Internship Report

Submitted By:
Divyanshu Sharma
Christ University

Under the Guidance of:

Mr. Nikesh
 Fundamental Analysis
Automobile Sector
• The automobile sector contributes
about 50 % of the manufacturing GDP
in India, 26% of the industry GDP and
7.1 % of overall GDP. A lot of other
sectors such as steel, iron, rubber,
oil, glass, etc. rely on the automobile
and the auto component sector. The
automotive sector accounts for about
15 percent of the country’s total tax
collections and employs 3.2 crore
people, directly and indirectly. This
shows why the automobile sector is
important for the health of the
economy. India is the world’s fourth
largest automobile market for vehicle
sales by volume in the world only
after China, USA and Japan.
Financial Year’20
• The automobile industry was hit hard in FY 2019-20 as sales fell across vehicle segments. According to data
released by SIAM, the Indian automobile industry recorded a 20.3% decline in domestic sales in FY20 as
compared to a 5.9% growth in FY19.
• The Passenger Vehicle segment declined 17.3% in FY20 (as compared to 2.8% growth in FY19) due to weak
consumer sentiment, the rising cost of vehicle ownership, and general economic slowdown.
• The Commercial Vehicle industry in India registered a 30.0% decline in FY20 compared to 17.1% growth in
FY19, as a result of subdued demand, and higher capacity arising from the transition to BSVI.
• After an outstanding growth in FY19, Indian industry's domestic sale of motorcycles in FY20 saw a decline of
17.5%. It was not just the relative lack of demand as the motorcycle industry was subjected to several
regulations which significantly increased the cost of ownership.
Prospects
• With the rise in fuel price of diesel and increased focus of the government towards increasing the CNG
distribution infrastructure across the country, the demand for CNG vehicles could see an upsurge in the near
future.
• The electric vehicles/hybrid market is buzzing with a lot of activity especially in the two-wheeler and three-
wheeler segments with a host of new entrants eyeing the market. The Indian automobile industry is expected
to move forward in this direction with increased local production especially in the battery segment.
• India with a relatively low car penetration level and good prospects of economic growth is on the path to
becoming the third-largest passenger vehicle market in the world and this offers a huge opportunity to
automobile companies.
 Index – Automobile Sector

• Index as we know in the stock market is basically the measure to

show all the changes that take place in the stock market as a
whole. Indexes typically are a measure of a basket of securities,
pertaining to various sectors, to replicate the market.
• The same way, here is an attempt to Create and Monitor an Index
for Large Cap companies of Automobile sector.
• Daily monitoring by taking the closing values of the stocks and
updating the Index.
• Large cap Companies are chosen because they take the major
share of the sector and show the trend of the market.
• Index was started with Initial Value of 1000, and as of 28 th June it
was 1018.5204
 Index – Automobile Sector

New Effective Value

Market Percentage of Percentage Percentage
S. No Company 09-Jun No. of Shares 28-Jun Market Percentage in Change in
Cap M.Cap Change of M.Cap
Cap Index Index
1 Ta ta Motor s 353.3 1,17,306.47 14.15% 332.031 342.9 2.08% 113853.4 13.77% 0.2870% 2.900
2 Eiche r Motor s 2,758.35 75,412.59 9.10% 27.340 2739.6 1.43% 74898.6 9.06% 0.1293% 1.307
3 TML- D 165.5 4 7,785.62 5.76% 288.735 157.45 1.12% 45461.3 5.50% 0.0618% 0.625
4 Ba ja j Auto 4 ,237.90 1,22,630.85 14.79% 28.937 4182.8 -1.56% 121035 14.64% -0.2283% -2.307
5 He r o Motocor p 3,053.65 61,008.84 7.36% 19.979 2942.5 -0.23% 58788.18 7.11% -0.0164% -0.166
6 TVS Motor 643 30,548.10 3.69% 47.509 621 0.98% 29502.91 3.57% 0.0348% 0.352
7 M&M 807.2 1,00,350.50 12.11% 124.319 792.05 -1.24% 98467.06 11.91% -0.1478% -1.493
8 Ma r uti Suzuki 7,265.10 2,19,464.18 26.47% 30.208 7593.9 -0.93% 229395.1 27.75% -0.2576% -2.603
9 Es cor ts 1,217.00 16,409.37 1.98% 13.483 1204 1.69% 16234.09 1.96% 0.0332% 0.335
10 As hok Le yla nd 129.65 38,059.11 4.59% 293.553 124.75 -3.67% 36620.7 4.43% -0.1625% -1.642
8,28,975.63 824256.2 -2.692

Sensex 1000 New Sensex 1018.5204

 Price to Earnings Ratio

Company Name PE Ratio Valuation

Tata Motors 0 Undervalued
• The price-earnings ratio (P/E ratio) relates a company's Eicher Motors 55.69 Undervalued
share price to its earnings per share.
TML- D 0 Undervalued
•
Bajaj Auto 26.72 Undervalued
In this step, we selected the companies from
Automobile Sector Hero Motocorp 19.71 Undervalued
• PE Ratios was found out for the selected companies TVS Motor 47.71 Undervalued
from automobile sector. M&M 362.25 Overvalued
• Calculated the average of those PE values. Maruti Suzuki 53.41 Undervalued
• Put the stocks that has lower value than the Average PE Escorts 18.01 Undervalued
to UNDERVALUED and ones with higher values to
Ashok Leyland 17.79 Undervalued
OVERVALUED.
Average (Sector PE) 60.129
Sum 601.29
 Financial Ratios

Undervalued
• Revenue and Profit for the selected Invetory Debt to Return
Revenue Profit Profit 2020- Current Net profit
companies were found out, and the Company Name PE Ratio Revenue 2019-20
2020-21 2019-20 21 Ratio
turnover Equity on Equity
Margin
companies showing Lower value for both Ratio Ratio Ratio
Tata Motors 0 2,64,041.12 2,52,437.94 -12,070.85 -13,451.39 Reject
revenue and Profits in FY’21 as 8,720.35
Eicher Motors 55.69 9,153.58 1,795.73 1,315.76 Reject
compared FY’20 were rejected and TML- D 0 2,64,041.12 2,52,437.94 -10,975.23 -13,016.14 Reject
other combinations of at least one Bajaj Auto 26.72 31,443.22 29,017.54 4,890.40 4,550.70 Reject
positive value were accepted Hero Motocorp 19.71 29,984.53 31,517.09 3,624.78 2,982.61 Accept 1.75 17.3 0.2 20.20% 9.62
TVS Motor 47.71 18,901.14 19,468.04 655.39 615.25 Accept 0.75 14.54 0.25 15.70% 3.65
• Suitable Ratios pertaining to automobile 73,366.20
Maruti Suzuki 53.41 78,994.40 5,559.20 4,220.10 Reject
sector were found out for the selected Escorts 18.01 5,907.69 7,174.80 472.8 872.37 Accept 2.73 9.77 0 19.70% 7.47
companies which were namely – Current Ashok Leyland 17.79 33,324.90 22,059.10 2,183.32 456.91 Reject
Ratio, Inventory turnover ratio, Debt to Overvalued
EPS 2020- EPS
Equity Ratio, Return to equity ratio and Company Name PE Ratio EPS 2019-20
21 Growth
PEG Ratio
net profit margin. M&M 362.25 1.02 14.58 1329.41% 27.249 Accept 1.4 7.72 1.43 2.41% 2.92
 NAV

Inventory Debt to Return Net

Current Company Company Company
Company Name Company Name turnover Equity on Equity profit
Ratio Name Name Name
Ratio Ratio Ratio Margin
Ranking He r o He r o
Es cor ts 2.73 He r o Motocor p 17.3 Es cor ts 0 20.20% 9.62
according to He r o
Motocor p Motocor p

Ratios Her o Motocor p 1.75 TVS Motor 14.54

Motocor p
0.2 Es cor ts 19.70% Es cor ts 7.47

M&M 1.4 Es cor ts 9.77 TVS Motor 0.25 TVS Motor 15.70% TVS Motor 3.65
TVS Motor 0.75 M&M 7.72 M&M 1.43 M&M 2.41% M&M 2.92

Inventory Return on
Current Debt to Equity Net profit
Total
Cumulative Company Name
Ratio
turnover
Ratio
Ratio
Equity
Ratio
Margin

Ranking with Her o Motocor p 2 1 2 1 1 7

Es cor ts
Equal
1 3 1 2 2 9
TVS Motor 4 2 3 3 3 15

Weightage M&M 3 4 4 4 4 19

No. of Allocation (In

Asset Company Name Price
s hare s crore s )
Initial NAV 25-06-2021 Allocation NAV 28-06-2021 Allocation NAV

He r o Motocor p
Allocation and Es cor ts
2944.6 10188.141
1174.75 34049.798
3
4
2939.5
1182.1
29948040.48
40250266.01
2942.5
1204
29978604.9
40995956.59
10
NAV TVS Motor 619.3 32294.526 2 620 20022606.17 10.0236047 621 20054900.69 10.10187
M&M 792.9 12611.931 1 794.1 10015134.32 792.05 9989279.859
89144.396 10 100236047 101018742
TECHNICAL ANALYSIS -
Long Term Price Action

S.no. Name of stock Pattern Observed Current Trend Recommendation

1 Eicher Head and Shoulder Top Upward There is a pattern forming
for Head and shoulders, so
wait and Long it when it
breaks it.

2 Bajaj Auto Round Bottom Sideways There is a possible pattern

formation for double
bottom, suggested wait
and trade when pattern
forms.

3 Escorts Cup with Handle Downward Pattern formed for double

bottom, and it has broken
the line, suggested to short
sell.

4 Ashok Leyland Head and Shoulder Bottom Sideways Head and shoulder pattern
forming, suggested to short
when it breaks.

5 Tata Double Bottom Sideways No pattern forming

currently, suggested to
wait for a pattern and
trade.
Long Term Price Action

Round Bottom

Head and Shoulder Top

Long Term Price Action

Double Bottom

Head and shoulder Bottom

Long Term Price Action

Cup with Handle

Medium term Price Action

S.no. Name of stock Pattern Observed Current Trend Recommendation

1 Eicher Ascending Triangle Upward There is a pattern forming for
Head and shoulders, so wait and
Long it when it breaks it.

2 Hero Moto Corp Rectangle and Descending Sideways No pattern forming currently,
suggested to wait for a pattern
Triangle and trade.

3 Tata Rectangle Sideways No pattern forming currently,

suggested to wait for a pattern
and trade.

4 Hero Moto Corp Rectangle Sideways No pattern forming currently,

suggested to wait for a pattern
and trade.

5 Ashok Leyland Ascending Triangle Sideways Head and shoulder pattern

forming, suggested to short
when it breaks.
Medium term Price Action

Rectangle and Descending Triangle

Ascending Triangle
Medium term Price Action

Ascending Triangle

Rectangle
Medium term Price Action

Rectangle
Short Term Price Action

S.no. Name of stock Pattern Observed Current Trend Recommendation

1 Bajaj Auto Shooting Star Upward There is an upward trend,
suggested to wait for
shooting star or hanging
man, to short sell then

2 Hero Moto Corp Hammer Upward Hammer is forming,

recommend to long it

3 Escorts Hanging Man Sideways No pattern observed,

suggested to wait and
trade when candle forms

4 TVS Inverted Hammer Sideways No pattern observed,

suggested to wait and
trade when candle forms

5 Tata Motors Doji Upward Hammer is forming,

recommend to long it
Short Term Price Action

Doji

Inverted Hammer
Short Term Price Action

Shooting Star

Hanging Man
Short Term Price Action

Hammer
Commodities
Crypto Currency
Strategies

Na me o f Stra te g y No . o f tra de s Pro fit Lo ss Winning Pro ba bility Lo sing Pro ba bility
Bulls 180 23 10 13 43.48% 56.52%
Be a r 180 22 12 10 54.55% 45.45%
Sp ring Mo m e ntum 4 3 1 75.00% 25.00%
Sq ue e ze Mo m e ntum 3 1 2 33.33% 66.67%
O RB 45 17 11 6 64.71% 35.29%
To ta l 69 37 32 53.62% 46.38%
Oscillators Cumulative Ranking

Winning Losing
Rank Name of Oscillator
Probability Probability
1 MACD 0.454 0.546
2 Supertrend 0.453 0.547
3 RSI 0.445 0.555
4 Aroon 0.445 0.555
5 Stochastic RSI 0.444 0.556
6 VWAP 0.440 0.560
7 Bollingers Band 0.437 0.563
8 Fibonacci 0.423 0.577
9 Pivot Points Standard 0.411 0.589
10 Central Pivot Range 0.398 0.602
THANK YOU