Presented by

Abhisek Shaw
MBA,3rd Semester

First and foremost, I would like to thank and express my gratitude to Nirmal Bang Securities Private limited which is a leading organization in Stock & Commodity trading, for giving me an opportunity to work in their esteemed organization. I would also thank my faculty guide Bipasha Maity, without her guidance & support; it would not have been possible for me for the completion of the project. My special obligation lies to my corporate guide Avik Mukherjee Gosh who has directed me all through. I would also like to thank all our faculties who have taught me and have shared their experience with me which has helped me in doing my project.   

Introduction  Security analysis is about valuing the assets. and equity of companies from the perspective of outside investors using publicly available information. warrants. The fundamental approach to security analysis is to compare the current observable market value of a particular security with its intrinsic value that is based on variety of factors such as growth trends. The intrinsic value of an equity share depends on a multitude factors. debt. earning stability and dividend history.   .

To gain an insight knowledge about Securities Market. To analyze securities for investment To analyze the Risk and Return associated with the Security. To analyze Profitability ratios and EPS &DPS trends.Objectives of Study  The main objective of the summer training in a reputed Stock broking firm was to acquire preliminary knowledge about security market and stock trading. To understand the basic capital market structure.       . To analyze profitability of the securities.

´ Core Value ³Respect our colleagues and the business itself´ .Organization Profile Nirmal Bang Group is one of the largest retail broking houses in India. providing the investors state of art services in capital markets in the country Mission ³To work together with integrity and make our customers feel valued.´ Vision ³To create valuable relationships and provide the best financial services most professionally.

Methodology & Data  For fundamental securities analysis five companies are taken. . Those are ‡ ‡ ‡ ‡ ‡  State Bank of India Axis Bank TATA Steel limited Steel authority of India Limited BHARATI Airtel Balance sheets and profit & loss of the above companies are taken of financial years from 2005-06 to 2009-10.

The stock market and bond market are types of capital markets where investors can trade in stocks and bonds.Theoretical Analysis   The investors buy or sell securities in the capital markets. There are financial regulators that monitor the capital market dealings in order to protect the investors from fraud like SEBI. RBI. etc. The primary capital market handles the trading and investments in the new issues while the secondary capital market takes care of the trading of existing securities.    . Investments in the stocks or bonds may be either investing in the new issues or in the existing securities.

The earnings of the company. These factors in turn rely on the host of the other factors like economic environment in which they function . Company analysis . Industry Analysis 3. the growth rate and the risk exposure of the company have a direct bearing on the price of the share. they industry they belong to and finally companies¶ own performance. Economic Analysis 2. The fundamental school of thought appraised the intrinsic value of the shares through 1.Theoretical Analysis The intrinsic value of share depends on a multitude of factors.

Inflation 4.Economic Analysis  The level of economic activity has an investment in many waysGrowth of the industry 1. Savings and investment 3. Tax structure 6. Interest rate 5. Monsoon and agriculture . Gross domestic product (GDP) 2. The Balance of payments 8. Budget 7.

Labor 7. Government policy 6. They are listed below 1.Industry Analysis  Industry analysis involves reviewing the economic. Nature of the competition 5. political and market factors that influence the way the industry develops. Cost structure and profitability 3. Growth of the industry 2. The investor has to analysis some other factors too. Nature of the product 4. Research and development .

3. 3. 2. 4. 5.Company Analysis  Industry analysis involves reviewing the economic. They are listed below Factors: Future Price 1. The investor has to analysis some other factors too. 4. Competitive edge Earnings Capital structure Management Financial performance Factors: Present price 1. Historic price of the stock P/E ratio Economic conditions Stock market condition . 2. political and market factors that influence the way the industry develops.

64 30 229.37 30 229.4 20. 27.54 14.06 49.63 11.97 26.A.09 62.76 SBI 10.36 19.04 SAIL 17.73 I terest S read P/E Rati .4 25.29 3.48 13.30 3.50 B.62 AXIS 16.1 15.95 21.82 1 36.78 24.82 19.96 13.Profitability Ratios TATA Gross profit margin % Net r fit Retur EPS DPS O er ti r fit er Sh re r i et w rth 31.98 144.48 12.37 8 100.06 12 97.45 56.38 9.

A.Simple Ranking TATA r ss r fit Net r fit Retur S S O erati r fit er Share ar i ar i et w rth SAIL AXIS SBI B. A B E C C C E C E B D A A D C C B B D A A D D A A B B B B A A E D E C I terest S read P/ Rati Rank points Total 40 44 52 52 42 .

1 1621.6 634. 0.A Average P/E Ratio 7. 7 24. 4 62. 5.06 144. .47 1173.45 514.55 EPS 5 . 7 49.15 .Intrinsic Value TATA SAIL AXIS SBI B. 0 . 2 Intrinsic value 446.

EPS and DPS trends of Axis bank and SBI 160 140 120 100 80 60 40 20 0 2004-2005 2005-2006 2007-2006 2008-2009 2009-2010 EPS AXIS SBI DPS 35 30 25 20 15 10 5 0 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 AXIS SBI .

EPS and DPS trend of Tata Steel and SAIL 80 70 60 50 40 30 20 10 0 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 EPS DPS 18 16 14 12 10 8 6 4 2 0 2004-2005 2005-2006 2007-2006 2008-2009 2009-2010 .

Risk and Returns The statistical measures of a risk of an asset are (a)Standard Deviation (b) Co-efficient of variation .

41 83.75 10.6 12 1023 30 (-313.62 .6 754.40 86. 5 8 156.29 -21.A Capital Gain Dividend yield Return(09-10) % 425.5 17.9) 20 72.1 2.Risk and Returns TATA SAIL AXIS SBI B.27 63.72 23.74 AAR 9.35 16.

62 TATA SAIL AXIS SBI B.85 26.6 12 23.A (-313.88 36.D) C.11 23.52 10.35 8 72.6 9.74 63.08 Average EPS RISK (S.72 16.34 .75 20 -21.A 26.91 112.29 83.40 17.10 14. 65.1 2.72 19.68 2.67 16.26 8.35 156.49 39.V.Findings and Recommendations TATA SAIL AXIS SBI B.15 46.9) Capital Gain Dividend yield Return(09-10) % AAR 425.41 1023 30 86.27 10.5 754.86 5.

Investors should become skilled readers to weed out the important information and ignore the hype. Learn what the ratings mean and the track record of an analyst before jumping off the deep end. ‡ ‡ ‡ ‡ . still I think this project can be improvised. but it should be approached with caution.Conclusion ‡ With this project I have gathered insight knowledge about stock market and security trading Fundamental analysis can be valuable. Expecting some error. but I was limited by time and information.

com/ Books ‡Investment management (By http://www.rbi.aspx Links ‡ ‡ ‡ ‡ http://www. Kapoor ) ‡Security Analysis and Portfolio Management (By Punithavathy Pandian) .