MohanKumar D R-0491-Fundamental Analysis of Securities

A STUDY ON FUNDAMENTAL ANALYSIS OF SECURITIES

M.P.BIRLA INSTITUTE OF MANAGEMENT

RESEARCH PROJECT

On �A STUDY ON FUNDAMENTAL ANALYSIS OF

SECURITIES�

BY

MOHAN KUMAR. D. R Registration Number

04XQCM6057

Under the guidance of

DR N S MALLAVALLI

M.P.Birla Institute of Management

Associate Bharatiya Vidya Bhavan

Bangalore-560001

2004-2006

Submitted in partial fulfillment of the requirement for MBA Degree of Bangalore University

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DECLARATION

I hereby declare that the research project titled �A STUDY ON

FUNDAMENTAL ANALYSIS OF SECURITIES� is prepared under the guidance

of Dr N S MALLAVALLI in partial fulfillment of MBA degree of Bangalore

University, and is my original work.

This project does not form a part of any report submitted for degree or diploma

under Bangalore University or any other university.

Place: Bangalore MOHAN KUMAR D R



PRINCIPAL�S CERTIFICATE

This is to certify that Mr.MOHAN KUMAR D R bearing Registration

No: 04XQCM6057 has done a research project on �A STUDY ON

FUNDAMENTAL ANALYSIS OF SECURITIES� under the guidance of DR N S

MALLAVALLI, M.P. Birla Institute of Management, Bangalore. This has not formed

a basis for the award of any degree/diploma for any other university.

Place: Bangalore Dr.N.S.MALLAVALLI

Date: PRINCIPAL

MPBIM, Bangalore



GUIDE�S CERTIFICATE

I hereby declare that the research work embodied in this dissertation entitled �A

STUDY ON FUNDAMENTAL ANALYSIS OF SECURITIES�has been undertaken and completed

by Mr. MOHAN KUMAR D R under my guidance and supervision.

I also certify that he has fulfilled all the requirements under the covenant governing

the submission of dissertation to the Bangalore University for the award of MBA Degree.

Place: Bangalore Dr N S MALLAVALLI

Date: Research Guide

MPBIM, Bangalore



ACKNOWLEDGEMENT

The successful accomplishment of any task is incomplete without acknowledging

the contributing personalities who both assisted and inspired and lead us to visualize

the things that turn them into successful stories for our successors.

First of all I thank the Almighty God for his grace bestowed on us throughout this

project.

My special thanks to my project Guide Dr N S MALLAVALLI, who guided me

with the timely advice and expertise and has helped remarkably to complete the

project.

Last, but not the least, I would like to thank my Parents and all my Friends for

their wholehearted direct and indirect support and encouragement.



INTRODUCTION

INVESTMENT SCENARIO

Investment is the employment of fund on assets with an aim of earning income

on capital appreciation.

Investment means the present consumption is sacrified to get return in future.

Investment is the good only for the purpose to get return from the selected or

choosing securities so; investors have to see the fundamental analysis. In fundamental

analysis, we can broadly classify into three types. One is Economic Analysis; Industry

analysis and company analysis. These three are very important base of the securities

or stock of market. We have to study about this fundamental analysis.

An Indian stock market has been no different. Memories of its crash of

December 1990 are still there in the minds of many. After record rise in proceeding

few years the index fell precipitously and investor loss heavily. This phenomenon

repeated every now and then. Though the equity cult is fast spreading among the

investor the hard fact is majority of stocks continue to remain volatile to date. All

these are pointers to the fact that the investor market is no longer holding an olive

branch to investor in equity. Much of the danger associated with it can be avoided and

it need not be such nerve raking experience, provided one approaches it as a rational

decision making process. In short Security analysis and portfolio management are

hard work, requiring discipline and patience, and the work is not always rewarded

with exceptional returns.



INTRODUCTION TO THE CONCEPT OF SECURITY

ANALYSIS

An investment is a commitment of funds made in expectation of some positive

rate of return in future. An investor makes some sacrifice in the present in the hope of

desiring benefits in future. The motive behind investment varies from person to

person. Some people invest in order to gain a sense of power or prestige. Often the

control of corporate enterprises is a driving motive. For most investor however their

interest in investment is largely pecuniary to earn a return on their money. But the

return on stock market security is subject to risk. Risk incase refers to the uncertainty

surrounding actual realization of the rate of return offered by an investment. The time

element refers to period of waiting required to reap the return. Accordingly early

investment decision has three key aspects. They are,

Return

Risk

Time

There fore, investment process must be considered in terms above aspects.

One should approach any scheme of investment as a rational decision making

process, in which he should attempt to select a package of portfolio securities that

meets predetermined set of goals. These investors goal are usually expressed in terms

of return. Almost all the cases, the hard fact are that return and risk are inseparable.

Further the maximum higher the return the grater t6he risk.

Therefore the ultimate decisions to be made in the investment are two.

What securities to be held

How many rupees should be allocated to each.



These decisions are made in three steps.

1. Security analysis

2. Security evaluation

3. Portfolio analysis, selections and management.

Securities are marketable financial instruments that bestow on their owners the

right to make specific claims on particular assets. An individual security provides

evidence of their creditor ship or ownership depending on whether it is bond or stock,

respectively. A bond is loan that is paid off with interest; the investor lends money to

the borrowing company that issued bond. In contrast, stock ownership represents a

cash investment a future of a corporation; the investor owns a part of a corporation

and share in its profits.

SECURITY ANALYSIS

(a) Traditional investment analysis, when applied to securities, emphasizes projection

of prices and dividends. That is, the potential prices of a firm�s common stock and

future dividend stream are forecast, and then discounted back to the present.

(b) Basically modern security analysis deeply rooted in the fundamental concept. But

the more modern approach to common stock analysis emphasizes risks and return

estimate rather than mere price and dividend estimates, ofcourse dependent on share

price and accompanying the dividend stream.

SECURITY EVALUATION

It refers to the act of assessing the true worth of security. Before committing

the fund on stock exchange securities, the investor should make thorough comparison

of the prices of the security with its true value. The price refers to the price quoted for

the security at the stock exchange at a given movement of time. Value refers to the

intrinsic worth. Only with the help of such evaluation the investor can decide as to

buy hold or sell.



DIFFERENT APPROACHES TO EVALUATION

There are essentially three approaches or school of thoughts on the matter of

security price evaluation, classified as

(a) Fundamental Approach

The concept of time value of money is the business of this approach. Money

has a time value. A rupee now is worth more than rupee a year from now. For

different securities, future benefits may me received at different times. Even when the

amount of future payment is the same, differences in the speed of their receipt may

create differences in value. Time value of money suggests that earlier receipt is more

desirable than later receipt, even when the both are equal in the amount of certainty.

Because, earlier receipt can be re invested to generate additional returns before later

receipt come in. The force operating is the principle of compound interest.

Framework: The proper order in which to proceed in Fundamental analysis

is, first to analyze the overall economy and securities markets. Second, analyze the

industry with in which a particular company operates. Finally, analysis of the

company should be considered. The above analysis involves making a careful

estimate of expected stream of benefits and required return of common stock. The

intrinsic value then can be obtained through the present value analysis � that is, the

dividend discounts model. An alternative method of valuation is the P/E ratio or

earning multiplier approach.

Economic Analysis

Industry Analysis

Company Analysis

Strategic considerations of economic, industry and company analyses are as follows



(1) Economic Analysis

1. A study of economic trends as indicated by rate of growth in gross national

product, employment, aggregate corporate profits, interest rate, exchange rates,

savings and investments, monsoon positions.

2. An analysis of the relationship between economic trends and economic policies

and the stability of such relationships.

3. A study of world economic trends and their impact on Indian economy.

(2) Industry Analysis

1. Implications of projected growth in gross national product for various industries.

2. Implications of plan priorities and plan expenditure for various industries.

3. Vulnerability of an industry for government regulations, and control of prices and production.

4. Implications of industrial and fiscal policies of government for an industry.

5. Analysis of competitive conditions as reflected in any barriers to entry.

(3) Company Analysis

1. Trend analyses of company�s market share.

2. An analysis of turn over of assets, operating and production efficiencies through ratio analysis.

3. Leverage and coverage ratio analysis.

4. An analysis of book value per share.

5. An assessment of quality of management

6. An analysis of price �to �earning multiples.

7. An analysis of growth in sales and dividends.

The basis tenets of this approach are as follows:



Each share has an intrinsic value. It can be determined by discounting the

future stream of benefits that does accrue to the holder of the security. For instance if

rupees 100 now is = rupees 100 + R after one year. Where R is the rate of return then

the next question is if we get rupees hundred after one year how much is it worth now.

Rupees 100 + R after one year = 100 now. Therefore rupees 100 after one year =

100/100 + R and if R = 12 % then 100/112 = .0893.

(b) Technical Approach

Technical analysis is an alternative approach to predicting the stocks price

behavior. Technical analysis is frequently used as a supplement to fundamental

analysis rather than as a substitute for it. Thus technical analysis can frequently does,

confirm findings based on fundamental analysis.

Technical analysis is viewed mainly through price and volume statistics. It

helps in measuring price � volume, supply � demand relationship for overall market

as well as for individual stocks. Technicians seldom rely upon a single indicator, as no

one indicator is infallible; they place reliance upon reinforcement provided by groups

of indicators.

(c) Modern Approach

Markovitize led down the foundation for this approach in 1951. He studied

capital market with the help of fairly sophisticated method of investigation and in

general arrived at the following conclusions.

Stock markets are reasonably efficient in reacting quickly and rationally to the

flow of information.

Successive price changes are independent. As a result past price behavior cannot

be used to predict future price behavior.

In the capital market, there is a positive relation ship between the risk and return.

This indicates, in general, investment in several securities would reduce the variability

of return and hence the risk ness of a portfolio.

2. REVIEW OF LITERATURE



Non-current accounts and Bombay Stock Exchange Sensitive (SENSEX)

Index on month-to-month basis for the said period constituted the database. The

company fundamentals and monthly share prices for 17 years of study period

supported the conduct of the present study.

Reports that industrial production, productivity, money supply and

unemployment rates are consistently influencing the share returns, Chen et. al., (1996)

proposes that the unexpected inflation, industrial production, changes in risk

premiums, etc., are crucial in Asset pricing. In a recent study Chen and Jorden (2002)

finds inflation, interest rates on government bonds, industrial production, oil prices,

etc., are germanein asset prices. In Indian environment, the study conducted by Rajan

Mookerjee (1998) observes weak linkages between changes in GDP and stock

prices, Malathy Prabhakaran, (1999), Rao and Bhole (2001), Choudhari (1998) and

others studied the impact of agriculture on stock prices and report conflicting results.

A comprehensive study on these Economic variables is awaited in Indian context.



BACKGROUND OF THE STUDY

Value investing means finding the intrinsic value of the stock. It means

present value of the future cash inflows. I take into consideration of economic,

industry and company analysis.

In Economic factors, we consider macro economic factors because it reflects

the prosperous out look for sales and profit of the firm or company. This economy

reflects behavior of the stock prices.

While macro economic theory has helped to develop risk factors like interest

rate risk, purchasing power risk, market risk and such alike; the theory of the firm

helped in delineating factors like firm�s cash dividend yield, beta coefficient as a

numeric surrogates for security�s quality rating, This is the area where the present

work focuses on. The security investment involves several type of risk diversifiable as

well as non-diversifiable. While the risk of a security is nothing but the likelihood of

the return turning out to be more or less than the expected, the total risk of an asset

may be perceived as being the sum of several different contributing risk factors like

interest rate fluctuations, market cyclical, purchasing power instability and so on. As

mentioned Donald E. Fisher and Ronald J. Joeden.

.



3 REASEARCH METHODOLOGY

a) Since the study is principally intended to examine the potential growth of

securities, which might be affected of different risk variables on security returns, a

sample of 4 industries, and selecting the profitable scrip through selecting potential

growth industries, whose scrips are actively traded during the period 1998 to 2005 has

been considered. In order to identifying the influence of exogenous variables of

economy and market in security prices information on different indicators like Gross

domestic product, Monsoon, Money supplies, Fiscal deficit etc. And for the market

observation Sensex has been used.

b) For analyzing the relationship between economic indicators and stock market

movement, the correlation tools has been used, and selecting the industry by

comparing their sales growth, dividend and its ratios has been comparatively

analyzed. On the other hand, groups of 18 financial ratios capturing the Size,

Dividend Policy, Leverage, Productivity, Liquidity, Profitability, Earnings

Variability, P/E ratios and Certain Growth Variables constituted the company specific

fundamentals of financial risk variables. The estimation of �Accounting Beta� (the

ratio of EPS of a firm in relation to the average EPS of all firms), Sales, and Earnings

have been measured as linear growth rates the testing period of most recent five-year

period.



STATEMENT OF THE PROBLEM

Investors have a lot of investment opportunities. The investor has to find good

among the alternatives. It is very difficult to find the good opportunity so this analysis

helps the investors to find good one among the alternatives. Many investors invest in

securities without analyzing the economic condition, budget decision, industry growth

rates and company factors. Then the investor end up with the losses.

Many invest insecurities by their emotional forces and many invest with out

analyzing economic conditions, budget decisions, industry growth rates and company

factors. Finally, they end up with losses. Of course, no one can predict the uncertainty

factors like September 11 attack in 2001. Despite these factors investors could reduce

the risk associated with securities through analyzing the security properly.

How much the economic factors could influence the stock market? Whether

positively or negatively have the relationship with the stock market movements.

Answering these questions enables the investors to have the perspective about the

overall economy and stock markets.

If the economy prosperous, the industries with in the economy also may also

be prosperous although few may be in the bad shape. Which industry is really having

the potentiality for growth? Knowing these factors through comparing performances

between the industries enables the investors to compare the industries and finally can

select the company which is having the opportunity for growth.



SCOPE OF THE STUDY

a) The security analysis starts from broad environmental factors to the industry,

which influences the share price and finally analyzing the company�s potentiality by

considering possible risks associated with securities.

b) Since share price of the company is empirically found to depend up to 50% on the

performance of the industry and the economy, studying those related field provide

insights for selecting the securities.

c) Budget plays a significant role while selecting the industry, as it may create a

opportunity for one industry and may not for other, the analyzing impact of budget

plan and its polices is important.

d) As research studies shows more than 35% of the share price movements depend

on the company�s performance. So, analyzing the companies� potential growth

through ratio analysis provides the valuable insights. Comparability between the

companies enables the investors selecting particular securities.



OBJECTIVE OF THE STUDY

The study was conducted with a view to,

a) The main purpose of this study is to comparatively analyze the deferent industry

performance and selecting the appropriate security by considering potentiality of the

industry.

b) Identify the returns of the securities in considering the risk, growth, and other

related variables.

c) Understand the factor influencing the security prices in different industries.

d) Analyzing the environmental factors affects the security prices.

e) Assess the future potential of the companies in the industry.

f) And aid to investor in assessing the worth of the securities



SAMPLE DESIGN

Definitions of the Population

Since the study is mainly related to selecting the appropriate security,

analyzing industries and comparison between those is necessary. Their potentiality for

growth also to be consider for selecting particular industry, where the companies in

that industry has to be analyzed through comparing between the companies

considering their relative advantages over the others.

Sample Size

All the four industries under the study are randomly selected reconsidering

differentialities in the way they do business and the product they produced has been

considered as sample and the four companies in that particular industry has been

considered as representative sample.

Sample Technique Adopted

Techniques for selecting industries is nothing but the way they doing business since

the product they produce also different. However, for the companies, the out

performing industry over the other out of the sample has been selected and the highest

sales in the latest period in the Computer and Software industry has been selected for

studying their performance.



SOURCES OF THE DATA

Secondary data

All the data has been collected through secondary sources only. These data are

a) Fiancé Ministry.

b) Various magazines books and journals and papers

c) Web sites of the companies and indices has been collected from Bombay stock

exchange

Primary data

Since the study is mainly based on the financial results of the industries and the

company and the facts of the economic factors, no such primary data has been

collected



OPERATIONAL DEFFINITIONS

Economic Analysis

Economic analysis refers to analyze the factors or indicators of the economy

that affects the stock market. This is also called non-diversifiable risk analysis where

the risk associated with the securities can not be diversified.

Industry analysis

Industry analysis refers to analyze the plan, priorities and vulnerability of an

industry for government regulations. The competitive conditions as reflected in any

barriers to industry also taken in to consideration.

Company Analysis

Company analysis includes analyze the company as potentiality for growth,

present performance, risk associated with securities are considered as important.

Correlation

Correlation is a statistical measure of the degree to which the security returns

move together. The positive correlation means the variables move together. The

negative correlation suggests that move in opposite direction and zero correlation

shows that no tendency to very either positive or negative direction.

Beta

It measures the sensitivity of the return of a security to changes in returns to

the market portfolio. It may be positive or negative. The positive beta measures that if

1% changes market index, more than 1% in individual security and vice versa.



LIMITATION OF THE STUDY

a) The economy and industry are so wide and comprehensive that is difficult to

encompass all the likely factors influencing to be captured in any set of possible

indicators.

b) Besides, the study has the limitation of the time and resources.

c) Again the study has limited to four big industries and many other sub industries

within the industries and small units have been left out. Hence, the applicability of the

study is limited to that extent.

d) Finally the study is not free from inherent limitation of collection and analysis of

the sources of the data.



OVERVIEW OF THE REPORT

Chapter one started with the introduction of the concept of security analysis,

where the investment scenario in the security takes place. The introduction part

explains about different approaches to the security that is the fundamental approach,

modern approach and technical approach. And investor�s perception about the

characteristics of growth and the value associated with securities.

Then the second part explains the background of the study, where the different

theories and tools like leverages and betas are supported for studying securities.

The second chapter starts with the statement of the problem for studying

security and explains the areas of the analysis. And it covers source of the data

literature review and operation definition of the study.

The third chapter deals with the profile of the respondents. It highlights the

economy of India, industries and the companies. In industries, it deals with growth

rate of sales and dividend of four industries namely, Computer and Software,

Pharmaceutical, Cement, and Automobile industries and also analysis of government

policies that affects performances. The export performance and competitive positions

of said industries provides the guidelines about the future of industries. And come to

the companies, it provides overview of four companies in computer and software

industry, namely Infosys, Satyam, Wipro and HCL.

The share holding patterns of each company brief history sales growth and

earning per share provides the overview of those companies.

Then in analysis part it deals with primarily the global economy, where the

Indian stock market no longer is limited to the Indian situation.

It also deals with the analysis of the economic factor affect to the stock

market. In the second part of analyzing, analyzing industries through comparison of

different ratios, sales and dividend growth that helps to select the appropriate industry

which out perform other industries.



The third part emphasizes on the companies within the Computer and

Software industry, where comparison between Infosys, Satyam, Wipro, and HCL

which are all highly traded in that related industry in the stock market, guides the

investor for selecting appropriate security which is really doing well than other

selected companies.

Finally, the conclusions and suggestions at the end provides the proper

guidelines which is drawn after analyzing the economy, industries and company

enables the investors getting perspective above overall better performance industry

and company.



OVERVIEW OF THE ECONOMY

A top down analysis of the firm�s prospects must start with a global economy.

The international economy might affect a firm�s export prospects, the price

competition it faces from competitors, or profit it makes from abroad. Certainly,

despite the fact that the economies of most countries are linked with global economy,

there is considerable variation in the economic performance across countries at any

time.

Given the degree of openness to trade and investment, it is a well-accepted

fact that the national markets are inter-related and increasingly global. When making

decisions, traders incorporate information pertaining to price movements and

volatility in the asset they are trading including information about related assets. The

movement of markets in rhythm and chorus could nullify much of the gain out of

diversification across borders, besides being vulnerable to the caprices of global

capital.

Companies are part of the industrial and business sector, which in turn is a part

of the overall economy. Thus, the performance of the company depends of the

performance of the economy in the first place. If the economy is in recession or

stagnation, centeris paribus, the performance of the company will be bad in general or

vise versa.

Since India started deregulating its financial markets in the post-liberalization

phase, her integration with the international financial markets has been proceeding

rapidly. Based on the observations it has been concluded that in the post-liberalization

era, international financial market integration has accelerated, though not yet

complete.

Indian stock markets have come of age where they have seamlessly joined

themselves with other international stock markets and no longer are the stock prices in

India governed only by the events of the local importance. As per research studies so

far, nearly 50% of the stock prices changes can be attributed to market influences,

which are general and caused by the economic, and industry factors. It is therefore



important that any stock market investment is preceded by economic analysis and

industry analysis.

Economic conditions are non-diversifiable risk. It applies to all the industries,

but some industries are expanding while others are stagnant and some contracting

depending on the demand and market conditions. The investor has to choose growth

industry from industries, and then choose the scrip under valued and judged by study

and analysis.





3. PROFILE OF THE INDUSTRIES

The forgoing section in this report had a perspective of overall Economy in India. The next

step is to analyze particular industry and compare them for selecting potential growth industry.

Once the economics analysis is over; getting the prospects of the likely trend

in the economy, analyzing the industry would be taken importance, knowing which

groups are promising in the coming year makes possible better entry into the

company. There is however, no perfect correlation between the economy and the

industry on one hand and of industries and companies on the other.

India has mixed economy, where private and public sectors play a

complementary role and promote a planned development. Since the initiation of the

reforms in 1991, even foreign enterprises and MNCs given a due role to play in the

development of the economy. As per the latest policy barring about 18 scheduled

industrial groups, others are both open to public and private sector. But as the security

market comprise only marketable securities and they are mostly form private

corporate sector and pubic undertakings which are being shifted to the joint sector.

Many financial services are thrown open to foreign sector now.



COMPUTER AND SOFTWARE INDUSTRY

Indian software industry has a mix of a few large companies and several small

to medium sized companies. Currently 37 Indian companies have exports of more

than Rs1billion. These few large companies would however be classified as small

companies by US standards. First generation entrepreneurs, who had limited access to

finance and low risk taking capability, operate most of these large companies. Smaller

companies, which are also typically entrepreneur run companies, have a similar

potential to strike it rich.

(a) Competitive Advantage- Low Cost and Location

Much of India's strong growth in software in the past is attributable to the low

cost of Indian programmers. Indian programmers repaid only about 15-20% of his/

her counterpart in developed nations. Even among competing countries Indian

software professionals were paid the least. India enjoys a location advantage. The

advantage it enjoys over other countries is a 12-hour difference with the world's

largest market - the USA. This enables US companies to establish round the clock

software factories by subcontracting to Indian companies.

(b) Export Performance

The performance of the Indian software and service exports sector for the first

three quarters, April to December 2005, FY 2004-05, the survey revealed that

software and services exports from India generated revenues of Rs. 34,000 crores in

April-Dec, 2002 This was up from Rs. 26,600 crores for the corresponding period in

the previous year, and represented a growth of 28% over the same period last year.

(c) Government Policies

Government policies so far have been favorable to software companies. If tax

exemption on exports is withdrawn it could affect software companies adversely.

WTO regards tax exemptions on exports as an indirect subsidy and hence the

government may phase out exemption in the near future. Software industry has

enjoyed virtually unbridled liberty to conduct its business in the best possible manner.

Government has also encouraged the industry by providing tax benefits to exporters.



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PHARMACEUTICAL INDUSTRY

The pharmaceutical industry is knowledge driven industry and is heavily

dependent on Research and Development for new products and growth. However,

basic research (discovering new molecules) is a time consuming and expensive

process and is thus, dominated by large global multinationals.

Global pharmaceutical market, western markets are the largest and fastest

growing due to introduction of newer molecules at high prices. A well-established

reimbursement and insurance system implies that per capita drug expenditure is a

billion normally high in Western Countries as compared to the developing nations.

The Indian pharmaceutical industry is highly fragmented, but has grown

rapidly due to the friendly patent regime and low cost manufacturing structure.

Intense competition, high volumes and low prices characterize the Indian domestic

market. Exports have been rising at around 30% over last five years.

(a) Export Performance

India�s pharmaceutical exports are to the tune of Rs87bn, of which

formulations contribute nearly 55% and the rest 45% comes from bulk drugs. In

FY2004 exports grew by 21% year. India�s pharmaceuticals imports were to the tune

of Rs20.3bn in FY2004. Imports have registered a CAGR of only 2% in the past 5

years. Imports of bulk drugs have slowed down in the past 2-3 years. . Exports have

been rising at around 30% CAGR over last five years.

(b) Competitive Position and Advantage

The Indian pharmaceutical industry is highly fragmented, but has grown

rapidly due to the friendly patent regime and low cost manufacturing structure.

Intense competition, high volumes and low prices characterize the Indian domestic

market. Over 20,000 registered pharmaceutical manufacturers exist in the country.

The market share of MNCs has fallen from 75% in 1971 to around 35% in the Indian

pharmaceuticals market, while the share of Indian companies has increased from 20%

in 1971 to nearly 65%. PSUs have almost lost out completely. The sector has



undergone several policy as well as attitudinal changes over the past two years.

Patents are the main competitive advantage.

(c) Government policy

All the benefits listed under health-care will also promote pharmaceutical

industry. Besides, income tax concessions to pharmaceuticals at par. All drugs and

materials imported or produced domestically for clinical trials will be exempt from

customs and excise duties. Customs duty on import of Reference Standards by the

industry has been reduced from 25 per cent to 5 per cent.







CEMENT INDUSTRY

The installed capacity of the industry reached 190mn tons in FY05 The

industry has added capacity of around 14mn tons during the year. India is the second

largest producer of cement after China. But the present per capita cement

consumption is around 82kgs as against the world average of 255kgs. This lower per

capita consumption presents a good opportunity for growth of cement industry in

future. The industry is expected to grow at a rate of 7-8% in FY05. The slowdown of

industrial growth witnessed in FY 2005, continued in FY01. The growth in terms of

Index of Industrial Production was 2.3% as compared to 5.8% in the previous year.

Industrial slowdown hit all the major sectors.

(a) Exports Performance

The cement sector is relatively insulated from international markets. This is

largely due to inadequate infrastructure to carry on international trade. This is amply

borne out by the fact that cement accounts for not more than 0.20% of total world

exports From a peak of 2.68mn tons in 2004-05, cement exports from India have slid

down to 2.06mn tons in 1998-99. However the situation has improved gradually. In

04 the exports were 2.77mn tons as against 2.37mn tons in FY01, an increase by

16.87%.

(b) Competitive Position

India is the world�s second largest cement producing country after China. The

industry is characterized by a high degree of fragmentation that has created intense

competitive pressure on price realizations. Spread across the length and breadth of the

country, there are 120 large plants belonging to 56 companies with an installed

capacity of around 135mn tons as on March 2005.

(c) Government Policy

Given the role the government has in fixing key input costs, it is very difficult

for a company to minimize costs beyond a point. The key driver of profitability is

cement prices, which fluctuate depending on outlook on demand-supply gaps.







AUTOMOBILE INDUSTRY

Since commercial vehicles sales have a linkage with industrial growth and

diesel prices, the demand may fall on account purchase deferment due to prolonged

uncertainties in respect of fuel prices and uniform sales taxes. The crude oil has

grown by 0.6% in the current fiscal and the sustained increase in the global crude oil

prices has led to a hefty increase in the diesel prices.

(a) Government Policy

After the rationalization of excise duty in the budget 2004-05; the special

excise duty for CVs is levied at 16% and total duty is pegged at 32%. The differential

in duty structure also affects the demand for respective segments e.g. differential duty

provisions between 8-seater and 10-seater changed the demand for each of the

segments. Over and above state governments charge sales tax and control to effect the

final prices to customer. In the current year, uniform sales tax to the tune of 04% has

been levied in all the states across India.

(i) Policy on Scrapping of Old Vehicles:

The recent notification by judicial body to ban commercial vehicles above 20

years in age in New Delhi will lead to a demand for at least 15,000 vehicles to be

satisfied in short period of time. If similar measures are implemented in other parts of

the country will boost demand for new vehicles.







PROFILE OF THE ORGANIZATIONS

INFOSYS TECHNOLOGIES LTD

BSE Code : 500209

NSE Code : INFOSYSTCHEQ

Face Value : 5

Market Lot : 1

Infosys Technologies- At a Glance

Name of the company

Infosys Technologies LTD

Incorporation year

July 2nd 1981

Industry

Computer and Software

Chairman

Mr. N R Narayana Murthy

Group

Not Applicable

Auditors

Bharat S Raut & Co.

Registered office

44, Electronics City Hosur

Road Bangalore Karnataka

561229

BSE group

A

Bankers

Bank of America

ICICI Bank Ltd.



Chart. Share Holding Pattern of Infosys as on '31/03/2005�

Category Sub Category

No. of

Securities

Held

%

Holding

Promoter's Holding Indian Promoters 53730717 19.50

Foreign Promoters 0 0.00

Persons Acting in Concert 0 0.00

Sub Total 53730717 19.50

Institutional Investors Mutual Funds and UTI 10092784 3.66

Banks, FIs, Insurance Co.s, Central / State Govt. /

Non-Govt. Institutions 7672718 2.78

FIIs 104467680 37.91

Sub Total 122233182 44.35

Others Private Corporate Bodies 3892188 1.41

Indian Public 42647831 15.48

NRI / OCBs 12385054 4.49

Any Other 40666008 14.76

Sub Total 99591081 36.14

GRAND TOTAL 275554980 100.00



BACKGROUND INFORMATION

(a) On July 2nd 1981 the company was incorporated as Infosys Consultants

Private Limited at Mumbai. The company is engaged in software development in the

form of services, turnkey projects and products for the domestic and export market.

The software development is targeted towards the distribution, banking

telecommunication and manufacturing sectors worldwide.

(b) On April 21st 1992 the name changed to Infosys Technologies Private

Limited, and the registered office was moved to Bangalore.

(c) On June 2nd 1992 company was converted into a Public Limited Company

under the name Infosys Technologies Ltd. - The Company provides software

maintenance, re-engineering and downsizing of software applications in these market

segments. It also markets internationally, two well-known packages, one for the

distribution industry (DMAP) and one for retail banking (Banks 2000). And Company

turned up with ISO 9000 certification.

(d) The Company has re-emerged as India's second most valuable company,

replacing the FMCG heavy weight, HLL in the year 2000.

(e) The company has a joint venture in USA with KSA (Kurt Salmon Associates).

KSA is a $40 million management consultancy company operating in ten cities of the

USA and also in eight different countries. The company also has an offshore software

development center for General Electric USA. Yantra Corporation is an wholly

owned subsidiary of the Company

(f) Besides the company has many subsidiaries, and branches in India as well as

abroad namely 22 in India, 15 in USA, and many countries like Germany, Japan,

Hong Kong, Canada, Australia, Us and Europe etc.



Growth Rate of Sales of Infosys Technology

0

2000

4000

6000

8000

10000sa

les

0

20

40

60

80

100

120

140

In %

sales growthe rate

020406080

100120140160180200

31-Mar-00

30-Mar-01

28-Mar-02

31-Mar-03

31-Mar-04

31-Mar-05

31-Mar-06

In R

s

-80

-60

-40

-20

0

20

40

60

80

100

IN % EPS in Rs

Growth rate

Growth Rate of EPS of Infosys Technology



WIPRO LTD

BSE Code : 507685

NSE Code : WIPROEQ

Face Value : 2

Market Lot : 1

Chart Wipro LTD � At a Glance

Name of the company

Wipro LTD

Incorporation

year

29th 1945

Industry


Chairman

Mr. Azim H Premji

Group

Wipro

Auditors

N M Raiji & Co

Registered office

Office Doddakannelli Sarjapur Road

Bangalore Karnataka 560035

BSE group

A

Bankers

Not Reported



Chart Share Holding Pattern of Wipro as on '31/03/2005�


No. of

Securities

Held

%

Holding




Sub Total 1161136260 81.44




FIIs 66695330 4.68

Sub Total 88880526 6.23



NRI / OCBs 14944157 1.05

Any Other 29515212 2.07

Sub Total 175737481 12.33

GRAND TOTAL 1425754267 100.00




(a) The Company was Incorporated on 29th 1945 December, at Mumbai. The

Company Manufacture vegetable ghee, vanaspati, and refined oils including salad oil,

soap, waxs and tin containers for packing, crushing and oil milling trading in oils and

oilseeds and manufacture of fluid power products. The Products trade names were

"Kisan", "Sunflower" and "Camel".

(b) In 1997 the name of the Company was changed from Western India Vegetable

Products Ltd., to Wipro Products Ltd., with effect from 7th June. It was again

changed to Wipro Ltd., with effect from 28th April 1984.

(c) The Company set up a joint venture company with General Electric of U.S.A.,

in the name of Wipro GE Medical Systems Pvt. Ltd., for the manufacture, sale and

service of diagnostic and imaging products. The Joint Venture has also an OEM

sourcing arrangement with Elpro International Ltd., for locally made x-ray products.

In 1990, the joint venture became a subsidiary of the Company.

(d) 1n 1990 the Company undertook to set up a high technology plant and R&D

Center at Aurangabad with an investment of Rs 40 crores. The product range was to

include incandescent lamps, linear and circular fluorescent lamps, accessories and

luminaries.

(e) 1n 2000 company has become the second largest company in terms of market

capitalization on the Bombay Stock Exchange.

(f) In 2002, the company has strong software engineering processes & also

achieved ISO 9000 certification. Wipro is the first software company to get SEI Level

5 & also implemented Six Sigma TQM practices to software projects and support

functions.

(g) Besides the company has 34 branches in India 2 branches in USA, as well as

in other countries like Japan and United Kingdom.



0

1000

2000

3000

4000

5000

6000

7000

8000

Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05

Sal

es

0

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30

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Gro

wth

sales growth rate

Growth Rate of Sales of Wipro

0

5

10

15

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25

30

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40

45

30-Mar-01

28-Mar-02

31-Mar-03

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31-Mar-05

31-Mar-06

-60

-40

-20

0

20

40

60

80

100

120

140

EPS In Rs

Growth rate

Growth Rate of EPS of Wipro



SATYAM COMPUTER SERVICE LTD

BSE Code : 500376

NSE Code : SATYAMCOMPEQ

Face Value : 2

Market Lot : 1

Chart. 3.3.3-1 Satyam Computers at a Glance

Name of the company

Satyam Computer Service LTD

Incorporation year

24th June 1987

Industry


Chairman

Mr. B. Ramalinga Raju

Group

Satyam

Auditors

Price Waterhouse

Registered office

Mayfair Center 1 Floor 1-8-

303/36 Secunderabad Andhra

Pradesh 500003

BSE group

A

Bankers

Bank of Baroda

BNP Paribas

Citibank NA.

HDFC Bank Ltd.

Hongkong & Shanghai

Banking Corporation Ltd.

ICICI Bank Ltd.

Vijaya Bank



Chart. Share Holding Pattern of Satyam as on '31/03/2005�


No. of

Securities

Held

%

Holding




Sub Total 45480204 14.02




FIIs 170270584 52.48

Sub Total 194423618 59.92



NRI / OCBs 3589153 1.11

Any Other 64682481 19.94

Sub Total 84545717 26.06

GRAND TOTAL 324449539 100.00




(a) On 24th June 1987 company was incorporated as a Private Limited Co. for

providing Software Development and Consultancy Services to large corporations. B

Rama Raju and B Ramalinga Raju promoted the company.

(b) On 26th August 1991 it was converted into a Public Limited Company.

Satyam Computer has four subsidiaries: Satyam Spark Solutions, Satyam Infoways,

Satyam enterprise Solutions and Satyam Renaissance, Consulting, Spark solutions

focuses on software products, Infoways operates in the field of electronic commerce

and electronic data interchange. Satyam Computer Services Ltd., one of the fastest

growing IT companies in the country, has taken significant decisions recently

including the merger of three of its subsidiaries with the parent company and a 1:1

bonus issue.

(c) The Company has formed a strategic alliance with Microsoft Corporation to

provide Web and enterprise integration application deployment solutions to US public

sector customers utilizing Windows DNA 2000 technology.

(d) The Company has been rated as one of the 10 most well regarded companies

in the country in prestigious 2000/2001 Review 2000 Survey conducted by the Hong

Kong-based Far Eastern Economic Review.

(e) Company has 29 branches in India and 6 branches in USA. Besides it has

many branches other counters like Germany, Malaysia, United Kingdom and

Singapore etc.



0

500

1000

1500

2000

2500

3000

3500

4000

Mar-01 Mar-02 Mar-03 Mar-04 Mar-05

Sal

es i

n R

s

0

10

20

30

40

50

60

70

80

90

In %

Saless Groeth

Growth Rate of Sales of Satyam

0

5

10

15

20

25

30

35

40

45

30-Mar-01 28-Mar-02 31-Mar-03 31-Mar-04 31-Mar-05 31-Mar-06-60

-40

-20

0

20

40

60

80

100

EPS in Rs Growth

Growth Rate of EPS of Satyam



HCL TECHNOLOGIES LTD

BSE Code : 532281

NSE Code : HCLTECHEQ

Face Value : 2

Market Lot : 1

Chart 3.3.4-1 HCL Technologies At-a Glance

Name of the company

HCL Technologies LTD

Incorporation year

12th November 1991

Industry

Computer and

software

Chairman

Mr Shiv Nadar

Group

HCL

Auditors

BSR & Co.

Registered office

806-808, Siddharth, 96, Nehru

Place New Delhi Delhi 110019

BSE group

A

Bankers

Citibank NA.

Deutsche Bank AG

ICICI Bank Ltd.

Standard Chartered

Grindlays Bank



Chart. 3.3.4-2. Share Holding Pattern of HCL as on '31/03/2005'


No. of

Securities

Held

%

Holding




Sub Total 224143150 69.44




FIIs 46393545 14.37

Sub Total 68328259 21.16



NRI / OCBs 1432203 0.44

Any Other 11687004 3.62

Sub Total 30319651 9.39

GRAND TOTAL 322791060 100.00




(a) HCL Technologies Limited was originally incorporated on 12th November

1991, as "HCL Overseas Limited". The certificate of commencement of business was

received on 10th February, 1992. On July 14, 1994, the name of the Company was

changed to "HCL Consulting Limited". The Company changed its name to "HCL

Technologies Limited" on 6th October 1999 to better reflect the line of activities of

the Company. HCL provides new technology development services to its clients.

(b) The Company has one of the largest software development infrastructures in

India. This state-of-the-art infrastructure, which comprises seven software factories, is

designed to take advantage of the high productivity and scalability as well as the

relatively lower cost of software development in India

(c) 1n 1998 the company has a rich heritage in technologies like the Internet and

e-Commerce, networking and internetworking, Internet telephony, telecom,

embedded software, ASIC/VLSI design and testing, satellite communication, wireless

communication and component based object technologies like COM, DCOM and

CORBA.

(d) In 1999, HCL Technologies has created wholly owned subsidiaries to cater to

specific geographic regions. Its major subsidiary is HCL Technologies America, 100

per cent owned by the company.

(e) HCL Technologies has entered into a strategic alliance with NASDAQ-listed

Vitesse Semiconductor to develop software solutions for global networking

markets.2001

(f) The company more than six branches in India and more than 9 branches in

USA. Besides it has many branches in other countries.



0

200

400

600

800

1000

1200

1400

1600

Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06

sale

s

-100102030405060708090

In %

sales growth rate

Growth Rate of Sales of HCL

02468

101214161820

30-Mar-01 28-Mar-02 31-Mar-03 31-Mar-04 31-Mar-05 31-Mar-06

-40

-20

0

20

40

60

80

100

EPS inRs Growth rate

Growth Rate of EPS of HCL



GLOBLE ECONOMY

In recent years, globalization of capital flows hassled to the growing relevance

of emerging capital markets and India is one of the countries with an expanding stock

market that is increasingly attracting funds from the FIIs. In particular, deregulation

and market

Liberalization measures, rapid developments in communication technology

and computerized trading systems, and increasing activities of multi national

corporations have accelerated the growth of Indian capital market. From 1999

onwards, Indian firms are raising capital from the US market by listing themselves in

US exchanges.

The economic dailies as well as official publications have been full of stories

of a newfound alliance between the NSE and the NASDAQ. Through these news

reports, market regulators, traders, and the general investing public in India have

become sensitized to the US stock market movements. Finally, a quick examination of

stock market movements of these two markets suggests that there exists a substantial

degree of inter dependence between the US and Indian stock market indices.



INDIAN ECONOMY

TRENDS IN GROWTH RATE OF GDP

Table. Trends in Growth Rate of GDP

COMPONENTS OF GROSS DOMESTIC PRODUCT (At factor cost)

Year Agriculture

change in

% Industry

change in

% Service

change in

%

1991-92 $219,660.00 $148,555.00 $333,648.00

1992-93 232,386.00 5.79 154,631.00 4.09 350,774.00 5.13

1993-94 241,967.00 4.12 164,569.00 6.43 374,809.00 6.85

1994-95 254,090.00 5.01 183,221.00 11.33 400,720.00 6.91

1995-96 251,892.00 (0.87) 206,863.00 12.90 440,808.00 10.00

1996-97 276,091.00 9.61 223,766.00 8.17 470,225.00 6.67

1997-98 269,384.00 (2.43) 230,580.00 3.05 516,631.00 9.87

1998-99 286,094.00 6.20 237,957.00 3.20 558,696.00 8.14

1999-00 286,983.00 0.31 247,595.00 4.05 613,789.00 9.86

2000-01 286,666.00 (0.11) 263,740.00 6.52 648,186.00 5.60

2001-02 304,666.00 6.28 273,004.00 3.51 690,275.00 6.49

2002-03 283,393.00 (6.98) 290,486.00 6.40 744,483.00 7.85

2003-04 310,611.00 9.60 309,422.00 6.52 810,515.00 8.87

2004-05 314,180.00 1.15 335,036.00 8.28 880,192.00 8.60

Source: Central Statistical Organization



(a) Impact of Gross domestic product

Gross domestic product is the measure of economy�s total production of goods and

services. Rapidly growing GDP indicates expanding economy with ample opportunity

for a firm to increase the sales vise versa. Penetration of GDP provides the insights on

the economy- agriculture, industry, and service sectors performance.

Correlation between Growth rates of GDP and Sensex

Table Correlation between Growth rates of GDP and Sensex

Year Growth rate of GDP Growth rate of Sensex

1998-99 6.5 26.7

1999-00 6.1 7.7

2000-01 4.4 -22.8

2001-02 5.6 -4.5

2002-03 4.4 -3.8

2003-04 7.0 8.8

2004-05 7.5 58.4

Correlation 0.843609



-40

-20

0

20

40

60

80

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

2003

-04

2004

-05

GDP

SENSEX

Relationship between GDP and Sensex



(b) Correlation

GDP has become most crucial variable affecting the stock market. As the

graph shows, there has been positive correlation 0.843 between GDP and Sensex

indicates that GDP has direct influence on stock market. Of course there are several

other factor impact the movement of Sensex, like September 11 attacks in 2001.

(c) The government is expecting that the GDP growth would be higher than last

year The Center for Monitoring Indian Economy (CMIE) raised its forecast for GDP

growth for the year ending March 31, 2005 to 7.5% from the earlier 4.4%.

TRENDS IN DEFICITS OF CENTRAL GOVERNMENT

Table Trends in Deficits of Central Government

year

Primary

deficit

Revenue

deficit

Fiscal

deficit

sensex

return

1999-00 14468 67596 104717 7.7

2000-01 19502 85234 118816 -22.8

2001-02 33495 100162 140955 -4.5

2002-03 18134 95377 135524 -3.8

2003-04 29803 104712 145466 8.8

2004-05 30414 112292 153637 58.4

co relation 0.546908924

Source: Budget document



(a) Impact of Fiscal deficit

Fiscal deficit measure the difference between government spending and

revenues. Since government borrowing must offset the budgetary shortfall, large

amounts of government borrowing can force up the interest rate by increasing the

total demand for credit in the economy.

-40

-20

0

20

40

60

80

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05

in %

change in % sensex return

Relationship between Fiscal Deficit and Sensex

(b) Correlation

The table. 4.2.2. Shows there has been positive 0.546908924 between the fiscal deficit

and Sensex, indicates that deficit does not have direct influence on Sensex. However

the relationship is negative, the above variable may move in opposite direction.

Currently the government estimate fiscal deficit for FY05 is 5.6 per cent of GDP, it

affects positively in a very lees amount to the stock market.



TRENDS IN THE SAVINGS AND INVESTMENT

Table Trends in the Savings and Investment

SECTOR-WISE DOMESTIC SAVINGS (Rupees crores)

Year Household sector

Financial

savings

Physical

savings

Total

(2+3)

Private

corporate

sector

Public

sector

Gross domestic

savings (4+5+6)

Net

domestic

savings

1 2 3 4 5 6 7 8

1994-95 120733 78625 199358 35,260 16845 251463 153469

1995-96 105719 110421 216140 58,542 24065 298747 180821

1996-97 141661 91591 233252 61,092 22917 317261 180758

1997-98 146777 121660 268437 63,486 20255 352178 200181

1998-99 180346 146456 326802 65,026 -17169 374659 206593

1999-00 205743 198658 404401 84329 -20049 468681 286322

2000-01 216774 235494 452268 86142 -48361 490049 292154

2001-02 253964 259146 513110 81076 -61912 532274 314595

2002-03 254439 320242 574681 94269 -26652 642298 409346

2003-04 314261 357431 671692 114157 -9429 776420 522783

Source: Central Statistical Organization.



(a) Impact of saving and investments

Saving and investment is the portion of amount that is saved and invested by the

people and corporate. Moderate level of saving and high investment is favorable to

stock market, but increase in savings rate indicates little scope for further

improvement.

-30

-20

-10

0

10

20

30

40

50

1999-00 2000-01 2001-02 2002-03 2003-04

investment % sensex return

Relationship between Investment Rate and Sensex

(b) Correlation

The graph shows the relation between investment and stock market was 0.56 percent)

moving in opposite way from 1999-00 onwards. Mainly because of the saving was

increasing, on the same time the investment started decrease, seems to be the Sensex

is rising.



TRENDS IN THE INTEREST RATE

Table Trends in the Interest Rate

Source: Monitory and credit policy

(a) Impact of interest rate

Interest rate is the cost of borrowing depends on nature of instruments, which

will be decided by demand and supply of money and controlled by RBI. It indicates

the attractiveness of future investment opportunity and it is key determinant of

business expenditure. High interest rate reduces the value of future cash flow as well

as opportunities for investment.

STRUCTURE OF INTEREST RATES

Year Call/Notice Commercial bank rates

money

rates (i) Deposit rates (ii) (iii) SFCs* (viii)

1 to 3 yrs. Over 3 yrs. & Above 5 yrs. PLR Rate

upto 5 yrs.

1 2 3 4 5 6 7

1999-00 8.87 8.50-9.50 ! 10.00-10.50 ! 10.00-10.50 12.00-12.50 @ 12.00-18.00

2000-01 9.15 8.50-9.00 ! 9.50-10.00 ! 9.50-10.00 11.00- 12.00 @ 9.75-17.00

2001-02 7.16 7.50-8.50 ! 8.00-8.50 ! 8.00-8.50 11.00-12.00 @ 9.50-16.75

2002-03 5.89 4.25-6.00 ! 5.50-6.25 ! 5.50-6.25 10.75-11.50 @ 9.50-14.50

2003-04 4.33 4.00-5.25 ! 5.25-5.50 ! 5.25-5.50 10.25-11.00 @ 9.50-14.51

2004-05 4.55 5.25-5.50 ! 5.75-6.25 ! 5.75-6.25 10.25-10.75 @ 9.50-14.51

2005-06 5 5.25-5.50 ! 5.75-6.25 ! 5.75-6.25 10.25-10.75 @



(b) Relationship between interest rate and stock market

As table shows interest rate declining over the period, it enables the investors

to invest in securities instead of any other instrument. Investors also can borrow the

money from other sources and could invest in stock avenues. In conclusion declining

interest rate favorable to the market as well as to the companies, where their cost on

borrowed fund reduces.

TRENDS IN MONEY SUPPLY

Table Trends in Money Supply

Year

Absolute value

(Rs, 1000

Crore)

Percentage changes Growth rate of

Sensex

1998-99 937.50 13.2 26.7

1999-00 1,124.20 14.6 7.7

2000-01 1,318.20 16.8 -22.8

2001-02 1,500.00 14.2 -4.5

2002-03 1,689.00 15.7 -3.8

2003-04 1375.69 17.7 8.8

2004-05 1627.43 18.3 58.4

Correlation 0.23442

Source: Central statistical organization



(a) Impact of money supply

A rate of increase in money supply ensures inflation is with in the permissible

limit. The table shows the correlation between money supply and Sensex was highly

negative, which indicates increase in money supply makes adverts affect on stock

market vise versa. So the money supply is also one of the crucial factor decides stock

market movement.

-20

0

20

40

60

80

100

1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05

Percentage changes Growth rate of Sensex

Relationship Between Money supply and Sensex

(b) Correlation

Above graph shows there is the negative relationship between Money supply

and Sensex as it moving in the opposite way during the year. So one should be

careful before taking investment decision in any security about the present movement

of money supply.



TRENDS IN GROWTH RATE OF INFRASTRUCTURE

Table Trends in Growth Rate of Infrastructure

Growth Rate

Year Total Energy Steel Transport and

communication

Growth

rate of

Sensex

1998-99 2.96 3.85 1.4 1.7 26.7

1999-00 10.06 6.68 15 11.6 7.7

2000-01 6.12 4.65 6.5 8.3 -22.8

2001-02 -1.56 1.61 2.4 -5.8 -4.5

2002-03 7.5 2.1 9.7 83.2 -3.8

Correlation -.07

Source: Ministry of commerce and industry, Railways, Shipping, Communication,

Statistics and program implementation.

(a) Impact of infrastructure

Investment in infrastructure developments indicates positive signal to the

sectors in the economy, especially manufacturing companies related to transportation.

In order to gain from the trade the transaction costs should be low. So the better

facility reduces the cost of trade and enables the companies for making profit.



Relationship Between Infrastructure and Sensex

(b) Correlation

The table shows there has been negative correlation between infrastructure

and Sensex, but in real sense growing infrastructure rate would show positive signal

for the economy.

(c) In the budget there � new road projects at an estimated cost of around Rs.40,

000 Crore; with a quarter of them being made of cement concrete; showing

opportunity for automobile companies as well as cement companies.

-4

-2

0

2

4

6

8

10

12

1998-99 1999-00 2000-01 2001-02 2002-03

Year

Infr

astr

uct

ure

Gro

wth

Rat

e

-30

-20

-10

0

10

20

30

Per

cen

tag

e o

f se

nse

x

nfrastructure Sensex



TRENDS IN MONSOON AND AGRICULTURAL GROWTH RATES

Table Trends in Monsoon and Agricultural Growth Rates

Year Normal Excess Deficient

Percentage of

district with

normal/excess

rain fall

Growth of

agricultural

and allied

sector

Growth rate of

Sensex

1 2 3 4 5 6 7

1998-99 20 13 2 81 6.2 26.7

1999-00 25 3 7 67 0.3 7.7

2000-01 23 5 7 66 -0.4 -22.8

2001-02 29 1 5 68 5.7 -4.5

2002-03 14 1 21 44 -3.1 -3.8

Correlatio

n between

6&7

0.53

Correlatio

n between

5&7

0.50

Source: Central statistical organization



(a) Impact of agriculture and allied products growth rate

In the Indian economy the matters to be considered in the first place is the

behavior of the monsoon and performance of agriculture. As agriculture is the main

stay of 70% of the population and contributes nearly 35% of the out put of the

economy. If the monsoon is good and agricultural income rise, the demand for

industrial products and services will be good and industry prospers.

-4

-2

0

2

4

6

8

1998 1999 2000 2001 2002 2003

Year

Mo

nso

on

Per

form

ence

-30

-20

-10

0

10

20

30

Gro

wth

Rat

e o

f S

ense

x

Agreculture and allied products Sensex

Relationship between Monsoon and Sensex

(b) Correlation

The above figure shows the relationship between agriculture and Sensex was

positive. As could be seen easily from the graph, the growth rate of both variables was

moving in the same direction, indicates that the agriculture production has direct

impact on stock market. In fact good growth in industrial and service sectors moved

the Sensex higher in 2002-03.

(c) The economic think tank expects the agricultural sector to grow by 7.5%

despite the delayed, but good start to the southwest monsoon, which is likely to lead

to better food grain output this fiscal. Thus, there is a positive sign to the stock

market.



TRENDS IN EXCHANGE RATE OF RUPEE

Trends in Exchange Rate of Rupee

EXCHANGE RATE OF THE INDIAN RUPEE,

Year US

Dollar

Pound

Sterling

Deutsche Mark Japanese Yen

@ sensex

1999-00 43.332

7

69.8510 44.7909 39.0606

7.7000

2000-01 45.684

4

67.5522 41.4832 41.4052 -

22.8000

2001-02 47.691

9

68.3189 42.1811 38.1790

-4.5000

2002-03 48.395

3

74.8193 48.0901 39.7363

-3.8000

2003-04 45.951

6

77.7389 53.9896 40.7077

8.8000

2004-05 44.931

5

82.8644 56.5130 41.8046

58.4

Co

relation

-0.3664

Source: Reserve bank of India



(a) Impact of exchange rate

Exchange rate measures the value of the rupee over the foreign currency.

Exchange rate decides international competitiveness of domestically produced goods

and it can affect import export, import and the rate of inflation domestically.

0.0000

20.0000

40.0000

60.0000

80.0000

100.0000

120.0000

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

sensex

US Dollar

Relationship between Exchange Rate and Sensex

(b) Correlation

There has been positive relationship between exchange rate and Sensex. (-

0.3664) As above table indicates initially value of money was decreased and the

Sensex also moved in the same way. In the year 2005 June the Sensex has gained,

since the value of the rupee raised. In the above graph and table it has been taken a

Dollar against Rupee.



COMPARATIVE ANALYSIS OF COMPUTER AND

SOFTWARE, PHARMACEUTICAL, CEMENT AND AUTOMOBILE

INDUSTRIES

Sales Growth Rate of Computer and Software, Pharmaceutical, Cement and

Automobile industry.

-200.0

-100.0

0.0

100.0

200.0

300.0

400.0

500.0

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

soft pharma cement auto





INFERENCE

The graphs show the growth rate of sales and dividend of different industries

respectively. When comparing between the different industries Computer and

Software industry showing the positive signal in the last year where other industries

are looking down in the dividend payment even though the sales shows bit increasing

trend. All other industries except Computer and Software industries are down ward

trend in the comming years.



COMPARATIVE STATEMENT OF RATIOS OF FOUR INDUSTRIES

CURRENT RATIO

Current Ratio

Industry 1999 2000 2001 2002 2003 2004 2005

Computer and

Software 3.52 3.61 3.42 3.18 2.66 2.54 2.8

Pharmaceutical 1.3 1.37 1.35 1.24 1.25 1.35 1.45

Cement 0.79 0.76 0.81 0.93 1.16 1.28 1.32

Automobile 1.08 1.07 1.15 1.28 1.48 1.52 1..49

Source: Financial Results of Computer and Software, Pharmaceutical, Cement and

Automobile Industries

INFERENCE

Current ratio indicates the extent of current assets available to meet current

liabilities. The satisfactory level is considered as 2:1. The above table shows current

ratio for Computer and Software is the highest in all the years, followed by

Pharmaceutical and Automobile industry and very less than the standard level in

cement industry where it will face problem in meeting current obligation.



DEBT-EQUITY RATIO

Table

Debt-equity Ratio

Industry 1999 2000 2001 2002 2003 2004 2005

Computer and

Software 0.04 0.02 0.04 0.07 0.17 0.21 0.22

Pharmaceutical 1.13 1.04 0.9 1.08 1.31 1.34 1.38

Cement 2.22 2.2 1.99 1.73 1.65 1.61 1.55

Automobile 0.91 0.9 0.85 0.86 0.91 0.95 0.93



INFERENCE

Debt-equity ratio enables the investor to analyze the long-term solvency of the

industry. In the above table solvency position of the Computer and Software industry

is good, followed by automobile. On the other hand, Pharmaceutical industry showing

not bad and Cement industry had worst case in 1999, but gradually recovering in

coming years. This high ratio indicates that the profit will be eaten away by debt

through payment of interest.



FIXED ASSETS TURNOVER RATIO

Table

Fixed Asset Turnover Ratio (in times)

Industry 1999 2000 2001 2002 2003 2004 2005

Computer and

Software 2.24 0.86 2.22 2.54 2.65 2.8 2.95

Pharmaceutical 1.34 1.26 1.44 1.21 1.27 1.35 1.43

Cement 0.84 0.85 0.86 0.88 0.9 1.22 1.4

Automobile 1.61 1.61 1.56 1.83 1.58 1.62 1.64



INFERENCE

This ratio indicates efficiency in utilizing assets. Higher the turnover implies

more efficient the industry in utilizing the assets. The above table shows the

Computer and software industry is effectively utilizing the assets, followed by

Automobile and pharmaceuticals. And the last place taken by cement industry, which

is not doing well comparing to other industries



INVENTORY TURNOVER RATIO

Table.

Inventory Turnover Ratio in (days)

Industry 1999 2000 2001 2002 2003 2004 2005

Computer and

Software 49.54 34.12 51.13 38.12 25.64 22.37 19.36

Pharmaceutical 5.14 4.98 5.6 4.99 5 5.32 5.14

Cement 9.31 9.35 8.83 8.75 7.99 7.21 6.98

Automobile 6.93 7 6.65 7.79 5.54 5.8 6.05



INFERENCE

This ratio indicates efficiency of the management in selling its product. The

high ratio indicates the products are not being sold quickly. The above table indicates

the holding period of inventory in Pharmaceutical industry was least compare to other

industries, but in the Computer and Software industry, it has high stock for selling,

however it can not be come to the conclusion that the industry can not sell the

products, because the each product consists large some of money.



DEBTORS TURNOVER RATIO

Table.

Debtors turnover ratio (in times)

Industry 1999 2000 2001 2002 2003 2004 2005

Computer and

Software 4.34 1.88 4.22 4.49 4.78 4.91 4.96

Pharmaceutical 3.53 3.64 4.09 3.66 4 4.6 4.4

Cement 16.55 17.33 15.09 12.92 11.62 10.89 11.1

Auto 8.45 8.48 7.25 6.12 3.63 4.2 3.9



INFERENCE

The debtor turnover ratio indicates the number of times the debtors� turnover

each year. Generally, the higher the value of debtors turnover the more efficient in the

industry environment in the management of credit. In the above table, the Cement is

doing well in managing the debtors, but other industries are slower in collecting

debtors, in comparing Cement industry.



RETURN ON CAPITAL EMPLOYED

Table

ROCE (%)

Industry 1999 2000 2001 2002 2003 2004 2005

Computer and

software 25.61 12.05 24.85 31.37 34.01 37.5 39.23

Pharmaceutical 0 11.75 10.28 9.8 0 8.6 9.5

Cement 0 8.26 0 0 0 9.3 11.23

Automobile 8.71 8.86 3.27 6.29 6.49 6.9 7.2



INFERENCE

The return on capital employed ratio provides a test of profitability related to

the source of long-term fund. The above table indicates that the Computer and

Software industry has return over long term-fund than other industries. The ratios

related to Computer and software industry are increasing over the years, where as the

other industries� ratio declining trend, indicates performance of these industries are

declining trend.



RETURN ON NET WORTH RATIO

Table

RONW (%)

Industry 1999 2000 2001 2002 2003 2004 2005

Computer and

software 23.3 10.16 22.84 29.74 33.74 39 43

Pharmaceutical 0 8.07 4.26 3.64 0 5.5 7.83

Cement 0 4.09 0 0 0 4.9 6.2

Automobile 2.2 2.55 -8.22 -2.09 -0.41 2.2 2.86



INFERENCE

This ratio is the most important to judge whether the industry has earned

satisfactory return for its equity-holders or not. From the above table it can be clearly

analyzed the profitability to the equity-holders increasing over the years, however the

rate of increasing has been declining. But the profitability to the equity-holders

declining over the years for other industries namely Pharmaceutical and Automobile,

where as in Automobile industry it has been negative growth, indicates that dividend

available to equity holders decreasing over the years, Cement industry also not for

behind.



COMPARATIVE ANALYSIS OF FOUR COMPANIES

0

1000

2000

3000

4000

5000

6000

7000

8000

2000 2001 2002 2003 2004 2005

SA

LE

S

H C L TechnologiesLtd.InfosysTechnologies Ltd.Satyam ComputerServices Ltd.Wipro Ltd.

Sales Growth of Infosys, Wipro, Satyam and HCL

0

50

100

150

200

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

H C L TechnologiesLtd.InfosysTechnologies Ltd.Satyam ComputerServices Ltd.Wipro Ltd.



EPS Growth Rate of Infosys, Wipro, Satyam and HCL

INFERENCE

The figure shows the sales and EPS of four companies in Computer and

Software industry respectively. Growth rate of sales of Infosys and Wipro indicates

the positive signal in the last year, but EPS of Infosys only showing positive signal.

Satyam was doing well during the middle period but failed to provide good return to

investors, HCL also far behind when comparing between these companies.



COMPARATIVE STATEMENT OF RATIOS OF FOUR COMPANIES

Category 1

MARKET VALUE RATIOS

Table Market Value Ratios

Name of the company Price Earning Ratio Market to book

Infosys 44.8 12.3

Wipro 32.6 9.65

Satyam 22.8 6.36

HCL 26.5 10.86

Source: Financial Results of Infosys, Wipro, Satyam and HCL

INFERENCE

(a) P/E Ratio

The above table shows the P/E ratio for Wipro is the highest followed by

Infosys. The general rule is P/E ratio of well-established companies is very high and

low in case of weaker ones. Earning of Wipro and Infosys justifies its high P/E ratio.

(b) Market to Book Ratio

In the table shows the Market Book Ratio of all the companies are high

(market price is triple or quadruple to its book value) which indicates, investors

having the tremendous confidence in the growth prospects of the company. Viewed in

these scenes Wipro and Infosys seem to enjoy investor�s confidence. Remaining two

companies also favorable in this regard.



Category 2

EARNING RATIOS

Table Earning Per Share Ratio

Name of

the

company 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

Infosys 40.9 43.23 95.05 122.07 144.61 186.59 70.37 87.86

Wipro 7.43 13.12 28.73 37.25 34.98 39.31 21.25 14.17

Satyam 5.6 4.8 17.29 14.29 9.77 17.57 23.5 38.21

HCL 16.72 30.42 14.26 14.97 13.77 12.47 9.48 18.19


INFERENCE

In this regard Infosys indicates more favorable than others followed by Wipro.

Satyam and HCL stand poor in this regard. However to calculate the value of shares

on the basis of this one needs the information on the normal rate of return expected by

investor in the Computer and Software industry. As this can vary from investor to

investor the same is not attempted.



Table Dividend per Share Ratio

compamy name Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05

H C L Technologies Ltd. 1.83 3.42 31.41 43.21 131.81 334.06

Infosys Technologies Ltd. 33.03 74.85 137.42 191.11 972.96 357

Satyam Computer Services Ltd. 14.18 26.05 38.85 103.23 142.96 180.49

Wipro Ltd. 10.48 14.81 23.25 26.24 761.49 401.12


INFERENCE

Dividend percentage is high in Infosys through out the period, Wipro and

HCL is found to have consistency in this regard. However to ascertain the correct

value of shares the correct value of share it is essential to include capital appreciation

also. As it is not available it is concluded that Infosys is consistently increasing from

the year 2004-05



Table Dividend Pay out Ratio

company name 200603 200503 200403 200303 200203 200103

infosys 55.1 16.65 76.12 18.91 16.49 10.67

wipro 250 1450 50 50 25 15

satyam 18.91 21.89 23.49 31.61 8.32 4.66

hcl 14.6 13.9 10.89 7.36 1.71


INFERENCE

Infosys has an edge over others in this regard from 1999-00 onwards.

Normally young aggressive growth companies have low dividend payout ratios. So it

is inferred that all the companies including Wipro and Satyam is encouraging.



Category 3

PROFITABILITY RATIOS

Table. Profitability Ratios

Return on Capital Employed

company 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

Infosys 42.44 47.4 63.17 54.42 46.94 37.51 13.73 61.12

Wipro 26.34 31.4 52.5 58.52 42.53 33.25 32.84 6.13

Satyam 25.69 32.5 33.44 45.55 33.83 24.64 27.95 29.85

HCL 24.52 30.83 42.25 46.73 38.26 -91.97 -30.3 -69.57

Return on Net Worth

company 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

Infosys 36.2 41.7 56.57 46.57 38.78 37.51 13.73 61.12

Wipro 37.83 46.55 55.1 52.94 39.29 35 31.5 5.33

Satyam 27.23 54 50.28 55.46 32.76 10.59 20.89 24.65

HCL 21.12 29.02 31.59 41.57 38 65.73 3.39 4.26


INFERENCE

The profitability ratios related to investment are no doubt impressive for all

four units over the years. However in the last year 2003-04 the ratios of all the

companies are low compare to previous two years. So, all the companies indicating

well sign in this regard.



Category 4

LIQUIDITY RATIOS

Table Liquidity Ratios

Current Ratio

Name of the company 1998-99 1999-00 2000-01 2001-02 2002-03

Infosys 6.57 4.69 3.49 3.87 3.92

Wipro 2.36 2.11 1.30 3.33 3.42

Satyam 3.99 4.64 4.93 4.17 7.05

HCL 4.66 6.04 9.47 6.68 5.11

Quick Ratio

Infosys 6.57 4.69 3.49 3.82 3.87

Wipro 1.73 1.66 1.08 3.11 3.26

Satyam 3.99 4.64 4.93 4.17 7.05

HCL 4.66 6.04 9.47 6.68 5.10


INFERENCE

From the point of view of liquidity all the concern is maintaining high

liquidity position than standard norms (2:1) incase of current ratio and (1:1) incase of

quick ratio, of course in software companies, lot of money associated with inventory

only, which is the main variable in current ratio. The above table indicates, both

Infosys and Wipro perform well compare to others.



Category 5

TURNOVER RATIOS

Table Turnover Ratios

Fixed assets Turnover Ratio

Name of the company 1998-99 1999-00 2000-01 2001-02 2002-03

Infosys 3.71 3.90 4.15 3.27 3.24

Wipro 4.35 4.44 4.62 4.53 3.92

Satyam 1.33 1.61 1.89 2.53 2.70

HCL 4.13 4.39 4.98 5.40 3.40

Debtor Turnover Ratio

Infosys 8.54 8.15 8.67 8.00 8.18

Wipro 5.50 5.89 6.19 6.07 5.54

Satyam 4.49 4.13 4.20 4.96 5.02

HCL 4.20 4.40 4.40 4.50 3.40

Average Collection Period (in days)

Infosys 43 45 42 46 45

Wipro 66 62 59 60 66

Satyam 81 88 87 74 73

HCL 86 82 83 80 106




INFERENCE

Turnover ratios in general show a favorable trend. This is comes from

financial performance of the companies. However the collection for HCL is very

slow, followed by Satyam. But Infosys �s performance is encouraging where they

manage the debtors also well.

COMPARISON BETWEEN COMPANIES THROUGH LEVERAGES

Table Leverages

Name of the company Operating Financial Combined

Infosys 0.51 0.90 0.46

Wipro 0.13 -3.00 -0.38

Satyam 0.35 -5.30 -1.86

HCL -0.87 0.53 -0.46


INFERENCE

The above table shows Infosys�s leverages are positive, it indicates that the

changes in sales by 100 percent, the changes in profit by 46 percent. However the

leverage less than one indicates the company has to bear fixed cost regardless of sales.

As the leverages which is more than one is encouraging, the negative leverage

indicated by remaining companies suggest not investing on those expect in the

Infosys.



COMPARISON BETWEEN COMPANIES THROUGH BETA

BETA ANALYSIS

Table Correlation and Betas

Name of the company Correlation Beta Values

Infosys 0.38 1.88

Wipro 0.40 2.13

Satyam 0.10 1.92

HCL 0.45 2.01

Source: Bombay Stock Exchange

INFERENCE

From the above table it can be perceived that the stocks of these companies are

very aggressive and undiversifide risk for them is very high. Comparing between the

companies, Infosys seems to be better as its beta is comparatively slow.

The experts� opinion on the utility of beta is not unanimous. The beta was very

popular in the seventies. Of late the glamour of beta seems to have faded somewhat. It

should also be noted that there is a third variable �economy. Economic events cause

systematic change in both security and market index prices. The most logical way to

forecast beta is to quantify the relationship between market and security return and

these factors.



010002000300040005000600070008000

1/1/

2001

7/1/

2001

1/1/

2002

7/1/

2002

1/1/

2003

7/1/

2003

1/1/

2004

7/1/

2004

1/1/

2005

7/1/

2005

infosyshclwiprosatyamnifty

Comparison between Share movements of Sensex, Infosys, Wipro, Satyam and HCL Companies



CONCLUSIONS

Now at the final the following facts emerge from the study security analysis for

selecting appropriate security through analyzing economy and industry

a) When come to the economic factors the global economies are getting interrelated,

the Indian market will no longer be limited to domestic economic situation.

b) As far as the Indian economy is concerned, the GDP is the primary factor, has the

positive correlation with the Sensex, which directly affects the overall market and

followed by other factor. Where the GDP is forecasted at 8% for the present year as

compared against 4.3%in the year 2002-03, showing good sign for the stock market.

c) Agricultural growth rate and the monsoon both has direct influence on stock

market and responsible for the economy to become prospers. It has the correlation

0.50 with the Sensex indicates the stock market would be prospers only when the

agriculture grow well.

d) The exchange rate has the positive correlation with the Sensex. In the resent trend

the value of the rupee is going up, shows positive signs to stock market, as Sensex

also associated with that movement.

e) When come to the Industrial Factors, in the year 2004-05 the overall growth

different sector according to CMIE report would be: The growth of service sector

would be 7%, same as it was in the previous year 2003-04. On the other hand, growth

of industrial sector is forecasted at 4.5% in 2003-04 as against 5.8% in 2002-03. As

the service sector is the main part of GDP in the present year 2003-04, the Computer

and Software industry, which is part of the Service sector is given weight than other

Industrial sectors.

f) When compare the ratios of Computer and software, Cement, Automobile and

Pharmaceutical industries, the computer and software industry provides handsome

return to the investors.



g) Except the computer and software industry, all other industry�s short-term

solvency position is not good. Of course, the remaining ratios also far behind

compared Computer and Software industry.

h) As the main part of the sales in the Computer and Software industry takes place

through export only, it is sensitive to the global economy and has high risk. It is also

from the fact that the September 11 attack in 2001, many software companies has

been affected than any other industries. Even though the above factors Computer

and Software industry is selected where it shows better opportunities for growth than

other industries.

i) Then come to the companies, all the units under study are financially sound and

performance indicator reveals the same.

j) Market potentials for growth of these units are quite encouraging.

k) Fundamentals of those companies are quite strong. None of the fundamental,

signals for disinvestments for moving out of computer and software industry.

l) When compare to the specific indicators like sales growth and EPS, the Infosys

will in the first place then followed by Wipro and remaining those Satyam and HCL

could be left out because, the sales and EPS and other ratios are encouraging.

m) The market to book ratio of all the companies are high indicates the existing

investors have an interest about the overall industry and think that still the

opportunities exists for these companies.

n) The leverages of all the companies shows negative mark except Infosys, reveals

the Infosys is only encouraging comparing to Wipro, Satyam and HCL companies.

o) When comparing the betas between the companies Infosys is less volatile to

overall market which is having the beta1.88, followed by Wipro having the beta 1.92

and the remaining Satyam and Wipro crossed the beta value two.



SUGGESTIONS

a) After a close scrutiny of economy industries and companies in considering the

risk, it may be recommended that international economy might affects the firms

export prospects, the price competition it faces from competitors, or the profit it

makes from abroad. Certainly, despite the fact that the economies of most countries

are linked with the global economy, there is a considerable variation in the economic

performance across the different countries at any time; investor should properly

analyze both globally and domestically before taking investment decision.

b) The investor also should consider the budget decision and present years forecast

of different sectors. Comparisons between the different is also necessary because of

companies perform well when potential opportunity exists for industry.

c) Even though the industry may perform well, the companies in the that particular

industry may suffer form lack of ability or any other factor, one should scrutinize the

performance of the company, in considering importantly, sales growth, leverages,

betas, P/E ratio and market to book ratios

d) It may be pointed out that to make out generalization in this regard is not very

easy. This is because of share do not always retaining their lustre. There are several

instances of quite blue chip of yester years now languishing in a colorless state. It is

the personal intuition, sensing patterns of behavior, there is always something

unknown and undeserved. So the points to be noted are

No one should purchase on whim.

Investment in shares is a serious business.

e) However, there are such things as a final answer to security values, a dozens

experts arrive at twelve different conclusions. Market values are fixed only in part by

balance sheet and income statement; much more by hopes and fears of humanity; by

greed, by act of god, where the investor should carefully consider the emotional

factors influence the market.



f) Of all the systems, the researcher is of the view that fundamental analysis even

today holds good. It demands, may insist on information about the company. It

requires subjecting a company�s performance and its financial statements to in-depth

scrutiny. It also calls for the company and industry in which the company operates



BIBLIOGRAPHY

A. TEXT BOOKS

i) Donald, E. Fisher and Ronald, J. Jorden, �Security Analysis and

Portfolio Management�, (6th ed.), New Delhi, Prentice Hall India,

2002.

ii) M. Y. Khan and P. K. Jain, �Financial Management�(3rd ed.),

Tata McGraw-Hill, New Delhi, 2002

B. NEWS PAPERS

i) Mangesh Soman and Arnav Pandya/ETIG, �Sensex Monsoon

Correlation is Only Skin Deep�, Economics Times, June-10-2003.

ii) Tushar, k. Mhanti/ETIG, �Lower Interest Cost Key to India

Inc�s Net Profit Growth in 02-03�, Economics Times, May-15-

2003.

iii) �Economic Growth Projected 6.5%�, Vijay Times, July-12-

2003

C. WEB DOCUMENTS

i) http:/www.bseindia/historicaldata/betavalues.html.

ii) http:/www.bseindia/charts.

iii) http:/www.finministry/unionbudjet/budgetglance.htm.

MohanKumar D R-0491-Fundamental Analysis of Securities

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