Analysis of Stock Market

8/9/2019 Analysis of Stock Market

1/19

CORPORATE

FINANCE

MAJOR ASSIGNMENT

STOCK MARKET

ANALYSIS

BATCH MBA 14 A

SUBMITTED TO

y Ms. RupaSUBMITTED BY

y Nibin Varghese CharleyBLR0907033040


2/19

CORPORATE FINANCE January 24, 2010

Submitted By Nibin Varghese Charley (BLR0907033040) | 2

Table of Contents

INTRODUCTION ................................ ................................ ................................ ............................. 3

DLF LIMITED ................................ ................................ ................................ ................................ .. 4

OVERVIEW................................ ................................ ................................ ................................ .. 4

FINANCIAL BACKGROUND ................................ ................................ ................................ ..... 4

MPHASIS LIMITED ................................ ................................ ................................ ......................... 5

OVERVIEW................................ ................................ ................................ ................................ .. 5

FINANCIAL BACKGROUND ................................ ................................ ................................ ..... 5

ANALYSIS ................................ ................................ ................................ ................................ ....... 6

DLF LIMITED ................................ ................................ ................................ .............................. 7

MPHASIS LIMITED ................................ ................................ ................................ ................... 12

CONCLUSION ................................ ................................ ................................ ............................... 17

REFERENCES ................................ ................................ ................................ ................................ 19


3/19


Submitted By Nibin Varghese Charley (BLR0907033040) | INTRODUCTION 3

INTRODUCTION

Companies over the years had been offering a small part ofthe companys share to

the public. This process of congregating large sum ofmoney by companies is called as share

issuing. The people who own this share are termed as share holders and they also posses

some amount of right within the company. Apart from enjoying the rights of the company

they also receive dividends on their investments. Some of the important terms relating to

market share are -

y Face value Face value is the initial price at which the company share is sold to theinvestor.

y Market value Market value is the current price ofthe share available for sale.y Dividend Dividend is the percentage of profit gained by the company paid to the

share holders.

Markets are classified into three types primary, secondary and tertiary.

Primary market is the place where shares are first issued. This is termed as Initial

Public Offering (IPO) which means that the shares and debentures are transferred from the

sellers to the investors. The 3 concepts which are related to primary market are Rights Issue,

Placements and Tender. Rightissues are giving shares to the existing customers onthe basis

of pro rata, Placement is the method of issuing shares to certain selected institutions and

Tenderis related to issuing shares to government agencies.

Secondary market, also known as the aftermarket, is the financial market where

previously issued securities, stock, bonds, options, and futures are bought and sold. The

concept of secondary market is also used to referto the market forthe purchase or selling

of any used goods or assets. Another way of referring secondary marketis to loans which are

sold by a mortgage bankto investors. Secondary market is primarily known as Stock

Market or Stock Exchange in most of the countries. A stock exchange is the mutual

organization providing trading facilities for stockbrokers, traders and other securities. For a

shared to be sold in a secondary market it has to be listed under the market and based on

various demand and other factors such as recession, market growth, inflation and so on, the

shares are bought and sold by the investors


4/19


Submitted By Nibin Varghese Charley (BLR0907033040) | DLF LIMITED 4

Tertiary markets involve the provision of services to businesses as well as final

consumers. Services may involve the transport, distributionbusiness and sale of goods from

producerto a consumer.

DLF LIMITED

OVERVIEW

DLF Limited is the countrys largest company in real estate in terms of revenues,

earnings, market share and the area developed. A company with a constant growth of 62

years has approximately 238 completed projects and 423 planned projects which are spread

across 30 different cities. The primary business of the company is enlargement of suburban,

industrial and vendor properties. The companys earnings is based from construction and

rentals of buildings. DLF has also marked its presence in construction of government

infrastructure, Special Economic Zone and also into hotel businesses. DLF has become a

preferred name with many IT & ITES majors and leading Indian and International corporate

giants, including GE, IBM, Microsoft, Canon, Citibank, Vertex, Hewitt, Fidelity Investments,

WNS, Bank of America, Cognizant, Infosys, CSC, Symantec and Sapient, among others.

DLF has a strong managementteam running independentbusinesses, though complementing

each other in cases of opportunities of mixed land use. DLF's missionis to build a world-

class real estate development company with the highest standards of professionalism, ethicsand customer service and to thereby contribute to and benefit fromthe growth ofthe Indian

economy.

FINANCIAL BACKGROUND

The company has a total 5,877,850 equity shares which is been sold for Rs. 2 each

and 1,338,603,595 equity shares of Rs. 2 each fully paid issued as bonus shares by the way of

capitalisation of free reserves and share premium account. During the year, there was a

decrease in the arrears by Rs. 94.55 lacs, which comprised of 0.26 lacs share capital and

94.29 lacs of share premium. During this yearthe company also decided to buy back some of

its shares from the open market. Under this process the company boughtback 7,623,567

equity shares till March 31, 2009. Onthis buy back procedure the company accounted for an

increase inthe reserves to Rs. 152.47 lacs.The profit ofthe company during the year 2008-09

is 4,468.19 crores when compared to 7,813.27 crores during the year 2007-08.


5/19


Submitted By Nibin Varghese Charley (BLR0907033040) | MPHASIS LIMITED 5

MPHASIS LIMITED

OVERVIEW

Mphasis Limited was formed in the year 2000 when the US-based IT consultingcompany Mphasis Corporation, founded in 1998 merged with Indian IT services company

BFL Software Limited which was founded in 1993. Mphasis supports G1000 companies

around the world inthe improvement oftheirbusiness processes. Our unique strength lies in

our ability to provide integrated solutions involving Infrastructure Technology, Application

& Business Process Outsourcing capabilities. The convergence oftechnologies such as web

services, workflow software and business performance monitoring along with business

intelligence and customer focus drive all our services delivery offerings. Our emphasis is on

developing flexible platforms that allow our clients to rapidly implementbusiness processes

with minimal capital outlays. The company is also certified with ISO 9001:2008, ISO/IEC

27001:2005. They are also into SEI CMMI, ISO and Six Sigma related services support. The

companys strong point lies in the Banking, Financial Services, and Insurance and

Technology industries. The companys vast experience in various projects has permitted them

to expand their focus to the Healthcare and Telecom industries as well.

FINANCIAL BACKGROUND

The revenues raised from different services grew by 26.5% during the year 2009

when compared to the previous year. Amajor growth was experienced in ITO, followed by

Application Services and BPO. During the same year there was an increase in the cost

revenue of 21.5% compared to the previous year. The growth of cost revenue saw a decrease

due to discretionary expenses and reduced facilities cost. The company also saw a significant

increase of gross profit which climbed to 38.7% when compared with the previous year.


6/19


Submitted By Nibin Varghese Charley (BLR0907033040) | ANALYSIS 6

ANALYSIS

The main motto of this report is to study the stockmarket and analyse the various

trends and changes happening in the market. Analysing a particular company helps the

investorto decide whether ornot to purchase the share of that particular firm. The analysis

part canbe basically done through two method-Observational and the technical method.

The Observational method is based on the variations and changes happening in the

market. Inthis method the investoris vigil aboutthe variations inthe market and the current

trend ofthe market. By understanding the up and down ofthe marketthe investor gets a clear

cut idea of what is happening in the market and where to invest. One of the major

disadvantage of this method is that there is no scientific or calculation data to back the

analysis, it completely depends onthe currenttrend ofthe market.

Another method for analysis is the technical method and one of the frequent and

favoured methods used is the moving average method. In this method the average ofthe

previous stock value is takento predictthe future values. The major disadvantage ofthis type

is thatit does not considerthe current happenings around the market.

This report is predicted based on the observational method. For complementing the

analysis the report has beenbacked by the news and current events onthe company as well as

the industry orthe sector.


7/19



DLF LIMITED

WEEK 1 (23.11.2009 27.11.2009)

DATE

DLF LTD DLF LTD

Day'sIndex

DaysHigh

DaysLow

PreviousOpen

PreviousClose

Day'sIndex

DaysHigh

DaysLow

PreviousOpen

PreviousClose

CHANGE IN VALUES (%)

23-11-2009 372.15 380.70 371.00 375.00 374.75 -2.60

24-11-2009 373.00 380.00 369.10 372.75 372.15 0.85 -0.70 -1.90 -2.25 -2.60

25-11-2009 362.15 375.50 360.60 373.00 373.50 -10.85 -4.50 -8.50 0.25 1.35

26-11-2009 354.25 366.00 352.05 360.00 362.15 -7.90 -9.50 -8.55 -13.00 -11.35

27-11-2009 350.60 355.70 326.00 350.00 354.25 -3.65 -10.30 -26.05 -10.00 -7.90

PredictedValue 350.10 - - - - - - - - -

This week so a major turnaround when the government increased the rates of the

property in major cities. DLF announced a marginal hike in prices of its property in

Bangalore. This actually brought a decrease inthe stock values as there was decrease inthe

trend of the real estate business. Investors during this week were sceptical whether ornotto

invest during this week. On 25th November 2009 DLF di pped drastically although the

company saw some positive signs during the beginning ofthe day.

PREDICTION: Considering all the current events and the trend I would predict the

following forthe start ofthe next week. Days Index- 350.10

335.00340.00

345.00

350.00

355.00

360.00

365.00

370.00

375.00

DLF LIMITED - 1STWEEK


8/19



WEEK 2 (30.11.2009 04.12.2009)

DATE

DLF LTD DLF LTD

Day's

Index

Days

High

Days

Low

Previous

Open

Previous

Close

Day's

Index

Days

High

Days

Low

Previous

Open

Previous

Close


30-11-2009 351.60 362.00 349.25 358.00 350.60 1.00 6.30 23.25 8.00 -3.6501-12-2009 370.80 372.20 353.60 358.00 351.60 19.20 10.20 4.35 0.00 1.00

02-12-2009 384.50 387.00 374.50 379.00 370.80 13.70 14.80 20.90 21.00 19.20

03-12-2009 383.90 391.50 382.00 384.50 384.50 -0.60 4.50 7.50 5.50 13.70

04-12-2009 380.50 387.50 375.70 380.00 383.90 -3.40 -4.00 -6.30 -4.50 -0.60

PredictedValue

372.10 - - - - - - - - -

The week showed a high in DLFs stock as it advances by 4.2%. On December 2nd

DLF moved ahead whenit reintroduced its IPO plan which was abandoned inthe year 2008.

This week also showed a majortransformation when DLF invested a massive US $1.2 billion

inthe real estate in Singapore. This inturn helped the company to gainits market value from

the previous week. Later half of the week saw a weakening stockin the real estate business

and analysts stated thatthis condition would remain for few days.

PREDICTION:After analysing the week it was possible to predict that the market

value would still weaken and decrease. Thus with the following assumption the following

prediction was made.

Days Index - 372.10

330.00

3

0.00

350.00

360.00

3 0.00

380.00

390.00

I I - 2N


9/19



WEEK 3 (07.12.2009 11.12.2009)

DATE

DLF LTD DLF LTD

Day's

Index

Days

High

Days

Low

Previous

Open

Previous

Close

Day's

Index

Days

High

Days

Low

Previous

Open

Previous

CloseCHANGE IN VALUES (%)

07-12-2009 369.55 384.10 366.85 380.85 380.50 -10.95 -3.40 -8.85 0.85 -3.40

08-12-2009 382.60 384.45 362.20 369.00 369.55 13.05 0.35 -4.65 -11.85 -10.95

09-12-2009 382.65 388.80 370.00 374.40 382.60 0.05 4.35 7.80 5.40 13.05

10-12-2009 386.15 389.85 379.50 381.10 382.65 3.50 1.05 9.50 6.70 0.05

11-12-2009 382.60 394.40 377.10 392.00 386.15 -3.55 4.55 -2.40 10.90 3.50

Predicted

Value

380.50 - - - - - - - - -

The weakened stockmarket ofthe previous week resulted into a major disaster when

a major partner DE Shaw exited DLF assets with US $450-470 million. Reports also state

that Rajiv Singh, the vice chairman of DLF had to sell 9.9% of his stake to raise funds forthe

exit. This had a negative impression onthe investors and the companys graph took a major

dip.

PREDICTION: After understanding the companys disaster this week would

definitely reflect a dip inthe next week. After analysing the events I predictthe following for

this week.

Days Index 380.50

360.00

36

.00

370.00

37

.00

380.00

38

.00

3 0.00DLF LIMITED - 3

RD

WEEK


10/19



WEEK 4 (14.12.2009 18.12.2009)

DATE

DLF LTD DLF LTD

Day's

Index

Days

High

Days

Low

Previous

Open

Previous

Close

Day's

Index

Days

High

Days

Low

Previous

Open

Previous


14-12-2009 382.65 386.05 378.25 384.00 382.60 0.05 -8.35 1.15 -8.00 -3.55

15-12-2009 381.00 388.00 377.65 385.00 382.65 -1.65 1.95 -0.60 1.00 0.05

16-12-2009 379.40 383.90 375.25 379.00 381.00 -1.60 -4.10 -2.40 -6.00 -1.65

17-12-2009 365.00 379.00 360.10 376.95 379.40 -14.40 -4.90 -15.15 -2.05 -1.60

18-12-2009 358.15 371.90 356.10 360.00 365.35 -6.85 -7.10 -4.00 -16.95 -14.05

Predicted

Value

351.40 - - - - - - - - -

DLF limited is all set to acquire a property owned by one of its founder. This

transaction is mainly done through one of its entities DLF cyber city to repay the debts of

DLF limited. This was a push factor for the investors as the company regained its market

value to some extent. This week also a restructuring ofthe firmbefore they integrated with

DLF assets and the structuring was based on 4 verticals - annuity (comprising leased assets

like IT parks, offices and malls), Gurgaon, Super Metros and Rest of India. On 17th of

Decemberthe companys market value dipped by 3.6% and many analysts reported notbuy

DLF.

PREDICTION: As it was seen that there was major dip in the market value of DLF

and my predictions are as follows Days Index 351.40

345.00

350.00

355.00

3 0.00

3 5.00

370.00

375.00

380.00

385.00DLF LIMITED - 4

TH

WEEK


11/19



WEEK 5 (21.12.2009 24.12.2009)

DATE

DLF LTD DLF LTD

Day's

Index

Days

High

Days

Low

Previous

Open

Previous

Close

Day's

Index

Days

High

Days

Low

Previous

Open

Previous


21-12-2009 350.45 360.80 348.70 360.00 358.15 -7.70 -11.10 -7.40 0.00 -7.20

22-12-2009 355.60 358.45 352.05 355.00 350.45 5.15 -2.35 3.35 -5.00 -7.70

23-12-2009 365.90 367.35 357.00 359.00 355.60 10.30 8.90 4.95 4.00 5.15

24-12-2009 370.30 375.65 366.00 368.00 365.90 4.40 8.30 9.00 9.00 10.30

PredictedValue

367.25 - - - - - - - - -

Although the company was rated as the top loser the previous week, the company

turned the tide and showed a endeavour to pull back the market share. This week saw the

companys positive stand onmerging with DAL which was supported by many analysts to

buy the share. This merger was supportive for the shareholders and most ofthe brokers felt

the ratio betweenthe two entities was a fair deal forboth parties.

PREDICTION: After understanding the advantages and benefits of merging the

company saw a stable week as compared to the previous week. The prediction forthis week

wouldbe as follows Days Index 367.25

340.00

34

.00

3

0.00

3

.00

360.00

36

.00

370.00

37

.00

1/1

/

009

/1

/

009

3/1

/

009

4/1

/

009

DLF LIMITED - THWEEK


12/19



MPHASIS LIMITED

WEEK 1 (23.11.2009 27.11.2009)

DATE

MPHASIS LTD MPHASIS LTD

DaysIndex

DaysHigh

DaysLow

PreviousOpen

PreviousClose

DaysIndex

DaysHigh

DaysLow

PreviousOpen

PreviousClose


23-11-2009 691.75 721.90 687.00 717.70 714.65 -22.90

24-11-2009 697.40 717.00 685.00 700.00 691.75 5.65 -4.90 -2.00 -17.70 -22.90

25-11-2009 669.50 719.90 666.00 705.00 697.40 -27.90 2.90 -19.00 5.00 5.65

26-11-2009 672.70 682.00 657.10 674.00 669.50 3.20 -37.90 -8.90 -31.00 -27.90

27-11-2009 676.90 680.00 644.15 661.00 672.70 4.20 -2.00 -12.95 -13.00 3.20

Predicted

Value

675.35 - - - - - - - - -

On 24th December 2009, the companys quarterly statement showed a net profit up by

33.9% which resulted inthe market value from 691.75 to 697.40. The company had shown a

tremendous growth over the past two years. The revival of its competitor caused the

companys dip overthe week. Many advisors still believed thatthe company is worth buying

at a market value of 725. This had a majorinspiration onthe investors to investmore onto the

company which drastically helped inthe inclination ofthe company.

PREDICTION: After analysing this week trends, the coming week would see the

following index.

Days Index 675.35

655.00

660.00

665.00

670.00

675.00

680.00

685.00

690.00

695.00

700.00

23/11/2009 24/11/2009 25/11/2009 26/11/2009 27/11/2009

MPHASIS LIMITED -WEEK 1


13/19



WEEK 2 (30.11.2009 04.12.2009)

DATE


Days

Index

Days

High

Days

Low

Previous

Open

Previous

Close

Days

Index

Days

High

Days

Low

Previous

Open

Previous

Close


30-11-2009 676.85 694.00 672.10 685.00 676.90 -0.05 14.00 27.95 24.00 4.2001-12-2009 680.75 694.00 675.00 694.00 676.85 3.90 0.00 2.90 9.00 -0.05

02-12-2009 664.40 689.00 662.05 688.00 680.75 -16.35 -5.00 -12.95 -6.00 3.90

03-12-2009 700.45 706.50 665.10 665.10 664.40 36.05 17.50 3.05 -22.90 -16.35

04-12-2009 699.25 718.90 695.00 699.50 700.45 -1.20 12.40 29.90 34.40 36.05

PredictedValue

700-702

- - - - - - - - -

This week showed a huge turnaround in the Indianmarkets as Sensex fell flat and

there was nothing to look upon for the IT companies as most of theirmarket values came

down considerably. As the entire country was looking forward forthe national budget, many

companys including Mphasis were preparing for a crucial move. The company also

predicted that it would attain its targetbetween 830-840 which inspired the shareholders to

invest and bring backthe company inthe right direction.

PREDICTION: Following the fall ofthe Sensex the company made a drastic move to

come backinthe right direction and hence the prediction forthis week would be thatit would

lie between 700 and 702.

640.00

650.00

660.00

670.00

680.00

690.00

700.00

710.00

30/11/2009 01/12/2009 02/12/2009 03/12/2009 04/12/2009



14/19


15/19



WEEK 4 (14.12.2009 18.12.2009)

DATE


Days

Index

Days

High

Days

Low

Previous

Open

Previous

Close

Days

Index

Days

High

Days

Low

Previous

Open

Previous


14-12-2009 696.05 705.80 694.00 702.00 697.50 -1.45 -10.20 3.90 -14.00 -6.25

15-12-2009 696.30 714.00 693.10 710.00 696.05 0.25 8.20 -0.90 8.00 -1.45

16-12-2009 697.90 704.00 688.30 703.30 696.30 1.60 -10.00 -4.80 -6.70 0.25

17-12-2009 709.00 713.25 697.00 702.85 697.90 11.10 9.25 8.70 -0.45 1.60

18-12-2009 726.15 734.00 706.90 706.90 709.00 17.15 20.75 9.90 4.05 11.10

Predicted

Value

718.35 - - - - - - - - -

The start ofthe market looking tired which made many experts and analysts suggested

disinvesting from the shares. With the ongoing progress it was predicted that the first few

months of 2010 would be negative which the condition was in 2008. Ambareesh Baliga of

Karvy Stock Broking stated thatthe Mphasis would reach the target of 840 and it has a long

term target of 1030-1040. This really helped in the inclination ofthe market value over thedays.

PREDICTION: Looking atthe trend of the company it would be predicted thatthere

is an upward trend in the market and the company the market value would still gain some

amount of value. Days Index - 718.35

680.00

685.00

690.00

695.00

700.00

705.00

710.00

715.00

720.00

725.00

730.00

14/12/2009 15/12/2009 16/12/2009 17/12/2009 18/12/2009

MPAHSIS LIMITED -W

EEK 4


16/19



WEEK 5 (21.12.2009 24.12.2009)

DATE


Days

Index

Days

High

Days

Low

Previous

Open

Previous

Close

Days

Index

Days

High

Days

Low

Previous

Open

Previous


21-12-2009 720.05 741.80 717.10 735.00 726.15 -6.10 7.80 10.20 28.10 17.15

22-12-2009 725.85 734.45 718.35 725.00 720.05 5.80 -7.35 1.25 -10.00 -6.10

23-12-2009 733.50 735.00 723.00 729.80 725.85 7.65 0.55 4.65 4.80 5.80

24-12-2009 731.45 741.75 728.10 739.80 733.50 -2.05 6.75 5.10 10.00 7.65

PredictedValue

727.15 - - - - - - - - -

The start ofthe week saw a drastic dip inthe NIFTY which putmany top companies

ofthe country fall marginally. But Mphasis had a growth of 5-6% from its previous market

value. The trend of the previous week showed an increase in the market value. On 23rd

December 2010 other competitive software companies gained market value which indicated a

small dip inthe graph. One ofthe major competitive companies which gained this week was

3-infotech limited.

PREDICTION: Assuming from the trend of the market it could be stated that there

wouldbe decrease inthe market value. The predicted value forthe next weekis

Days Index 727.15

710.00

715.00

720.00

725.00

730.00

735.00

21/12/2009 22/12/2009 23/12/2009 24/12/2009



17/19


Submitted By Nibin Varghese Charley (BLR0907033040) | CONCLUSION 17

CONCLUSION

Thus a proper study on the stockmarket was done and a proper analysis was done

using the observational method. The report also helped to understand the market trend and

the various factors which results inthe change ofthe market value.


18/19


Submitted By Nibin Varghese Charley (BLR0907033040) | 18


19/19


Submitted By Nibin Varghese Charley (BLR0907033040) | REFERENCES 19

REFERENCES

DLF Building India. (2008). Retrieved January 24, 2010, from Overview:

http://www.dlf.in/dlf/wcm/connect/dlf_common/DLF_SITE/HOME/TOP+LINK/About+US/

Overview

DLF Building India. (2008). Retrieved January 24, 2010, from Financial Results:

http://www.dlf.in/dlf/wcm/connect/dlf_common/DLF_SITE/HOME/TOP+LINK/Investors/Fi

nancial+Results/

Moneycontrol.com. (2010). Retrieved January 24, 2010, fromNews on Dlf:

http://www.moneycontrol.com/company-article/dlf/news/D04

Moneycontrol.com. (2010). Retrieved January 24, 2010, fromNews on Mphasis:

http://www.moneycontrol.com/company-article/mphasis/news/MB02

Mphasis - An Hp Company. (2006). Retrieved January 24, 2010, fromAbout Us:http://www.mphasis.com/aboutUs/aboutUs.asp

Mphasis - An Hp Company. (2006). Retrieved January 24, 2010, from Financial Results:

http://www.mphasis.com/investorRelations/investor_financials.asp

Ultratech Cement - About Us. (2010). Retrieved January 24, 2010, from Strong Study:

http://www.ultratechcement.com/about_us/index.htm

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