected in these valuations. In 2011, the largest economies in the world are the United States, China, Japan, Germany, France and the United Kingdom.

Economy overview 2006 - USA leads expansion The economic output of 178 markets expanded by $3.9 trillion during 2006. USA accounted for one-fifth while China accounted for one-ninth of the global output expansion. The economic output of 5 markets contracted by $193 billion. Japan accounted none of the money.
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2007 - China leads expansion The economic output of 182 markets expanded by $6.3 trillion during 2007. China accounted for one-eighth while the USA accounted for onetenth of the global output expansion.

2008 - credit crisis begins The economic output of 171 markets expanded by $5.8 trillion during 2008. China accounted for one-sixth of the global output expansion. The economic output of 11 markets contracted by $267 billion during 2008. UK accounted for one-half while South Korea accounted for two-fifth of the global output contraction. Though the crisis first affected most countries in 2008, it was not yet deep enough to reverse growth. 2009 - credit crisis spreads The economic output of 132 markets contracted by $4.1 trillion during 2009. However, UK was the largest victim accounting for one-eighth while Russia accounted for one-tenth of the global output contraction. The economic output of 50 markets expanded by $781 billion during 2009. China accounted for three-fifth while Japan accounted for onefourth of the global output expansion. 2010 - IMF forecasts recovery The economic output of 138 markets is expected to expand by $4.6 trillion during 2010. China is expected to account for one-sixth and the USA is expected to account for one-ninth of the global output expansion. The economic output of 44 markets is expected to contract by $498 billion during 2010. Despite bailouts, France is expected to account for one-fifth, Spain is expected to account for one-fifth, Italy is expected to account for one-sixth of the global output contraction.
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IMF's economic outlook for 2010 noted that banks faced a "wall" of maturing debt, which presents important risks for the normalization of credit conditions. There has been little progress in lengthening the maturity of their funding and, as a result, over $4 trillion in debt is due to be refinanced in the next 2 years. UK faces worst of global economy The UK will suffer most as the financial crisis causes the worlds rich economies to shrink for the first time since the second world war, according to the International Monetary Fund. The IMF said the financial crisis had proved to be deeper and broader than expected, affecting growth across the developing world as well as rich economies. The IMF predicted global growth to slow to 2.2 per cent next year, down from its previous estimate of 3 per cent, with the rich world economies contracting by 0.3 per cent, as against its former projection of a 0.5 per cent increase. The UK saw by far the sharpest downward revision and the worst projected recession in the rich world, the 2009 forecast being cut 1.2 percentage points to a fall of 1.3 per cent. The fund stressed that because trend output growth in the rich world had slowed over recent decades, the projected downturn was not unprecedented. In terms of undershooting potential, it was comparable to the recessions in 1975 and 1982. But the IMF warned: Financial conditions are likely to remain tight for a longer period and be more impervious to policy measures than previously expected. Olivier Blanchard, the IMFs chief economist, called for fiscal policy to boost economic growth, to complement recent cuts in interest
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rates. Global fiscal expansion is very much needed at this point, he said. Nations representing about half the worlds economy including the US, European countries and China all had room to increase spending or cut taxes, the fund said.

The IMFs economists have carved out a role for themselves as the gloom-mongers of the global economy, but even they have been taken aback by just how badly things have gone. The IMF admitted on Thursday that there had been a few signals of hope over the past week and that attempts to arrest the slump in confidence were beginning to have some effect. But Thursdays revisions in its forecasts came across the board. Three themes dominated the worsening of sentiment since the fund released its last forecasts at its annual meeting in October. First, the financial crisis has continued to deepen in the rich world, with highly indebted economies like the UK particularly vulnerable. Second, commodity prices have fallen, which has hurt oil exporters like Russia and countries in sub-Saharan Africa dependent on selling raw materials abroad. Finally, a general souring of sentiment has hit all emerging markets, particularly those dependent on foreign investors to finance current account deficits. The mood changes so quickly in global equity and bond markets, and hence affects so rapidly the outlook for countries dependent on external financing, that almost any firm forecast risks being reversed rapidly. Until a day or two ago, investor sentiment surrounding the developing world had actually been improving rapidly for a week. Emerging market government bonds had experienced their biggest rally since 2001. A key
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measure of risk, JP Morgans so-called EMBI+ index, showed the extra returns demanded by investors for holding emerging market assets reducing from 8.6 percentage points in late October to below 6 percentage points.

The 2008 economic crisis.

INTRODUCTION.
The global financial crisis, brewing for a while, really started to show its effects in the middle of 2007 and into 2008. Around the world stock markets have fallen, large financial institutions have collapsed or been bought out, and governments in even the wealthiest nations have had to come up with rescue packages to bail out their financial systems. On the one hand many people are concerned that those responsible for the financial problems are the ones being bailed out, while on the other hand, a global financial meltdown will affect the livelihoods of almost everyone in an increasingly inter-connected world. The problem could have been avoided, if ideologues supporting the current economics models werent so vocal, influential and inconsiderate of others viewpoints and concerns.

It began with this

The crisis has reached dangerous proportions. It began with the burst of the US housing bubble in 2004, after a long period of steadily increasing house prices. More families were being able to take out mortgages than previously possible. Lenders had started engaging in a practice called subprime lending - lending to risky borrowers who would not normally be qualified for a mortgage to buy a home. The subprime mortgages typically came with a low interest for the first few years, and then a drastic increase. The risks were usually not fully explained, and many borrowers were told they could easily refinance the mortgage in a few years to keep their interest rate low. Economists warned of the dangers, but for the most part nobody in the US wanted to interrupt the party atmosphere of the housing bubble. Everyone seemed
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to be making money: construction companies, realtors, banks and materials firms. Happy consumers were able to be home owners for the first

time in their lives. The industry went basically unwatched by the US government, after decades of steady deregulation led by the Republican party. Other peoples moneypartys over

HenneseyLeroyles Other peoples money, 1898 | (Image: Library of Congress/ pingnews.com/ Flickr)But in 2005-2006, it came time to pay the piper. Interest rates on the subprime mortgages shot up. Many new home owners were unable to pay or refinance. The crisis should have been confined to US homeowners. Unfortunately the banks and lenders making these loans had sold the debt to investors. The debt assets had been diced up and sold to other investors and banks around the world, in complicated financial packages that few people seemed to fully understand. During 2007, nearly 1.3 million US housing properties were subject to foreclosure activity, up 79% from 2006. Nobody seemed to have any ideas who owned these worthless debts, spread out throughout the whole worldwide financial system. Suddenly banks werent willing to lend to each other any longer, resulting in a credit crunch, a period where there is little liquidity (or money) in the system because nobody is lending. The losses started to roll in. By July 2008, major banks and financial institutions around the world reported losses of approximately $435 billion. Take a different rise from the credit crunch

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Today, banks and other financial institutions cant get any credit and are stuck with bad assets on their books. Many have had to declare bankruptcy or are close to doing so. Governments have had to rescue these institutions for fear of what their collapse would mean to the broader economy. These institutions have included Freddie Mac and Fannie May in the US, insurance giant AIG, Northern Rock in the UK, and Fortis and Dexia in Belgium. Anticipated future bankruptcies has prompted the US government to prepare a $700 billion bailout package to rescue them as they happen. The UK may be preparing a similar package.

Commodity boom causes bust

The subprime mortgage crisis and credit crunch arent the only factors in the 2008 economic crisis. Oil prices are at a record high, driven by the increasing energy needs of China and Indias to dream about | (Image: Ed Yourdon/ Flickr)emerging economies. This has dramatically affected consumers in North America and Europe in two ways. Consumers have been forced to pay much higher prices for fuel to fill their cars and heat their homes, and at the same time the increased food cost has driven up food prices dramatically, because it takes fuel to produce and transport food. Food has become so much more expensive in the developing world that it has resulted in food riots in some instances. The current decade has seen a significant commodities boom, after a commodities depression in the 1980s and 1990s saw prices at extreme lows. By 2008, oil had reached a level that people could no longer afford, going above $100 a barrel for the first time in history in January 2008. But even this high seemed like nothing by the time July rolled around, when oil reached $147 a barrel. There has been a rapid slowdown in North American and European economies. On 30 September the UK revealed that it had zero growth for the past quarter.
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Along with Germany, it should officially be in recession by the end of 2008. The eurozone as a whole is seeing some very dire economic indicators ride out the storm, coming up with a strategy to bail out failing banks in the mean time. Fuel prices are never going to return to the levels experienced in the past. The economic crisis is the result of a man-made mistakes in the US and the natural rise of economies in the east. Fuel prices are never going to return to the levels experienced in the past, and the world must learn to adjust to this new reality. At the same time, the credit crisis - which was created in the US - can only be solved by the US. There is little Europe can do but stand by and try to ride out the storm.

INDIAN ECONOMY. OVERVIEW:From Wikipedia, the free encyclopedia

The Economy of India is the eleventh largest in the world by nominal GDP and the fourth largest by purchasing power parity .The country's per capita GDP is $3,290 in 2010. Following strong economic reforms from the socialist inspired economy of a post-independence Indian nation, the country began to develop a fast-paced economic growth, as free market principles were initiated in 1990 for international competition and foreign investment. Economists predict that by 2020, India will be among the leading economies of the world. India's top five trade partners are UAE, China, USA, Saudi Arabia and Germany.
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India was under social democratic-based policies from 1947 to 1991. The economy was characterised by corruption and slow growth. Since 1991, continuing economic liberalisation has moved the country toward a market-based economy. A revival of economic reforms and better economic policy in first decade of the 21st century accelerated India's economic growth rate. In recent years, Indian cities have continued to liberalise business regulations. India's large service industry accounts for 57.2% of the country's GDP while the industrial and agricultural sector contribute 28% and 14.6% respectively. Agriculture is the predominant occupation in India, accounting for about 52% of employment. The service sector makes up a further 34%, and industrial sector around 14%. The labour force totals half a billion workers. Major agricultural products include rice, wheat, oilseed, cotton, jute, tea, sugarcane, potatoes, cattle, water buffalo, sheep, goats, poultry and fish. Major industries include telecommunications, textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, information technology-enabled services and pharmaceuticals. However, statistics from a 2009-10 government survey, which used a smaller sample size than earlier surveys, suggested that the share of agriculture in employment had dropped to 45.5%.

Previously a closed economy, India's trade and business sector has grown fast. India currently accounts for 1.5% of world trade as of 2007 according to the WTO. According to the World Trade Statistics of the WTO in 2006, India's total merchandise trade was valued at $294 billion in 2006 and India's services trade inclusive of export and import was $143 billion. Thus, India's global economic engagement in 2006 covering both merchandise and services trade was of the order of $437 billion, up by a record 72% from a level of $253 billion in 2004. India's total trade in goods and services has reached a share of 43% of GDP in 200506, up from 16% in 199091.
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PRE LIBRELISATION.
Indian economic policy after independence was influenced by the colonial experience, which was seen by Indian leaders as exploitative, and by those leaders' exposure to democratic socialism as well as the progress achieved by the economy of the Soviet Union. Domestic policy tended towards protectionism, with a strong emphasis on import substitution, industrialisation, state intervention, a large public sector, business regulation, and central planning, while trade and foreign investment policies were relatively liberal. Five-Year Plans of India resembled central planning in the Soviet Union. Steel, mining, machine tools, water, telecommunications, insurance, and electrical plants, among other industries, were effectively nationalised in the mid-1950s. Jawaharlal Nehru, the first prime minister of India, along with the statistician Prasanta Chandra Mahalanobis, formulated and oversaw economic policy during the initial years of the country's existence. They expected favorable outcomes from their strategy, involving the rapid development of heavy industry by both public and private sectors, and based on direct and indirect state intervention, rather than the more extreme Soviet-style central command system.The policy of concentrating simultaneously on capital- and technology-intensive heavy industry and subsidizing manual, low-skill cottage industries was criticised by economist Milton Friedman, who thought it would waste capital and labour, and retard the development of small manufacturers. The rate of growth of the Indian economy in the first three decades after independence was derisively referred to as the Hindu rate of growth, Since 1965, the use of high-yielding varieties of seeds, increased fertilisers and improved irrigation facilities collectively contributed to the Green Revolution in India, which improved the condition of agriculture in India by increasing productivity of food as well as commercial crops, improving crop patterns and strengthening forward and backward linkages between agriculture and industry. However, it has also been criticised as an unsustainable effort, resulting in the
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growth of capitalistic farming, ignoring institutional reforms and widening income disparities.

Globalization In India
Globalization in India has allowed companies to increase their base of operations, expand their workforce with minimal investments, and provide new services to a broad range of consumers. The process of globalization has been an integral part of the recent economic progress made by India. Globalization has played a major role in export-led growth, leading to the enlargement of the job market in India. One of the major forces of globalization in India has been in the growth of outsourced IT and business process outsourcing (BPO) services. The last few years have seen an increase in the number of skilled professionals in India employed by both local and foreign companies to service customers in the US and Europe in particular. Taking advantage of Indias lower cost but educated and English-speaking work force, and utilizing global communications technologies such as voice-over IP. As a new Indian middle class has developed around the wealth that the IT and BPO industries have brought to the country, a new consumer base has developed. International companies are also expanding their operations in India to service this massive growth opportunity. Notable examples of international companies that have done well in India in the recent years include Pepsi, Coca-Cola, McDonalds, and Kentucky Fried Chicken, whose products have been well accepted by Indians at large.

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Globalization in India has been advantageous for companies that have ventured in the Indian market. Indian companies are rapidly gaining confidence and are themselves now major players in globalization through international expansion. From steel to Bollywood, from cars to IT, Indian companies are setting themselves up as powerhouses of tomorrows global economy.

WHAT LED TO 1991 ECONOMIC CRISES.

India started having balance of payments problems since 1985, and by the end of 1990, it was in a serious economic crisis. The government was close to default, its central bank had refused new credit and foreign exchange reserves had reduced to such a point that India could barely finance three weeks worth of imports. India had to airlift its gold reserves to pledge it with IMF for a loan Causes and consequence The economic crisis was primarily due to the large and growing fiscal imbalances over the 1980s. During mid eighties, India started having balance of payments problems. Precipitated by the Gulf War, Indias oil import bill swelled, exports slumped, credit dried up and investors took their money out. The gross fiscal deficit of the government rose from 9.0 percent of GDP in 1980-81 to 10.4 percent in 1985-86 and to 12.7 percent in 1990-91. For the center alone, the gross fiscal deficit rose from 6.1 percent of
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GDP in 1980-81 to 8.3 percent in 1985-86 and to 8.4 percent in 1990-91. Since these deficits had to be met by borrowings, the internal debt of the government accumulated rapidly, rising from 35 percent of GDP at the end of 1980-81 to 53 percent of GDP at the end of 1990-91 Devaluation of Indian Rupee started in 1960s due to the wars with China (1962) and Pakistan (1965). Due to large government budget deficits, drought there was a sharp rise in prices due to inflation. The Indian Government was forced to start liberal policies in order to stabilize the economy, which in turn resulted into the huge devaluation of the Indian Rupee. Once again, the government decided to devaluate the rupee. Due to the currency devaluation the Indian Rupee fell from 17.50 per dollar in 1991 to 26 per dollar in 1992. The investor confidence also played significant role in the sharp exchange rate depreciation.

POST LIBRELISATION
In response, Prime Minister Narasimha Rao, along with his finance minister Manmohan Singh, initiated the economic liberalisation of 1991. The reforms did away with the Licence Raj (investment, industrial and import licensing), reduced tariffs and interest rates and ended many public monopolies, allowing automatic approval of foreign direct investment in many sectors. Since then, the overall direction of liberalisation has remained the same, irrespective of the ruling party, although no party has tried to take on powerful lobbies such as the trade unions and farmers, or contentious issues such as reforming labour laws and reducing agricultural subsidies. By the turn of the century, India had progressed towards a free-market economy, with a substantial reduction in state control of the economy and increased financial liberalisation. This has been accompanied by increases in life expectancy, literacy rates
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and food security, although the beneficiaries have largely been urban residents. While the credit rating of India was hit by its nuclear tests in 1998, it has since been raised to investment level in 2003 by S&P and Moody's. In 2003, Goldman Sachs predicted that India's GDP in current prices would overtake France and Italy by 2020, Germany, UK and Russia by 2025 and Japan by 2035. By 2035, it was projected to be the third largest economy of the world, behind the US and China. India is often seen by most economists as a rising economic superpower and is believed to play a major role in the global economy in the 21st century.

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HOW WAS INDIA AFFECTED BY 2008 CRISIS?

Abstract The global crisis has hit India through a sudden stop of capital inflows and a collapse of both external and domestic demand. The growth of the economy dropped to 6.7 per cent in 2008-09 (April-March) from 9.0 per cent in the previous year and is projected to decline further in 2009-10 to about 5.0 per cent including the bad monsoon effect. The aggressive monetary and fiscal measures undertaken so far will not be able to secure a sound recovery for the Indian economy with the global economy unlikely to revive its growth soon. A strong recovery of growth to 8-9 per cent, however, is possible for India if it unveils a second round of reforms similar to what it had done in the early 1990s.

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Background: India on the Eve of the Crisis : Indias engagement with the global economy became deeper from the 1990s. Totalmerchandise trade which was hardly 15 per cent of Indias GDP in 1990-91 (AprilMarch) rose by nearly two and half times to 36 per cent of GDP in 2007-08; invisibles trade rose about fourfold from just 5 per cent of GDP to 19 per cent in the same period; and capital flows increased even faster at more than fivefold from 12 per cent of GDP to65 per cent of GDP over the same period. Just take the case of exports. Though the ratio of export of goods and services in Indias GDP was lower at 23 per cent in 2006 than that in China at 40 per cent (World Bank, 2008), the contribution of export demand to GDP growth in India is not that much lower in comparison with China. This is so because the consumption-GDP ratio is much higher for India at 58 per cent (against Chinas low 33 per cent) and the import-GDP ratio lower at 26 per cent (32 per cent for China) making the Keynesian income multiplier higher in India. Rough calculations indicate that a 10 per cent increase in export demand can raise .the GDP by 4 per cent in China, other things being equal, whereas in India the rise in GDP is 3 per cent. The deepening global integration of India has made it vulnerable to the global financial crisis. However, three factors helped India to cope with the crisis and soften the blow. They are: (1) the robust, well capitalized and wellregulated financial sector; (2) gradual and cautious opening up of the capital account; and (3) the large stock of foreign reserves.
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Slowing Economy Prior to the Crisis : Indian economy began to slow down in 2007-08 (April-March) after reaching a GDP growth of 9.8 per cent in the last quarter of 2006-07. In fact, Indian economy grew at an annual average rate of 8.8 per cent during the five years ending 2007-08. In the first half of the financial year 2008-09, the growth rate dropped to 7.8 per cent. The pre-crisis slowdown of the economy can be attributed to the tightening of monetary policy right from September 2004 in response to the fear that the Indian economy had been overheating and inflation rising. The monetary tightening became harder in 2006-07 and later in early 2008-09 as the huge rise in world commodity prices pushed Indias inflation also high. Spread of Crisis to India : The concept of sudden stop was first introduced by Dornbusch et al. (1995) and later given analytical framework by Calvo (1998) to examine the impact of a sudden and largely unexpected cut-back in foreign capital inflows to emerging economies. This is reminiscent of the bankers old saying that its not speed that kills, its the sudden stop(Dornbusch, 2001). Calvo (2009) noted the likelihood of India going through a sudden stop episode with the onset of the global crisis. The chart below depicts the various stages in the process of the spread of the global financial crisis to India within the framework of the sudden stop analysis.
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The first impact of the global crisis on India was felt in the stock market in January 2008. This came through the reversal of inflows from foreign institutional investors (FIIs) into the country. India had received about US$ 17.7 billion as net equity investment inflows from FIIs during 2007. This turned into a net disinvestment of US$ 13.3 billion during the period from January 2008 to February 2009.

This was the direct result of the massive DEleveraging of US banks after the financial meltdown. The FIIs withdrew funds from all over the emerging markets for meeting the liquidity requirements of their principals in the US.The sudden withdrawal of FIIs from the Indian stock market brought about a crash in the market in January 2008. The benchmark stock price index, the BSE Sensex, plummeted from 20,873 on 8 January to 9093 on 28 November 2008, a 56 per cent fall over a period of 11 months. The fall in Wall Street started two months before in November 2007, but the intensity of the market crash taking place after a lag in Dalal Street (Indias stock exchange) had been much large.capital inflows under external commercial borrowings, short-term trade credit and external borrowing by banks dropped sharply from April 2008. There was a huge return flow of capital from India in the second half of the year with regard to short-term trade finance and bank borrowings to the extent of US$ 9.5 billion and US$ 11.4 billionrespectively. The crisis then moved to the foreign exchange market . The rupee began to tumble from end-April 2008 to November 2008 by about 20 per cent . The Reserve Bank of India intervened by selling dollars to smoothen the fall of the rupee. The heavy selling led to a massive
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depletion of the stock of reserves from US$ 315 billion in May 2008 to US$ 246 billion in November 2008. A part of the loss of reserves had been due to valuation changes as the dollar appreciated against other reserve currencies but still the actual depletion of official reserves has been quite large during this period. By mid-September 2008, the crisis gripped Indias money market . The drying up of funds in the foreign credit markets led to a virtual cessation of external commercial borrowing for India including the access to short-term trade finance. The collapse of stock market ruled out the possibility of companies raising funds from the domestic stock market. Indian banks also lost access to funds from abroad, as interbank borrowing seized up in the US and Europe.

And, instead, banks had to send funds to their branches abroad in those countries. All these put heavy pressure on domestic banks leading to a liquidity crisis from mid-September to end-October 2008 and this was reflected in the inter-bank call money markets where the call money rates rose to 20 percent. The current account of Indias balance of payments had shown strong growth in the first half of 2008-09: merchandise exports grew by 35 per cent, imports by 45 per cent , software exports by 38 per cent, and private transfers (remittances) by 41 per cent . In the second half of 2008-09, these dramatically changed: merchandise exports declined by 18 per cent, imports by 11 per cent. The growth in software exports dropped to less than 4 per cent and remittances declined in absolute terms by about 20 per cent in the
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second half of 2008-09. Thus the impact of the global crisis manifested itselfin the real sector through the collapse of Indias trade sector .Going back to the financial sector, domestic banks responded to the sudden loss of different avenues of funds for the Indian commercial sector and increased their lending during the period of credit crunch. In September and October 2008, bank finance (nonfood credit and investments in shares, bonds, debentures, commercial paper, etc.) expanded more than the previous year partly compensating for the drying up of funds From. The crisis spread to the domestic credit markets. The real economy deteriorated from September 2008 shown first by the sharp fall in export growth to 10 per cent in that month from about 35 per cent during April-August 2008, and negative growth thereafter; virtually negligible or negative growth in industrial output from October 2008; and negative growth in central tax revenue collection alsofrom October 2008. Business and consumer confidence began to ebb leading to a decline in overall demand. By November 2008, the situation had fundamentally transformed. Expansion of bank finance to the commercial sector slumped to Rs. 609 billion during the four-month period, November 2008 to February 2009, just about a quarter in comparison with the expansion

of Rs. 2,362 billion during the same period a year ago (Chart 6). This 8is primarily due to a sharp fall in demand for funds as investment and consumption dropped. This is also partly due to banks becoming extremely risk averse with the perception of default rising considerably.

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Policy Response The major policy response to the crisis came in the form of loosening of the monetary policy and administering fiscal stimulus packages. There were a few other measures like relaxation of external commercial borrowing rules, raising the cap of FII investment in debt and permission given to India Infrastructure Financing Company Limited (IIFCL) infloating tax-free bonds for infrastructure funding, etc. Monetary Measures Monetary policy remained in the tightening mode till end-August 2009. In midSeptember the central bank started relaxing liquidity but no cuts were made yet in policy rates. Inflation measured in terms of wholesale price index (WPI) peaked at 12.9 per centin early August 2008 and remained high for some time. From mid-September to till end October 2008 the economy was in the grip of a serious liquidity crisis and credit crunch as detailed earlier. The Reserve Bank of India (RBI) acted aggressively from midOctober to ease the situation by a series of rate cutting and liquidity injecting measurestill April 2009. Through successive steps, the RBI brought down cash reserve ratio (CRR) from 9 to 5 per cent, statutory liquidity ratio (SLR) from 25 to 24 per cent, the repo rate from 9 to 4.75 per cent and reverse repo rate from 6 to 3.25 per cent.

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Growth Prospects, 2009-10 : Indias GDP growth came down to 6.7 per cent in 2008-09 from 9 per cent in the previous year. This drop in growth is the combined effect of monetary tightening till end August 2008, high inflation (induced by the hike in world commodity prices) and the global crisis. The fiscal expansion in the second half of financial year provided some support and mitigated the contractionary impact of the other factors. The monetaryeasing in the second half of the year appeared to be too early to have any impact till the end of 2008-09.

Signs of Recovery : The current year, 2009-10 has shown some signs of recovery. Industrial output which virtually stagnated in the second half of 2008-09 has shown positive growth of 3.7 per cent in the first quarter of 2009-10. The group of six core industries consisting of power, coal, steel, cement, crude oil and refinery products has improved with its composite index growing at 4.8 per cent in the first quarter of 2009-10. The purchasing managers index (PMI) has been above 50 (showing expansionary conditions) in the last few months. There has been a strong recovery of the stock market and a substantial rise in capital 12market mobilization from March 2009 onward. The Reserve Bank of Indias business expectations index for July-September 2009 has crossed the neutral 100-mark. Also, corporate profits have recovered strongly in the last quarter of 2008-09 and the first quarter of 2009-10
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with their growth at 15 per cent and 17.5 per cent respectively in contrast to sharp declines in the previous two quarters. Some Strong Negative Signals : The sharp drop in exports and imports has continued at an average annual rate of 29 per cent and 35 per cent respectively during April-July 2009. Sales of commercial vehicles have declined at an average annual rate of 16 per cent during April-June 2009. Central government net tax revenue receipts have fallen by about 19 per cent per annuam in the first quarter of 2009-10. While profit growth of the corporate sector had been good in the last two quarters, that did not reflect healthy sales growth. Companies had been able to show high profit growth as input and interest costs have fallen and there had been a rise in treasury incomes and asset sales. Growth in corporate sales turned negative in the last quarter of 2008-09 and increasingly so in the first quarter of 2009-10, indicating the persistence of low demand. Further more, new investment announcements had fallen substantially during the first quarter of 2009-10 to less than a fourth of average in the previous four quarters (CMIE, 2009). The central government budget for 2009-10 appeared to be expansionary. However, it projected an expenditure growth of only 13 per cent in 2009-10 as against 33 per cent in 2008-09. Revenue growth is projected at a higher rate of 9 per cent compared to the previous years revenue growth of less than 4 per cent (Table 6). Therefore, it is more appropriate to say that there has not been much extra fiscal stimulus in 2009-10.

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WHAT IS G7
The G7 (also known as the G-7) is the meeting of the finance ministers from a group of seven industrialized nations. It was formed in 1976, when Canada joined the Group of Six: France, Germany, Italy, Japan, United Kingdom, and United States. As an economic and political group of the seven largest developed countries, this powerful group of nations does not include any developing nations. Based on forecasts by PricewaterhouseCoopers LLP published in early 2010, the G-7 will be eclipsed in economic size by the world's largest emerging markets (E-7) within two decades, led by China. In 2000, the G-7's GDP was twice as large as the E-7 and in 2010 the gap has shrunk to 35 percent. The combined GDP of E-7 (China, India, Brazil, Russia, Mexico, Indonesia, and Turkey is projected to match the G-7 around 2019. The finance ministers of these countries meet several times a year to discuss economic policies. Their work is supported by regular, functional meetings of officials, including the G7 Finance Deputies. It is not to be confused with the G8, which is the annual meeting of the heads of government of the aforementioned nations, plus Russia. The G7 held a meeting on April 11, 2008, in Washington D.C. met again on October 10, 2008, in Washington D.C., and then met again on February 14, 2009, in Rome, to discuss the global financial crisis of 2007-2010. The group of finance ministers has pledged to take "all necessary steps" to help stem the crisis. Japanese Finance Minister Shichi Nakagawa's behavior at a press conference for the latter meeting, where he allegedly behaved as if intoxicated, was the subject of criticism from the Japanese and international press.

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ROLE OF INDIA IN WTO

World Trade Organization The World Trade Organization (WTO) is a global international organization dealing with the rules of trade between nations. The work of WTO moves around WTO agreements, negotiated and signed by the bulk of the world's trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business. Role of India in WTO India is a founder member of the General Agreement on Tariffs and Trade (GATT) 1947 and its successor, the World Trade Organization (WTO), which came into effect on 1.1.95 after the conclusion of the Uruguay Round (UR) of Multilateral Trade Negotiations. India's participation in an increasingly rule based system in the governance of international trade is to ensure more stability and predictability, which ultimately would lead to more trade and prosperity for itself and the 149 other nations which now comprise the WTO. According to the WTO Secretariat Report, along with the policy statement by the Government of India, India is expected to snatch most of the business deals that are presently catering the developed nations which includes major service based industries like telecom, financial services, infrastructure services such as transport and power. The increase in availability and reduction in tariffs has prompted many developed nations to go for business with India especially in IT and ITeS industry. If the trend continues then by 2025, India is expected to cater to the software and services demands of major giants of the business world. Analyzing the present relationship with the promising economic growth of India, one can be sure that India is going to enjoy a very candid and bright relationship with WTO and associated member nations by 2025.
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INDUSTRIAN ANALYSIS New challenges faced by metal sector.

Mumbai, India, 1st October, 2010 - Manufacturing excellence is the need of the day and manufacturing industries are constantly exploring new initiatives and technologies not only to remain competitive in the market, but also to sustain their growth and combat challenges faced. The Metals industry is no exception in this respect; it plays an important role in any economy because of its influence and application in a number of sectors such as chemical, engineering, agriculture, automobiles, infrastructure, electronics, and other manufacturing sectors. Frost & Sullivan's study on manufacturing excellence in the Metals sector delves into the importance of the metals industry, its drivers and challenges, and illustrates some of the good manufacturing practices in this sector. Asia accounts for nearly 56 percent of the total world crude steel production. India is the primary producers' market in the ferrous industry, which is oligopolistic and dominated by two large integrated producers - the Steel Authority of India Limited (SAIL) in the public sector and Tata Iron and Steel Company (TISCO) in the private sector. However, the industry is highly fragmented in the downstream sector of secondary producers both in China and in India. Non-ferrous metals industries include a variety of metals like aluminium, copper, zinc, lead, tin, etc. Among the non-ferrous base metals, Aluminium, the 'poor man's silver', has found wide application in various sectors like automotive, aviation, railways, electricity, etc., due to its properties such as light weight, good conducting capabilities, and long durability. Overall, the non-ferrous Metals industry in Asia is highly fragmented and yet to exploit its full potential. Growth drivers seen in the metal sector are Government policies, consolidation, favorable conditions and growing demand and
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consumption. Under Government policies, it is been noted that up to 100 percent Foreign Direct Investment (FDI) is allowed under the automatic route for mining of metal ores in India. FDI policies have made global leaders like Arcelor-Mittal and POSCO evince interest in setting up plants in India. Moreover, thrust on

infrastructure by the Government of India (GoI) is expected to boost steel demand and the Government has earmarked 46 percent of total plan allocations in the Union Budget (2010-11) towards i The challenges faced by this sector are remote locations of mineral deposits, protectionist tendencies by other economies, rising cost of raw materials, highly unorganized metal producers sector, adoption of latest technologies still in nascent stages, lack of adoption of scientific mining techniques and inadequate availability and poor quality of coking coal. To overcome the challenge of poor quality of coking coal, industries are importing high-cost coking coal from Australian and Indonesian coalfields. Despite large-scale imports, demand for coal has continuously outstripped supply. The non-ferrous industry sector is facing a serious threat of shortage of resources, due to which countries like China and India have become net importers of non-ferrous metals. With rapid increase in the consumption pattern of metals, recycling of metals is crucial in meeting forecast metal demand. Metal recycling is environmentally benign and requires much lesser capital and energy for production. However, the recycling industry in Asia is yet to gear up fully to meet this demand and is highly reliant on importing metal scrap because of its unorganized scrap metals sector.

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34

COMPANY ANALYSIS OF STERLITE INDUSTRY OVERVIEW:Sterlite Industries India Limited (SIIL) is the principal subsidiary of Vedanta Resources plc, a diversified and integrated FTSE 100 metals and mining company, with principal operations located in India and Australia. Sterlites principal operating companies comprise Hindustan Zinc Limited (HZL) for its fully integrated zinc and lead operations; Sterlite Industries India Limited (Sterlite) and Copper Mines of Tasmania Pty Limited (CMT) for its copper operations in India/Australia; and Bharat Aluminium Company (BALCO), for its aluminium and alumina operations and Sterlite Energy for its commercial power generation business. Sterlite is India's largest non-ferrous metals and mining company and is one of the fastest growing private sector companies. Sterlite is listed on BSE, NSE and NYSE. It was the first Indian Metals & Mining Company to list on the New York Stock Exchange. Sterlite has continually demonstrated its ability to deliver major value creating projects, offering unparalleled growth at lowest costs and generating superior financial returns for its shareholders. At the same time, it ensures that its expansion projects meet high conservative financial norms and do not place an unwarranted burden on its balance sheet and financial resources.

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A majority of companys operations are certified to the International Standards like ISO 9001, ISO 14001 and OHSAS . SIIL laboratories at Tuticorin and Silvassa have been recognized with ISO 17025:2005 certification from National Accreditation Board for Testing and Calibration Laboratories . The company is LME approved copper tester. Our copper products meet the requirement of Restriction of Hazardous Substances and certified by Underwriters Laboratories Inc. SIILs Central lab at Silvassa is a GoI approved R&D laboratory. The company has also won numerous awards for safety and environment.

Sterlite develops a diverse portfolio of mining and metals businesses to provide attractive returns to its shareholders whilst carrying out its activities in a socially and environmentally responsible manner and creating value for the communities where it operates. As one of the largest metals and mining groups in India, Sterlite remains continually committed to managing its business in a socially responsible manner. The management of environment, employees, health and safety and community issues, in respect of its operations is central to the success of

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1986 Sterlite- Cables Limited, acquires the Shamsher Sterling Corporation, changes the name to Sterlite Industries ( India) Limited.

1988 - Sterlite Industries makes an initial public offering of its shares on the Indian stock exchange.

1991 - Sterlite Industries establishes Indias first continuous copper rod plant.

1997 - Commissions first privately developed copper smelter in India at Tuticorin in Tamil Nadu.

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1999 - Acquires Copper Mines of Tasmania Pty Ltd.

- Acquires Thalanga Copper Mines Pty Ltd.

2005 - Expansion of Tuticorin Smelter to 300,000 TPA and Successful ramp up of ISA furnace in a record period of 45 days.

2006

- Expansion on Tuticorin smelter to 400 KTPA through innovative debottlenecking.

2007 - Sterlite Industries primary listing on NYSE in June 2007

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BUISNESS REVIEW
Sterlite is the leading copper producer in India. In 2007-08, we produced 339,294 tonnes of copper. Our highest ever production. The copper business comprises smelting and processing of copper and production of its byproducts. Our operations include a smelter, refinery, phosphoric acid plant, sulphuric acid plant and copper rod plant at Tuticorin in the state of Tamil Nadu in southern India; and a refinery and two copper rod plants at Silvassa in the Union territory of Dadra and Nagar Haveli in western India. In addition, we own the Mt. Lyell copper mine at Tasmania in Australia, which produces a clean concentrate that is valuable in the smelting process, to meet around 8% of our copper concentrate requirements at Sterlite. The Tuticorin smelter was in lowest cost quartile among all copper smelting operations in the world; and the refineries at Tuticorin and Silvassa were globally ranked seventh-lowest and eighth-lowest in production costs. Unit Costs Unit conversion costs, which consist of costs of smelting and refining, have reduced significantly to 1.8 cents per lb in 2007-08, compared to 6.1 cents per lb last year. Higher energy prices and fixed cost have been offset by better byproduct realisation and substantial operational recoveries. The sharp reduction in unit cost of production reflects our relentless focus on this area. We have taken up various TQM programmes which should result to further improvements in process and technical efficiency. Given our growing output of byproducts, especially sulphuric acid, and our skills in selling these at best possible prices, we hope to achieve a state where the revenue obtained from by-product sales will exceed the
39

total cost of production thus achieving negative unit cost of production in the coming years.

Treatment Charges and Refining Charges (TC/RC) 2007-08 witnessed a tightening in the global concentrate market, mainly due to cutback in production of the second largest mine in the world combined with increased refining capacities and aggressive buying of concentrates in China. Spot markets were extremely firm. During fourth quarter of 2007-08, TC ruled at around US$ 20 per tonne of concentrate, and RC at 2 cents per lb of copper (i.e. around US$ 110 per tonne). This resulted in a reduction in TC/RC compared to 200607. Negotiations for the 2008 Annual Frame Contracts for concentrates have been completed and the benchmark TC/RC has been established at 45/4.5 (i.e. US$ 45 per tonne of concentrate for TC and US cent 4.5 per lb of copper for RC) with various improvements in the side terms such as quotation period, payment terms and gold/silver refining charges. Sterlite has concluded all its annual negotiations around similar levels with substantial improvements on side terms. Even so, the concentrate market is expected to be in a state of deficit for next couple of years. This may result in further softening of the TC/RC terms for the Company in the near term. Sales: Copper The Companys efforts towards market development in India have paid dividends. Our domestic sale has
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increased by 35% to 157,071 tonnes in 2007-08 compared to previous year, and we accounted for 29% of the market in India. We also exported 180,035 tonnes of copper cathodes and copper rods, to our key overseas markets the Middle East, China, Japan, Philippines and Thailand. We continue to develop a sizeable customer base for the export of copper rods.

Financial Performance Revenues from our copper business rose by 8% to Rs. 12,658 crore in 2007- 08. However, despite major reductions in the cost of production, the combined effect of a 50% fall in TC/RCs, over 11% appreciation in the rupee against the US dollar and increasing fuel prices led to a 30% reduction in operating profits (EBIT) to Rs. 998 crore.

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PRODUCT LISTING MAIN PRODUCT

Copper Cathode Continuos Cast Rods (CCR)

BY PRODUCTS
Sulphuric Acid Phosphoric Acid HydroFluoro silicic Acid Gypsum Ferro sand Slime

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MANAGEMENT

Mr. Anil Agarwal Chairman

Mr. Agarwal, who founded the Vedanta/Sterlite group in 1976, is our Chairman and was appointed to our Board of Directors in 1978. Based in the United Kingdom, he is also the Executive Chairman of Vedanta Resources Plc and the Director of BALCO, HZL, VAL. He has over 30 years of experience as an industrialist and has been instrumental in our growth and development since our inception.

Mr. Navin Agarwal - Executive Vice-Chairman

Mr.Agarwal was appointed to our Board of Directors in August 2003. His responsibilities include executing our business strategy and monitoring the overall performance and growth of our organisation. He is also the Chairman of KCM and MALCO, Deputy Executive Chairman of Vedanta Resources Plc and Director BALCO, HZL, VAL. .

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Mr. Berjis Minoo Desai - Non - Executive Director

Mr. Desai, is a Non-executive Director and was appointed to our Board of Directors in January 2003. He holds a Masters Degree in law from the University of Cambridge and has been the managing partner of Messrs J. Sagar Associates since 2003.

Mr. Gautam Bhailal Doshi - Non Executive Director

Mr. Doshi, is an Independent Nonexecutive Director and was appointed to our Board of Directors in December 2001. Since August 2005, he has been employed with Reliance ADA Group Private LTD

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Mr. Sandeep H. Junnarkar - Non Executive Director

Mr. Junnarkar, is our Non-executive Director and was appointed to our Board of Directors in June 2001 Earlier, he was a partner at Messrs Kanga & Co. from 1981 to 2002. Mr Junnarkar specializes in banking and corporate law.

Mr. DD Jalan Whole Time Director

Mr Jalan joined Sterlite in 2001 as President Australian Operations, responsible for TCM and CMT mines. He has over 27 years of experience with various companies in the engineering, mining and non-ferrous metal sectors.

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Chief Executives:

Mr. Ramesh Nair

Chief Operating Officer

Mr. C Prabhakaran

Chief Financial Officer

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AWARDS.

2009 " International Star Award for Quality 2009"

2008 Government of India, National level award for Export performance for 2006-07

2008 Indian Institute of Metals - Non Ferrous Best Performance Awards 2008.

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COMPITITORS
Sales Turnover 13,124.50 1,275.30 53,885.49 8,138.92 302.30 27,969.34 1,313.81 Net Profit Total Assets 831.50 4,041.41 154.68 27,590.28 18,184.44 1,122.65 628.64 170.00 215.05 323.35 48.19

Competition Hind Zinc Hind Copper Tinplate

Last Price Market Cap. (Rs. cr.) Nissan Copper Precision Wires Bilpower Cubex Tubings 2.80Sterlite Ind 102.20 105.25 12.45 118.18 110.52 9.22 163.65 632.58 458.66 64.41 55,012.61 22.62 15.16 1.87

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SWOT ANALYSIS
Strengths Diversified business model with presence in commodities like Zinc, Aluminium & Copper through its subsidiary Hindustan Zinc Ltd (HZL) and Bharat Aluminium Company Ltd (BALCO). One of the lowest cost producers for all its businesses. The cost of production of its businesses is as follows: Copper 1.8cents/lb Aluminium - $1720 per tonne Zinc - $640-650 per tonne (excluding royalty)

Weakness Higher dependence on Zinc business, which contributed 68.4% of its operating profit followed by aluminium and copper each contributing 16.8% and 14.8% respectively. Absence of backward integration for its copper and aluminium business (new Korba facility) curbs the company from achieving optimum benefits of higher prices on the LME.

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Opportunity Foray into commercial power generation of 2400MW would further diversify the business model of the company, allowing the management to leverage their experience of operating thermal coal based captive power plants. Call option to acquire the governments stake of 29.5% in Hindustan Zinc Ltd and 49% in BALCO along with the acquisition of ASARCO which is pending due to legal complications.

Threats A sharp drop in the global commodity demand due to rising interest rates, inflation and a slow down in global economies, could adversely impact Sterlites consolidated performance as it might drag LME prices lower. Inability to consolidate its other businesses where the government holds a substantial stake could adversely impact the long term plans of utilizing the strong cash flows generated by its subsidiaries for other projects. Inability to complete the commercial power generation project on time and as per agreement, could lead to substantial losses and penalties.

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MARKET SHARES

167.95 +2.35 22 Feb, 15:58:44 Volume

+1.42%

1,109,785 165.60

Prev Close

Day's H/L (Rs) 170.50 - 164.00

52wk H/L (Rs) 223.00 - 148.80

Mkt Cap (Rs Cr) 56,458.07

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Balance Sheet of Sterlite Industries (India)

------------------- in Rs. Cr. -------------------

Mar '08 12 mths Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 141.70 141.70 0.00 0.00 13,014.60 8.72 13,165.02 572.05 2,685.76 3,257.81 16,422.83 Mar '08
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Mar '09 12 mths

141.70 141.70 0.00 0.00 13,897.32 0.82 14,039.84 303.80 3,526.24 3,830.04 17,869.88 Mar '09

12 mths

12 mths

2,765.34 Gross Block Less: Accum. Depreciation Net Block 1,109.85 1,655.49 52.49 Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit
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2,889.07 1,275.41 1,613.66 32.16 11,661.85 1,406.90 526.89 61.50 1,995.29 2,872.62 1,676.34

12,357.03 2,305.99 831.88 45.67 3,183.54 1,261.11 31.31

4,475.96

6,544.25

0.00 1,149.72

0.00 1,306.62

Current Liabilities Provisions Total CL & Provisions Net Current Assets 968.42 2,118.14 2,357.82 0.00 Miscellaneous Expenses Total Assets 16,422.83 17,869.88 675.42 1,982.04 4,562.21 0.00

Contingent Liabilities Book Value (Rs)

2,825.95 185.69

6,696.82 198.15

Profit & Loss account of Sterlite Industries (India)

------------------- in Rs. Cr. -------------------

Mar '08 12 mths Income Sales Turnover Excise Duty Net Sales
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Mar '09 12 mths

13,451.59 778.01 12,673.58

12,277.74 729.36 11,548.38

Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost

546.46 130.80 13,350.84

799.32 -316.54 12,031.16

11,303.70 295.53

9,618.17 339.09

Employee Cost

66.18

82.28

90.55 Other Manufacturing Expenses Selling and Admin Expenses Expenses Preoperative Exp Capitalised Expenses 11,957.92 Mar '08 12 mths Operating Profit
55

116.34

153.54 48.42 0.00

116.97 53.90 0.00

10,326.75 Mar '09 12 mths 905.09 1,704.41

846.46 1,392.92

PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) 164.45 1,228.47 138.98 0.00 1,089.49 14.98 1,104.47 152.84 Tax Reported Net Profit 951.63 1,236.43 203.92 1,500.49 166.18 0.00 1,334.31 50.84 1,385.15 148.72

654.22 Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs)
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708.58

0.00 283.40 48.16

0.00 247.97 42.15

7,084.94 13.43

7,084.94 17.45

Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) 200.00 185.69 175.00 198.15

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Sterlite Industries (India) Ltd. : Cash Flow

All figures in Rs. crore(s) Attribute Profit before tax Net cashflow-operating activity Net cash used in investing activity Netcash used in fin. activity Net inc/dec in cash and equivlnt Cash and equivalnt begin of year Cash and equivalnt end of year Mar'08 Mar'09 1,104.47 1,339.15 855.42 1,976.24

-9,397.55 -1,822.17 -

-155.09 -9.14 232.07 76.98 76.98 67.84

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Ratios
All figures in Rs. crore(s) Attribute Per share ratios Adjusted EPS (Rs) Adjusted cash EPS (Rs) Reported EPS (Rs) Reported cash EPS (Rs) Dividend per share Operating profit per share (Rs) 50.01 13.30 13.75 15.99 11.87 61.51 15.69 15.71 18.33 13.66 45.72 14.04 13.43 17.45 9.89 57.23 16.43 15.39 19.80 11.69 3.13 4.00 4.00 3.50 3.75 Mar'06 Mar'07 Mar'08 Mar'09 Mar'10 Trends

78.16 19.49 11.95 12.77 6.29

Book value (excl rev res) 6.28 per share (Rs) Book value (incl rev res) 6.28 per share (Rs.)

79.82 185.69 198.15 264.58

79.82 185.82 198.16 264.97

Net operating income per 670.70 211.68 178.88 163.00 156.06 share (Rs) Free reserves per share (Rs) 355.22 76.19 182.38 194.80 260.78

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Attribute Profitability ratios Operating margin (%) Gross profit margin (%) Net profit margin (%)

Mar'06 Mar'07 Mar'08 Mar'09 Mar'10 Trends

11.65 9.20 9.94 6.72 8.08 6.57 7.35

6.67 5.58 7.17 8.39

7.83 6.39

4.03 2.88

10.05 5.88 10.56 8.12 8.06 4.48

Adjusted cash margin (%) 9.05 Adjusted return on net worth (%) Reported return on net worth (%) Return on long term funds (%) Leverage ratios Long term debt / Equity Total debt/equity 0.22 0.50

13.62 16.66 7.40

12.46 17.58 7.23

8.80

3.73

16.84 20.09 9.59

10.39 5.59

0.17 0.63

0.02 0.24

0.01 0.27

0.11 0.23

Owners fund as % of total 66.59 61.33 80.15 78.56 80.68 source Fixed assets turnover ratio
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2.89

4.40

4.58

4.00

4.41

Attribute Liquidity ratios Current ratio

Mar'06 Mar'07 Mar'08 Mar'09 Mar'10 Trends

1.85

2.47

2.11

3.30

7.90

Quick ratio

1.33

1.42 6.84

1.02 5.94

2.59 8.98

6.96 7.02

Inventory turnover ratio 8.04

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CONCLUSION:ACCORDING TO ME AFTER THE FUNDAMENTAL ANALYSIS OF STERLITE INDUSTRIES.THE INDUSTRY IS PERFORMING WELL IN METAL SECTOR IT ALSO HAVE GOOD AMOUNT OF RESERVES OF COPPOR AND ZINC.THE COMPANY IS HIGHLY DEPENDED ON ITS ZINC BUISNESS WHICH CONTRIBUTED 68.4% OF ITS PROFIT FOLLOWED BY COPPER WHICH IS 16.8%. STERLITE IS ALSO COMING IN CONTRACT WITH NEW COMPANIES LIKE CARIN INDIA LTD,BALCO,HINDUSTAN ZINC ETC.ON COMPARING THE VERTICAL BALANCE-SHEET AND PROFIT AND LOSS ACCOUNT OF THE COMPANY THE BOOK VALUE FOR YEAR 2008 IS Rs185.69CRORES AND FOR THE YEAR 2009 IS RS 198.15CRORES.COMPARING THE DIFFERENCE OF THE PROFIT WE CAN COME TO KNOW THAT COMPANY IS PERFORMING GOOD AND THE FUTURE PROSPECTS OF THE COMPANY IS ALSO GOOD

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RECOMMENDATION.
ACCORDING TO ME BY SEEING THE FUTURE PROSPECTS OF THE COMPANY I WOULD RECOMMEND TO BUY STERLITE INDUSTRIES AND HOLD FOR LONG TERM FOR 2 TO 3 YEARS. AND IF U ARE SHORT TERM PLAYER THEN SELL IT BEFORE 2011 BUDGET.

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