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project on equity research and sector analysis

  1. 1. Executive SummaryThe report encompasses the project undertaken with Edelweiss Financial Securities Ltdunder the guidance of Mr. Om Sadani as part of Summer Internship.It gives the details of what is National Stock Exchange (N.S.E) and Bombay Stock Exchange(B.S.E) actually means. It also gives a brief about Edelweiss Financial Securities Ltd. Thereport contains the details of the work performed at the Edelweiss and some responsibilitiesunder taken.The report takes into consideration the following parameters i.e.:  Equity Research  Daily Market Analysis Report  Daily Sector Comparison ReportIt provides with the basic of how online trading is done. It also gave a brief introduction toIndian Stock markets and its comparison with the international market. It also providedinformation on global markets which is being highlighted in this report.Through this project we also came to know about the comparison between the sectors forexample in this project comparison between Banking and IT sector have taken in toconsideration. We also learned about option, futures, forwards and swaps. This project alsohighlights the behavior of investors towards a particular sector in BSE and NSE. This projectgives us information about the how volatile ours share market is and how the trend of aparticular sector and Equity Stock changes in a given period. This project also highlightsdifferent sectors. Through this project we also came to known about portfolio managementservices. 1|Page
  2. 2. Company Profile Edelweiss Tokio Financial ServicesEdelweiss Tokio Life Insurance is a new generation Insurance company, set up with a start upcapital of INR 550 Crores, thereby showing our commitment to building a long term sustainablebusiness focused on a consumer centric approach.The company is a joint venture between Edelweiss Financial Services, one of Indias leadingdiversified financial services companies with business straddling across Credit, Capital Markets,Asset Management, Housing finance and Insurance and Tokio Marine Holdings Inc, one of theoldest and the biggest Insurance companies in Japan now with presence across 39 countriesaround the world.As a part of the company‘s corporate philosophy of customer centricity, our products have beendeveloped based on our understanding of Indian customers‘ diverse financial needs and help themthrough all their life stagesSince its inception in 1996, Edelweiss has seamlessly grown into a large diversifiedfinancial services organization offering businesses ranging from Credit, Capital Market,Asset management, Housing Finance and Insurance. Currently, the groups networth is inexcess of INR 2,800 Crores. Over the last decade, Edelweiss revenue has grown at a CAGRof 63% and net profit has grown at a CAGR of 76% (till the end of FY 11).Present across 308 offices in 140 cities, the group, with over 2800 employees, and servicesa client base of more than 3,50,000 (Sept 11).The Groups core brand philosophy, Ideas Create, Values Protect is translated into anapproach that is led by entrepreneurship and creativity, protected by intellectual rigour,research and analysis. Edelweiss has been recognized as a Business Super brand in the year2011 by Super Brands India, testimony to the reputation enjoyed by the brand. 2|Page
  3. 3. Tokio MarineTokio Marine Holdings Inc, the holding company for Tokio Marine group is one of theoldest and biggest Insurance companies in Japan; with interests in Life, Non-Life, and Re-Insurance, it has a presence in 427 cities across 39 countries around the world.The company has over 130 years of operational history in the Non-Life sector while it hasbeen in Life Insurance since 1996. It has a presence in Japan, China, Singapore, Malaysiaand Thailand.The Group has booked revenues of INR 1,77,650 Crore and Net Income of INR 3,884Crore.In Life Insurance its Gross Written Premium (GWP) is over INR 31,834 Crore.A highly respected company around the world, Tokio Marine adheres to Japanese highstandards of quality and a robust corporate governance and risk management framework.Tokio Marine has a successful track record of building business in developing anddeveloped markets due to its superior capability of developing products based on researchand consumer understanding. 3|Page
  4. 4. Financial services by Edelweiss TokioCapital Market  Investment Banking  Institutional Broking  Wealth Management  Financial PlanningAsset Management  Mutual fund  Alternative asset advisoryInsurance  Edelweiss tokio lifeCredit  Corporate credit  Retail creditHousing Finance  Home lones 4|Page
  5. 5. LITERATURE REVIEWThe Indian stock market provides a unique perspective for analyzing comovements and stockmarket integrationbecause of its burgeoning economy and its subsequent linkages to othereconomies. For instance, Modi et al.(2010) examined the stock market indices of India, HongKong, China, Mexico, Brazil, the UK, and the UnitedStates from July 1, 1997, to June 30, 2008.Using a multivariate analysis consisting of co-integration and principalcomponent analysis, they found thatlow correlations exist between Indian stock markets and Mexico, the UK,and the United States.Modi etal. also found that the lowest correlations exist between the India (SENSEX) andU.S.(NASDAQ) stock exchanges.The implications are that investors can diversify their portfolios by investingin stocks listed onthe SENSEX and NASDAQ simultaneously.Wong et al. (2004) observed this relationship by evaluating thelong run and short run relationship and linkagesbetween the Indian Stock Exchange (BSE 200) andthe United States (S&P 500), Japan (Nikkei 225), and UK(FTSE 100) from January 1, 1991,to December 31, 2003. Wong et al. found that the Indian stock market isintegrated withdeveloped markets and sensitive to dynamics in these markets in the long run. The researchersalso foundthat short-run stock returns in the United States and Japan Granger cause Indian stockmarkets but notthe opposite. Granger causality is a technique that examines the relationshipbetween two or more time series byexamining whether times series are co-integrated overboth the short and long run. Valadkhani,Chancharat, andHarvie (2008) studied therelationships between the stock market returns of 13 countries using principlecomponentanalysis. Monthly data from 1987 to 2007 was examined for correlations using MorganStanleyCapital International Database. Valadkhaniet al. found that high correlations existbetween countries located in thesame geographic region primarily Asia. Additionally, a correlation werefound to be high in developing countriesas well.These findings suggest that geographic and economicdevelopment do matter with respect to comovements of stock returns and has implications for financialportfolio diversification and reducing systemic risk. In otherwords, high correlations depictless diversification opportunities. The implications are that investors shouldseek diversification opportunities where correlations are low. Likewise, Jin (2005) observedthis relationship betweenShanghai, Hong Kong, and Taiwan markets. Daily, weekly, andmonthly data were retrieved from three indices inhost countries from July 1997 to December2001.The findings revealed that the Hong Kong and Taiwan stock markets are highly correlated whilethe correlations among Hong Kong, Taiwan, and Shanghai were not, eventhough economicintegration was shown by examining trade.The researcher further suggests that the Chinesegovernment avoid interfering with the marketand allow the market to perform accordingly. He also found that thelack of correlation amongShanghai, Hong Kong, and Taiwan depicts that investors are able to diversify theirportfolios by investing inShanghai and Hong Kong or Shanghai and Taiwan stock markets simultaneously.Economic integrationallows investors to diversify their portfolios. However, economic integration is not the onlyfactor thataffects co-movements. 5|Page
  6. 6. Global events and financial crises also affect comovements.For instance, I. Meric, Ratner,Nygren, and Gulser (2007) compared the comovements of seven Latin Americancountieswith the U.S. and Canadian equity markets 5 years before September 11, 2001, and 5 yearsafterSeptember 11, 2001, using maximum likelihood, principal component analysis (PCA),and Granger causality.They found that equity markets changed significantly pre-September11 and post-September 11. The PCAindicated that all nine equity markets changed afterSeptember 11. I. Meric et al. also found Granger causalitydepicted that the lead/lagrelationship changed significantly after September 11. I. Mericetal. found thatdiversificationbenefits diminished after September 2001in these stock markets and reduced the advantagesof global portfolio diversification.Article byInternational Journal of Business and Social Science Vol. 3 No. 3; February 2012COMOVEMENTS AND STOCK MARKET INTEGRATION BETWEEN INDIA AND ITSTOPTRADING PARTNERS: A MULTIVARIATE ANALYSIS OF INTERNATIONALPORTFOLIODIVERSIFICATIONAlan Harper, Ph.D.College of BusinessSouth UniversityVirginia Beach, Virginia 23464USAZhenhu Jin, Ph.D.College of BusinessValparaiso UniversityValparaiso, Indiana 46385USa 6|Page
  7. 7. RATIONALE FOR THE STUDYIn an industry plagued with skepticism and a stock market increasingly difficult to predictand contend with, if one looks hard enough there may still be a genuine aid for the DayTrader and Short Term Investor.The price of a security represents a consensus. It is the price at which one person agrees tobuy and another agrees to sell. The price at which an investor is willing to buy or sell dependsprimarily on his expectations. If he expects the securitys price to rise, he will buy it; if theinvestor expects the price to fall, he will sell it. These simple statements are the cause of amajor challenge in forecasting security prices, because they refer to human expectations. Aswe all know firsthand, humans expectations are neither easily quantifiable nor predictable.If prices are based on investor expectations, then knowing what a security should sell for (i.e.,fundamental analysis) becomes less important than knowing what other investors expect it tosell for. Thats not to say that knowing what a security should sell for isnt important--it is.But there is usually a fairly strong consensus of a stocks future earnings that the averageinvestor cannot disproveFundamental analysis and technical analysis can co-exist in peace and complement eachother. Since all the investors in the stock market want to make the maximum profits possible,they just cannot afford to ignore either fundamental or technical analysis. 7|Page
  8. 8. OBJECTIVES OF THE STUDYPrimary Objective: To do equity analysis & Sector analysisSub-Objectives:. a) To understand the movement and performance of stocks. b) Comparison between banking & IT sector.c) To recommend increase/decrease of investment in a particular security 8|Page
  9. 9. INTRODUCTION TO BOMBAY STOCK EXCHANGE (B.S.E)The Bombay Stock Exchange (BSE) (Bombay Śhare Bāzaār) (formerly, The StockExchange, Bombay) is a stock exchange located on Dalal Street, Mumbai and is the oldeststock exchange in Asia. The equity market capitalization of the companies listed on the BSEwas US$1 trillion as of December 2011, making it the 6th largest stock exchange in Asia andthe 14th largest in the world The BSE has the largest number of listed companies in theworld.As of March 2012, there are over 5,133 listed Indian companies and over 8,196 scrips on thestock exchange, the Bombay Stock Exchange has a significant trading volume. The BSESENSEX, also called "BSE 30", is a widely used market index in India and Asia. Thoughmany other exchanges exist, BSE and the National Stock Exchange of India account for themajority of the equity trading in India. While both have similar total market capitalization(about USD 1.6 trillion), share volume in NSE is typically two times that of BSEBSE Limited is the oldest stock exchange in Asia What is now popularly known as the BSEwas established as "The Native Share & Stock Brokers Association" in 1875.Over the past 135 years, BSE has facilitated the growth of the Indian corporate sector byproviding it with an efficient capital raising platform.Today, BSE is the worlds number 1 exchange in the world in terms of the number of listedcompanies handled through its electronic trading system. And it is in the top ten of globalexchanges in terms of the market capitalization of its listed companies (as of December 31,2009). The companies listed on BSE command a total market capitalization of USD Trillion1.28 as of Feb, 2010.BSE is the first exchange in India and the second in the world to obtain an ISO 9001:2000certification. It is also the first Exchange in the country and second in the world to receiveInformation Security Management System Standard BS 7799-2-2002 certification for its BSEOn-Line trading System (BOLT). Presently, we are ISO 27001:2005 certified, which is a ISOversion of BS 7799 for Information Security. 9|Page
  10. 10. The BSE Index, SENSEX, is Indias first and most popular Stock Market benchmark index.Exchange traded funds (ETF) on SENSEX, are listed on BSE and in Hong Kong. Futures andoptions on the index are also traded at BSE. (over 4900). It is the worlds 5th most active interms of number of transactions Hours of operation Session TimingBeginning of the Day Session 8:30 - 9:00 Pre-open trading session 9:00 - 9:15 Trading Session 9:15 - 15:30 Position Transfer Session 15:30 - 15:50 Closing Session 15:50 - 16:05 Option Exercise Session 16:05 - The hours of operation for the BSE quoted above are stated in terms the local time (GMT + 5:30). BSEs normal trading sessions are on all days of the week except Saturday, Sundays and holidays declared by the Exchange in advance. 10 | P a g e
  11. 11. HistoryThe Bombay Stock Exchange is the oldest exchange in Asia. It traces its history to the 1850s,when four Gujarati and one Parsi stockbroker would gather under banyan trees in front ofMumbais Town Hall. The location of these meetings changed many times, as the number ofbrokers constantly increased. The group eventually moved to Dalal Street in 1874 and in1875 became an official organization known as The Native Share & Stock BrokersAssociation.In 1956, the BSE became the first stock exchange to be recognized by the Indian Governmentunder the Securities Contracts Regulation Act. The Bombay Stock Exchange developed theBSE SENSEX in 1986, giving the BSE a means to measure overall performance of theexchange. In 2000 the BSE used this index to open its derivatives market, trading SENSEXfutures contracts. The development of SENSEX options along with equity derivativesfollowed in 2001 and 2002, expanding the BSEs trading platform. Historically an openoutcry floor trading exchange, the Bombay Stock Exchange switched to an electronic tradingsystem in 1995.It took the exchange only fifty days to make this transition. This automated, screen-basedtrading platform called BSE On-line trading (BOLT) currently has a capacity of 8 millionorders per day. The BSE has also introduced the worlds first centralized exchange-basedinternet trading system, to enable investors anywhere in the world to tradeon the BSE platform. The BSE is currently housed in Phiroze Jeejeebhoy Towers at DalalStreet, Fort area. 11 | P a g e
  12. 12. TimelineFollowing is the timeline on the rise of the SENSEX through Indian stock market history.1830s Business on corporate stocks and shares in Bank and Cotton presses started inMumbai.1860-1865 Cotton price bubble as a result of the American Civil War.1870 - 90s Sharp increase in share prices of jute industries followed by a boom in tea stocksand coal1978-79 Base year of SENSEX, defined to be 100.1986 SENSEX first compiled using a market Capitalization-Weighted methodology for 30component stocks representing well-established companies across key sectors.30 October 2006 The SENSEX on October 30, 2006 crossed the magical figure of 13,000and closed at 13,024.26 points, up 117.45 points or 0.9%. It took 135 days for the SENSEXto move from 12,000 to 13,000 and 123 days to move from 12,500 to 13,000.5 December 2006 The SENSEX on December 5, 2006 crossed the 14,000-mark to touch14,028 points. It took 36 days for the SENSEX to move from 13,000 to the 14,000 mark.6 July 2007 The SENSEX on July 6, 2007 crossed the magical figure of 15,000 to touch15,005 points in afternoon trade. It took seven months for the SENSEX to move from 14,000to 15,000 points.19 September 2007 The SENSEX scaled yet another milestone during early morning tradeon September 19, 2007. Within minutes after trading began, the SENSEX crossed 16,000,rising by 450 points from the previous close. The 30-share Bombay Stock Exchangessensitive index took 53 days to reach 16,000 from 15,000. Nifty also touched a new high at4659, up 113 points. The SENSEX finally ended with a gain of 654 points at 16,323. TheNSE Nifty gained 186 points to close at 4,732.26 September 2007 The SENSEX scaled yet another height during early morning trade onSeptember 26, 2007. Within minutes after trading began, the SENSEX crossed the 17,000-mark. Some profit taking towards the end saw the index slip into red to 16,887 - down 187points from the days high. The SENSEX ended with a gain of 22 points at 16,921.9 October 2007 The BSE SENSEX crossed the 18,000-mark on October 9, 2007. It took just8 days to cross 18,000 points from the 17,000 mark. The index zoomed to a new all-timeintra-day high of 18,327. It finally gained 789 points to close at an all-time high of 18,280.The market set several new records including the biggest single day gain of 789 points atclose, as well as the largest intra-day gains of 993 points in absolute term backed by frenziedbuying after the news of the UPA and Left meeting on October 22 put an end to the worriesof an impending election. 12 | P a g e
  13. 13. 15 October 2007 The SENSEX crossed the 19,000-mark backed by revival of funds-basedbuying in blue chip stocks in metal, capital goods and refinery sectors. The index gained thelast 1,000 points in just four trading days. The index touched a fresh all-time intra-day high of19,096, and finally ended with a smart gain of 640 points at 19,059.The Nifty gained 242points to close at 5,670.29 October 2007 The SENSEX crossed the 20,000 mark on the back of aggressive buying byfunds ahead of the US Federal Reserve meeting. The index took only 10 trading days to gain1,000 points after the index crossed the 19,000-mark on October 15. The major drivers oftodays rally were index heavyweights Larsen and Toubro, Reliance Industries, ICICI Bank,HDFC Bank and SBI among others. The 30-share index spurted in the last five minutes oftrade to fly-past the crucial level and scaled a new intra-day peak at 20,024.87 points beforeending at its fresh closing high of 19,977.67, a gain of 734.50 points. The NSE Nifty rose to arecord high 5,922.50 points before ending at 5,905.90, showing a hefty gain of 203.60 points.8 January 2008 The SENSEX peaks. It crossed the 21,000 mark in intra-day trading after 49trading sessions. This was backed by high market confidence of increased FII investment andstrong corporate results for the third quarter. However, it later fell back due to profit booking.13 June 2008 The SENSEX closed below 15,200 mark, Indian market suffer with majordownfall from January 21, 200825 June 2008 The SENSEX touched an intra day low of 13,731 during the early trades, thenpulled back and ended up at 14,220 amidst a negative sentiment generated on the ReserveBank of India hiking CRR by 50 bps. FII outflow continued in this week.2 July 2008 The SENSEX hit an intra day low of 12,822.70 on July 2, 2008. This is thelowest that it has ever been in the past year. Six months ago, on January 10, 2008, the markethad hit an all time high of 21206.70. This is a bad time for the Indian markets, althoughReliance and Infosys continue to lead the way with mostly positive results.6 October 2008 The SENSEX closed at 11801.70 hitting the lowest in the past 2 years.10 October 2008 The SENSEX today closed at 10527, 800.51 points down from the previousday having seen an intraday fall of as large as 1063 points. Thus, this week turned out to bethe week with largest percentage fall in the SENSEX.19 October 2010 BSE introduced the 15-minute special pre-open trading session, amechanism under which investors can bid for stocks before the market opens. Themechanism, known as pre-open session call auction, lasted for 15 minutes (from 9:00-9:15am)5 November 2010 BSE SENSEX crossed the 21000 mark (exactly 21004.96).27 December 2010 BSE SENSEX is at 20,028.93. 13 | P a g e
  14. 14. IndicesThe launch of SENSEX in 1986 was later followed up in January 1989 by introduction ofBSE National Index (Base: 1983-84 = 100). It comprised 100 stocks listed at five major stockexchanges in India - Mumbai, Calcutta, Delhi, Ahmedabad and Madras. The BSE NationalIndex was renamed BSE-100 Index from October 14, 1996 and since then, it is beingcalculated taking into consideration only the prices of stocks listed at BSE.BSE launched the dollar-linked version of BSE-100 index on May 22, 2006. BSE launchedtwo new index series on 27 May 1994: The BSE-200 and the DOLLEX-200. BSE-500Index and 5 sectoral indices were launched in 1999. In 2001, BSE launched BSE-PSU Index,DOLLEX-30 and the countrys first free-float based index - the BSE TECk Index.Over the years, BSE shifted all its indices to the free-float methodology (except BSE-PSUindex). BSE disseminates information on the Price-Earnings Ratio, the Price to Book ValueRatio and the Dividend Yield Percentage on day-to-day basis of all its major indices. Thevalues of all BSE indices are updated on real time basis during market hours and displayedthrough the BOLT system, BSE website and news wire agencies.All BSE Indices are reviewed periodically by the BSE Index Committee. This Committeewhich comprises eminent independent finance professionals frames the broad policyguidelines for the development and maintenance of all BSE indices. The BSE Index Cellcarries out the day-to-day maintenance of all indices and conducts research on developmentof new indices. 2011 SENSEX is significantly correlated with the stock indices of otheremerging markets. The graph of SENSEX from July 1997 to March. 14 | P a g e
  15. 15. AwardsThe World Council of Corporate Governance has awarded the Golden PeacockGlobal CSR Award for BSEs initiatives in Corporate Social Responsibility (CSR).The Annual Reports and Accounts of BSE for the year ended March 31, 2006 andMarch 31, 2007 have been awarded the ICAI awards for excellence in financialreporting.It has been cited as one of the worlds best performing stock market by Reuters.The Human Resource Management at BSE has won the Asia - Pacific HRM awardsfor its efforts in employer branding through talent management at work, healthmanagement at work and excellence in HR through technology. Bombay StockExchange - Finance Learners 15 | P a g e
  16. 16. INTRODUCTION TO NATIONAL STOCK EXCHANGE (N.S.E)The National Stock Exchange (NSE) (Hindi: Rashtriya Śhare Bāzaār) is astock exchange located at Mumbai, India. It is the 16th largest stock exchange in the world bymarket capitalization and largest in India by daily turnover and number of trades, for bothequities and derivative trading. NSE has a market capitalization of around US$985 billionand over 1,646 listings as of December 2011. Though a number of other exchanges exist,NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India,and between them are responsible for the vast majority of share transactions. The NSEs keyindex is the S&P CNX Nifty, known as the NSE NIFTY (National Stock Exchange Fifty), anindex of fifty major stocks weighted by market capitalisation.NSE is mutually owned by a set of leading financial institutions, banks, insurance companiesand other financial intermediaries in India but its ownership and management operate asseparate entities. There are at least 2 foreign investors NYSE Euronext and Goldman Sachswho have taken a stake in the NSE. As of 2006, the NSE VSAT terminals, 2799 in total,cover more than 1500 cities across India. NSE is the third largest Stock Exchange in theworld in terms of the number of trades in equities. It is the second fastest growing stockexchange in the world with a recorded growth of 16.6%.The National Stock Exchange (NSE) is Indias leading stock exchange covering various citiesand towns across the country. NSE was set up by leading institutions to provide a modern,fully automated screen-based trading system with national reach. The Exchange has broughtabout unparalleled transparency, speed & efficiency, safety and market integrity. It has set upfacilities that serve as a model for the securities industry in terms of systems,practices&procedures.NSE has played a catalytic role in reforming the Indian securities market in terms ofmicrostructure, market practices and trading volumes. The market today uses state-of-artinformation technology to provide an efficient and transparent trading, clearing andsettlement mechanism, and has witnessed several innovations in products & services viz.demutualisation of stock exchange governance, screen based trading, compression ofsettlement cycles, dematerialisation and electronic transfer of securities, securities lendingand borrowing, professionalization of trading members, fine-tuned risk management systems,emergence of clearing corporations to assume counterparty risks, market of debt andderivative instruments and intensive use of information technology. 16 | P a g e
  17. 17. OriginsThe National Stock Exchange of India was set up by Government of India on therecommendation of Pherwani Committee in 1991.Promoted by leading Financial institutionsessentially led by IDBI at the behest of the Government of India, it was incorporated inNovember 1992 as a tax-paying company. In April 1993, it was recognized as a stockexchange under the Securities Contracts (Regulation) Act, 1956. NSE commenced operationsin the Wholesale Debt Market (WDM) segment in June 1994. The Capital market (Equities)segment of the NSE commenced operations in November 1994, while operations in theDerivatives segment commenced in June 2000.PurposeCommitted to improve the financial well-being of people.VisionTo continue to be a leader, establish global presence, facilitate the financial well being ofpeople. 17 | P a g e
  18. 18. ValuesNSE is committed to the following core values :IntegrityCustomer focussed cultureTrust, respect and care for the individualPassion for excellenceTeamworkMarketsCurrently, NSE has the following major segments of the capital market: Equity Futures and options Retail debt market Wholesale debt market Currency futures Mutual fund Stocks lending and borrowingIn August 2008 currency derivatives were introduced in India with the launch of CurrencyFutures in USD INR by NSE. Currently it has also launched currency futures in euros,pounds and yen. Interest Rate Futures were introduced for the first time in India by NSE on31 August 2009, exactly one year after the launch of Currency Futures.NSE became the first stock exchange to get approval for interest rate futures, Asrecommended by SEBI-RBI committee, on 31 August 2009, a futures contract based on 7%10 Year Government of India (Notional) was launched with quarterly maturities. Hours NSEs normal trading sessions. 9:15 AM TO 3:15(3:30) pm Milestones November 1992 Incorporation April 1993 Recognition as a stock exchange May 1993 Formulation of business plan June 1994 Wholesale Debt Market segment goes live November 1994 Capital Market (Equities) segment goes live March 1995 Establishment of Investor Grievance Cell April 1995 Establishment of NSCCL, the first Clearing Corporation June 1995 Introduction of centralised insurance cover for all trading members July 1995 Establishment of Investor Protection Fund October 1995 Became largest stock exchange in the country April 1996 Commencement of clearing and settlement by NSCCL 18 | P a g e
  19. 19. April 1996 Launch of S&P CNX NiftyJune 1996 Establishment of Settlement Guarantee FundNovember 1996 Setting up of National Securities Depository Limited, first depositoryin India, co-promoted by NSENovember 1996 Best IT Usage award by Computer Society of IndiaDecember 1996 Commencement of trading/settlement in dematerialised securitiesDecember 1996 Dataquest award for Top IT UserDecember 1996 Launch of CNX Nifty JuniorFebruary 1997 Regional clearing facility goes liveNovember 1997 Best IT Usage award by Computer Society of IndiaMay 1998 Promotion of joint venture, India Index Services & Products Limited(IISL)May 1998 Launch of NSEs Web-site: 1998 Launch of NSEs Certification Programme in Financial MarketAugust 1998 CYBER CORPORATE OF THE YEAR 1998 award yes.February 1999 Launch of Automated Lending and Borrowing MechanismApril 1999 CHIP Web Award by CHIP magazineOctober 1999 Setting up of NSE.ITJanuary 2000 Launch of NSE Research InitiativeFebruary 2000 Commencement of Internet TradingJune 2000 Commencement of Derivatives Trading (Index Futures)September 2000 Launch of Zero Coupon Yield CurveNovember 2000 Launch of Broker Plaza by Dotex International, a joint venturebetween NSE.IT Ltd. and i-flex Solutions Ltd.December 2000 Commencement of WAP tradingJune 2001 Commencement of trading in Index OptionsJuly 2001 Commencement of trading in Options on Individual SecuritiesNovember 2001 Commencement of trading in Futures on Individual SecuritiesDecember 2001 Launch of NSE VaR for Government SecuritiesJanuary 2002 Launch of Exchange Traded Funds (ETFs)May 2002 NSE wins the Wharton-Infosys Business Transformation Award in theOrganization-wide Transformation categoryOctober 2002 Launch of NSE Government Securities IndexJanuary 2003 Commencement of trading in Retail Debt MarketJune 2003 Launch of Interest Rate FuturesAugust 2003 Launch of Futures & options in CNXIT IndexJune 2004 Launch of STP InteroperabilityAugust 2004 Launch of NSE‘s electronic interface for listed companiesMarch 2005 ‗India Innovation Award‘ by EMPI Business School, New DelhiJune 2005 Launch of Futures & options in BANK Nifty IndexDecember 2006 Derivative Exchange of the Year, by Asia Risk magazineJanuary 2007 Launch of NSE – CNBC TV 18 media centreMarch 2007 NSE, CRISIL announce launch of IndiaBondWatch.comJune 2007 NSE launches derivatives on Nifty Junior & CNX 100October 2007 NSE launches derivatives on Nifty Midcap 50January 2008 Introduction of Mini Nifty derivative contracts on 1 January 2008March 2008 Introduction of long term option contracts on S&P CNX Nifty IndexApril 2008 Launch of India VIXApril 2008 Launch of Securities Lending & Borrowing SchemeAugust 2008 Launch of Currency Derivatives 19 | P a g e
  20. 20. August 2009 Launch of Interest Rate FuturesNovember 2009 Launch of Mutual Fund Service SystemDecember 2009 Commencement of settlement of corporate bondsFebruary 2010 Launch of Currency Futures on additional currency pairsOctober 2010 Launch of 15-minute special pre-open trading session, a mechanismunder which investors can bid for stocks before the market opens.October, 2010 Introduction of Currency Options on USD INROctober, 2010 Introduction of European Style Stock OptionsNovember, 2010 Launch of mobile trading for all investorsDecember, 2010 NSCCL rated CCR AAA for third consecutive year.January, 2011 NSE receives "Financial Inclusion" Award.July, 2011 Commencement of trading in 91 Day GOI Treasury Bill – FuturesAugust 2011 Launch of derivatives on Global IndicesSeptember 2011 Launch of derivatives on CNX PSE and CNX Infrastructure IndicesDecember 2011 NSCCL Rated ―CCR AAA‖ for fourth consecutive year - 28th Dec2011March 14, 2012 NSE launches ―EMERGE‖ – SME PlatformMarch 22, 2012 NSE and India Post start Unique Financial Inclusion Initiative"Jagruti" 20 | P a g e
  21. 21. IndicesNSE also set up as index services firm known as India Index Services & Products Limited(IISL) and has launched several stock indices, including: S&P CNX Nifty(Standard & Poors CRISIL NSE Index) CNX Nifty Junior CNX 100 (= S&P CNX Nifty + CNX Nifty Junior) S&P CNX 500 (= CNX 100 + 400 major players across 72 industries) CNX Midcap (introduced on 18 July 2005 replacing CNX Midcap 200) Graph of S&P CNX Nifty from January 1997 to March 2011 21 | P a g e
  22. 22. Exchange Traded Funds on NSENSE has a number of exchange traded funds. These are typically index funds and GOLDETFs. Some of the popular ETFs available for trading on NSE are:Equity ETFs on NSE: Nifty – Goldman Sachs Nifty Exchange Traded Scheme (NIFTYBEES) Junior Nifty – Goldman Sachs Nifty Junior Exchange Traded Scheme (JUNIORBEES) Bank – Goldman Sachs Banking Index Exchange Traded Scheme (BANKBEES) PSU Bank – Goldman Sachs PSU Bank Exchange Traded Scheme (PSUBNKBEES) Shariah – Goldman Sachs S&P CNX Nifty Shariah Index Exchange Traded Scheme (SHARIABEES) Infrastructure – Goldman Sachs Infrastructure Exchange Traded Scheme (INFRABEES) S&P CNX Nifty UTI Notional Depository Receipts Scheme (UTISUNDER) KOTAK PSU Bank ETF (KOTAKPSUBK) Reliance Banking ETF (RELBANK) Quantum Index ETF (QNIFTY) KOTAK NIFTY (KOTAK NIFTY) MOSt Shares M50 ETF (M50) MOSt Shares M100 ETF (M100)Gold ETFs: AXIS MF – AXIS GOLD ETF (AXISGOLD) GOLDMAN SACHS GOLD EXCHANGE TRADED SCHEME (GOLDBEES) UTI GOLD ETF (GOLDSHARE) HDFC GOLD ETF (HDFCMFGETF) ICICI PRUDENTIAL GOLD ETF (IPGETF) KOTAK GOLD ETF (KOTAKGOLD) QUANTUM GOLD FUND (QGOLDHALF) RELIANCE GOLD ETF (RELGOLD) RELIGARE GOLD ETF (RELIGAREGO) SBI MF-SBI GOLD ETS-GO (SBIGETS) IDBI GOLD ETF (IDBIGOLD) (Newly added)World Indices ETFs: GS Hang Seng BeES (HNGSNGBEES) MOSt Shares NASDAQ 100 (N100)Debt ETFs: GS Liquid BeES (LIQUIDBEES) 22 | P a g e
  23. 23. CertificationsNSE also conducts online examination and awards certification, under its programmes ofNSEs Certification in Financial Markets (NCFM). Currently, certifications are available in32 modules, covering different sectors of financial and capital markets, both at beginner andadvanced levels. the list of the various modules can be found at the following official site ofNSE India. Branches of the NSE are located throughout India. NSE, in collaboration withreputed colleges and institutes in India, has been offering a short-term course called NSECertified Capital Market Professional (NCCMP) since August 2009, in the campuses of therespective colleges/ institutes. 23 | P a g e
  24. 24. INTRODUCTIONInvesting, like marriage, isnt something that should be entered into lightly. Investing inequities gives high returns but they correspondingly have higher risk also. Before we investin a company, there are more than a few things we need to know about it.Securities AnalysisAn analysis of securities and the organization and operation of their markets. Thedetermination of the risk reward structure of equity and debt securities and their valuation.Special emphasis on common stocks. Other topics include options, mutual fluids andtechnical analysis.Technical analysis is a method of predicting price movements and future market trends bystudying charts of past market action which take into account price of instruments, volume oftrading and, where applicable, open interest in the instruments.Fundamental analysis is a method of forecasting the future price movements of a financialinstrument based on economic, political, environmental and other relevant factors andstatistics that will affect the basic supply and demand of whatever underlies the financialinstrument. Main differences between the two types of analysis: Fundamental analysis Technical analysis Focuses on what ought to Focuses on what actually happen in a market happens in a market Factors involved in price Charts are based on market analysis: action involving: 1. Supply and demand 1.Price 2.Seasonal cycles 2.Volume 3.Weather 3. Open interest (futures 4. Government policy only) 24 | P a g e
  25. 25. TECHNICAL ANALYSISTechnical analysis can be conditionally divided into some main parts such as: Types of charts Graphical methods Analytical methodsTechnical analysis is concerned with predicting future price trends from historical price andvolume data. The underlying axiom of technical analysis is that all fundamentals (includingexpectations) are factored into the market and are reflected in exchange rates.A technical analysis is based on three axioms: Movement of the market considers everything Movement of prices is purposeful History repeats itself SUPPORT AND RESISTANCESupport is a level at which bulls (i.e., buyers) take control over the prices and prevent themfrom falling lower.Resistance, on the other hand, is the point at which sellers (bears) take control of prices andprevent them from rising higher. The price at which a trade takes place is the price at which abull and bear agree to do business. It represents the consensus of their expectations.Support levels indicate the price where the most of investors believe that prices will movehigher. Resistance levels indicate the price at which the most of investors feel prices willmove lower. 25 | P a g e
  26. 26. Role ReversalWhen a resistance level is successfully broken through, that level becomes a support level.Similarly, when a support level is successfully broken through, that level becomes aresistance level.DOW THEORY– TRENDS:The ideas of Charles Dow, the first editor of the Wall Street Journal, form the basis oftechnical analysis. The Dow theory is a method of interpreting and signaling changes in thestock market direction based on the monitoring of the Dow Jones Industrial andTransportation Averages. Dow created the Industrial Average, of top blue chip stocks, and asecond average of top railroad stocks (now the Transport Average). He believed that thebehavior of the averages reflected the hopes and fears of the entire market. The behaviorpatterns that he observed apply to markets throughout the world.Three MovementsMarkets fluctuate in more than one time frame at the same time:Nothing is more certain than that the market has three well defined movements which fit intoeach other. The first is the daily variation due to local causes and the balance of buying and selling at that particular time. The secondary movement covers a period ranging from ten days to sixty days, averaging probably between thirty and forty days. The third move is the great swing covering from four to six years. 26 | P a g e
  27. 27. Bull markets are broad upward movements of the market that may last several years, interrupted by secondary reactions. Bear markets are long declines interrupted by secondary rallies. These movements are referred to as the primary trend. Secondary movements normally retrace from one third to two thirds of the primary trend since the previous secondary movement. Daily fluctuations are important for short-term trading, but are unimportant in analysis of broad market movements.Various cycles have subsequently been identified within these broad categories.Primary Movements have Three PhasesThe general conditions in the market:Bull markets Bull markets commence with reviving confidence as business conditions improve. Prices rise as the market responds to improved earnings Rampant speculation dominates the market and price advances are based on hopes and expectations rather than actual results.Bear markets Bear markets start with abandonment of the hopes and expectations that sustained inflated prices. Prices decline in response to disappointing earnings. Distress selling follows as speculators attempt to close out their positions and securities are sold without regard to their true value. 27 | P a g e
  28. 28. TrendsBull TrendsA bull trend is identified by a series of rallies where each rally exceeds the highest point ofthe previous rally. The decline, between rallies, ends above the lowest point of the previousdecline.Successive higher highs and higher lows.The start of an up trend is signaled when price makes a higher low (trough), followed by arally above the previous high (peak): Start = higher Low + break above previous High.The end is signaled by a lower high (peak), followed by a decline below the previous low(trough): End = lower High + break below previous Low.A bear trend starts at the end of a bull trend: when a rally ends with a lower peak and thenretreats below the previous low. The end of a bear trend is identical to the start of a bull trend. 28 | P a g e
  29. 29. FUNDAMENTAL ANALYSISFundamental analysis refers to the study of the core underlying elements that influence theeconomy of a particular entity. It is a method of study that attempts to predict price action andmarket trends by analyzing economic indicators, government policy and societal factors (toname just a few elements) within a business cycle framework.I. ECONOMIC ANALYSIS:POLITICO-ECONOMIC ANALYSIS:No industry or company can exist in isolation. It may have splendid managers and atremendous product. However, its sales and its costs are affected by factors, some of whichare beyond its control - the world economy, price inflation, taxes and a host of others. It isimportant, therefore, to have an appreciation of the politico-economic factors that affect anindustry and a company.II. INDUSTRY ANALYSISThe importance of industry analysis is now dawning on the Indian investor as never before.1. BARRIER TO ENTRYNew entrants increase the capacity in an industry and the inflow of funds. The question thatarises is how easy is it to enter an industry ?There are some barriers to entry:a) Economies of scaleb) Product differentiationc) Capital requirementd) Government policy2. THE THREAT OF SUBSTITUTIONNew inventions are always taking place and new and better products replace existing ones.An industry that can be replaced by substitutes or is threatened by substitutes is normally anindustry one must be careful of investing in. An industry where this occurs constantly is thepackaging industry -bottles replaced by cans, cans replaced by plastic bottles, and the like. Toward off the threat of substitution, companies often have to spend large sums of money inadvertising and promotion. 29 | P a g e
  30. 30. 3. BARGAINING POWER OF THE BUYERSIn an industry where buyers have control, i.e. in a buyers market, buyers are constantlyforcing prices down, demanding better services or higher quality and this often erodesprofitability.4. BARGAINING POWER FOR THE SUPPLIERSAn industry unduly controlled by its suppliers is also under threat.5. RIVALRY AMONG COMPETITORSRivalry among competitors can cause an industry great harm. This occurs mainly by pricecuts, heavy advertising, additional high cost services or offers, and the like.III. COMPANY ANALYSIS:At the final stage of fundamental analysis, the investor analyzes the company. This analysishas two thrusts:How has the company performed vis-à-vis other similar companies andHow has the company performed in comparison to earlier yearsIt is imperative that one completes the politico economic analysis and the industry analysisbefore a company is analyzed because the companys performance at a period of time is to anextent a reflection of the economy, the political situation and the industry. What does onelook at when analyzing a company?The different issues regarding a company that should be examined are:The ManagementThe CompanyThe Annual ReportRatiosTHE MANAGEMENT:The single most important factor one should consider when investing in a company and oneoften never considered is its management.In India management can be broadlydivided in two types:Family ManagementProfessional Manageme 30 | P a g e
  31. 31. RESEARCH METHODOLOGY & DESIGN  TYPE OF STUDYThe research has been based on primary as well as secondary data analysis. The study hasbeen exploratory as it aims at examining the secondary data for analyzing the previousresearches that have been done in the area of technical and fundamental analysis of stocks.The knowledge thus gained from this preliminary study forms the basis for the furtherdetailed Descriptive research. In the exploratory study, the various technical indicators thatare important for analyzing stock were actually identified and important ones short listed.  SAMPLE DESIGNThe sample of the stocks for the purpose of collecting secondary data has been selected onthe basis of Random Sampling. The stocks are chosen in an unbiased manner and each stockis chosen independent of the other stocks chosen. The stocks are chosen from the DifferentSector.  SAMPLE SIZEThe sample size for the number of stocks is taken as 3 in each sector for technical analysisand fundamental analysis of stocks as fundamental analysis is very exhaustive and requiresdetailed study. 31 | P a g e
  32. 32. Sector analysis Banking sector STATE BANK OF INDIAState Bank of India (SBI) (NSE: SBIN, BSE: 500112, LSE: SBID) is the largest bankingand financial services company in India by revenue, assets and market capitalisation. It is astate-owned corporation with its headquarters in Mumbai, Maharashtra. As of March 2012, ithad assets of US$360 billion with over 13,577 outlets including 157 overseas branches andagents globally. The bank traces its ancestry to British India, through the Imperial Bank ofIndia, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bankin the Indian Subcontinent. Bank of Madras merged into the other two presidency banks—Bank of Calcutta and Bank of Bombay—to form the Imperial Bank of India, which in turnbecame the State Bank of India. The Government of India nationalised the Imperial Bank ofIndia in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the StateBank of India. In 2008, the government took over the stake held by the Reserve Bank ofIndia. SBI has been ranked 285th in the Fortune Global 500 rankings of the worlds biggestcorporations for the year 2012.SBI provides a range of banking products through its vast network of branches in India andoverseas, including products aimed at non-resident Indians (NRIs). The State Bank Group,with over 18,324 branches, has the largest banking branch network in India. SBI has 14 localhead offices situated at Chandigarh, Delhi, Lucknow, Patna, Kolkata, Guwahati (North EastCircle), Bhuwaneshwar, Hyderabad, Chennai, Trivandram, Banglore, Mumbai, Bhopal &Ahmedabad and 57 Zonal Offices that are located at important cities throughout the country.It also has 157 branches overseas.SBI is a regional banking behemoth and is one of the largest financial institutions in theworld. It has a market share among Indian commercial banks of about 20% in deposits andloans. The State Bank of India is the 29th most reputed company in the world according toForbes Also, SBI is the only bank featured in the coveted "top 10 brands of India" list in anannual survey conducted by Brand Finance and The Economic Times in 2010 32 | P a g e
  33. 33. State Bank of India Type Public Industry Banking, Financial services Founded 1 July 1955Headquarters Mumbai, Maharashtra, India Key people Pratip Chaudhuri Credit cards, Consumer banking, corporate banking, finance and insurance, investment Products banking, mortgage loans, private banking, wealth management Revenue US$ 36.950 billion (2012) Profit US$ 03.202 billion (2012)Total assets US$ 359.237 billion (2012)Total equity US$ 20.854 billion (2012) Owner(s) Government of India Employees 292,215 (2012) 33 | P a g e
  34. 34. Share Holding Pattern in (%) Sep 11 Jun 11 Mar 11 Dec 10Promoter 59.40 59.40 59.40 59.40 FII 8.65 10.88 12.80 13.36 DII 18.54 17.45 16.57 15.59 Others 13.41 12.27 11.23 11.65 Total 100.00 100.00 100.00 100.00 Income Statement (Mar 12) (Mar 12) Quarterly Yearly Net Sales 28695.50 106521.45 Other Income 5264.04 14351.45 PBDIT 23448.13 94803.91 Net Profit 4050.27 11707.29 Balance Sheet (Mar 12) (In Rs Cr) Total Share Capital 671.04 Net Worth 83951.20 Total Debt 1170652.93 Net Block 5133.87 Investments 312197.61 Net Current Assets 805918.48 Total Assets 1335519.24 34 | P a g e
  35. 35. SBI - 5 YEAR CHART 4000 3000 2000 1000 0 02/Apr/07 02/Apr/08 02/Apr/09 02/Apr/10 02/Apr/11 02/Apr/12 Close Price 52 Week High 2529.70 52 Week Low 1571.10  Returns BANKS 1 Month 3 6 Month 1 Year 3 Year 5 Year Month 1) SBI -3.85 % -8.37 % 16.60 % -10.54 % 9.97 % 51.99 % SBI Comprising The Nifty& Sensex 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year SBI -3.85 % -8.37 % 16.60 % -10.54 % 9.97 % 51.99 %SENSEX -5.8125 % -8.1144 % 1.1702 % -11.841 % 11.5341 % 11.9513 % NIFTY -5.6667 % -8.0674 % 2.4565 % -10.960 % 11.2790 % 16.022 % INTERPRETATION The table shows that the SBI stock have provided a better returns to the investors as ithas shown a growth of around 51.99% in 5 years. It shows a very volatile trend, in firstmonth SBI stock shown a negative trend and it continues to the same till 1 year and thenbecomes positive in the 5 th year. This states that it is a long term investment call or longterm investment stock. 35 | P a g e
  36. 36. ICICI BANKICICI Bank Limited (NSE: ICICIBANK, BSE: 532174, NYSE: IBN) is an Indiandiversified financial services company headquartered in Mumbai, Maharashtra. It is thesecond largest bank in India by assets and third largest by market capitalization. It offers awide range of banking products and financial services to corporate and retail customersthrough a variety of delivery channels and through its specialized subsidiaries in the areas ofinvestment banking, life and non-life insurance, venture capital and asset management. TheBank has a network of 2,630 branches and 8,003 ATMs in India, and has a presence in 19countries, including IndiaThe bank has subsidiaries in the United Kingdom, Russia, and Canada; branches in UnitedStates, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International FinanceCentre; and representative offices in United Arab Emirates, China, South Africa, Bangladesh,Thailand, Malaysia and Indonesia. The companys UK subsidiary has established branches inBelgium and GermanyICICI Bank was established in 1996 by the Industrial Credit and Investment Corporationof India, an Indian financial institution, as a wholly owned subsidiary. The parent companywas formed in 1955 as a joint-venture of the World Bank, Indias public-sector banks andpublic-sector insurance companies to provide project financing to Indian industry The bankwas initially known as the Industrial Credit and Investment Corporation of India Bank,before it changed its name to the abbreviated ICICI Bank. The parent company was latermerged into ICICI Bank 36 | P a g e
  37. 37. Type Public BSE: 532174 Traded as NSE: ICICIBANK Industry Banking, Financial services Founded 1955Headquarters Mumbai, Maharashtra, India K. V. Kamath (Chairman) Key people Chanda Kochhar (MD & CEO) Credit cards, Consumer banking, corporate banking, finance and insurance, investment Products banking, mortgage loans, private banking, wealth management Revenue US$ 13.812 billion (2011) Profit US$ 01.366 billion (2011)Total assets US$ 119.69 billion (2011)Total equity US$ 12.401 billion (2011) Employees 79,978 (2011) Website 37 | P a g e
  38. 38. Share Holding Pattern in (%) Sep 11 Jun 11 Mar 11 Dec 10Promoter 0.00 0.00 0.00 0.00 FII 38.17 38.61 38.62 39.23 DII 25.24 25.14 24.19 23.43 Others 36.59 36.25 37.19 37.34 Total 100.00 100.00 100.00 100.00 Income Statement (Mar 12) (Mar 12) Quarterly Yearly Net Sales 9174.64 33542.65 Other Income 2228.46 7502.76 PBDIT 8712.16 31611.93 Net Profit 1901.76 6465.26 Balance Sheet (Mar 12) (In Rs Cr) Total Share Capital 1152.77 Net Worth 60402.86 Total Debt 395664.87 Net Block 4614.69 Investments 159560.04 Net Current Assets 228680.85 Total Assets 473647.09 38 | P a g e
  39. 39. ICICI BANK - 5 YEAR CHART 2000 1500 1000 Close Price 500 0 02/Apr/07 02/Apr/08 02/Apr/09 02/Apr/10 02/Apr/11 02/Apr/12 52 Week High 1111.80 52Week Low 641.00  Returns BANKS 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year ICICI -11.02 % -13.48 % 9.82 % -27.78 % 5.88 % -14.64 % BANK ICICI BANK Comprising with Nifty & Sensex 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year ICICI -11.02 % -13.48 % 9.82 % -27.78 % 5.88 % -14.64 % BANK SENSEX -5.8125 % -8.1144 % 1.1702 % -11.841 % 11.5341 % 11.9513 % NIFTY -5.6667 % -8.0674 % 2.4565 % -10.960 % 11.2790 % 16.022 % INTERPRETATION The indices have shown volatile trend in past as shown in the table. Sensex and Niftyboth were negative till the 3 month and then becomes positive in 6 month which again showsam positive trend till the 5th year. This states that the stock currently is performing well andwill provide good returns to investors. 39 | P a g e
  40. 40. HDFC BANKHDFC Bank Limited (BSE: 500180, NSE: HDFCBANK, NYSE: HDB) is an Indianfinancial services company that was incorporated in August 1994. HDFC Bank is the fifth orsixth largest bank in India by assets and the second largest bank by market capitalization as ofFebruary 24, 2012. The bank was promoted by the Housing Development FinanceCorporation, a premier housing finance company (set up in 1977) of India. HDFC Bank has1,986 branches and over 5,471 ATMs, in 996 cities in India, and all branches of the bank arelinked on an online real-time basis. As of 30 September 2008 the bank had total assets ofRs.1006.82 billion.[3] For the fiscal year 2010-11, the bank has reported net profit of3,926.30 crore (US$710.66 million), up 33.1% from the previous fiscal. Total annualearnings of the bank increased by 20.37% reaching at 24,263.4 crore (US$4.39 billion) in2010-11.[4] HDFC Bank is one of the Big Four banks of India, along with: State Bank ofIndia, ICICI Bank and Punjab National Bank.HDFC Bank was incorporated in 1994 by Housing Development Finance CorporationLimited (HDFC), Indias largest housing finance company. It was among the first companiesto receive an in principle approval from the Reserve Bank of India (RBI) to set up a bank inthe private sector. The Bank started operations as a scheduled commercial bank in January1995 under the RBIs liberalisation policies.Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged withHDFC Bank Ltd., in 2000. This was the first merger of two private banks in India.Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of TimesBank.In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to morethan 1,000. The amalgamated bank emerged with a base of about Rs. 1,22,000 crore and netadvances of about Rs.89,000 crore. The balance sheet size of the combined entity is morethan Rs. 1,63,000 crore 40 | P a g e
  41. 41. Type Public BSE: 500180 NSE: HDFCBANK Traded as NYSE: HDB BSE SENSEX Constituent Industry Banking, Financial services Founded August 1994Headquarters Mumbai, Maharashtra, India Key people Aditya Puri (MD) Credit cards, consumer banking, corporate banking, finance and insurance, investment Products banking, mortgage loans, private banking, private equity, wealth management Revenue US$ 05.585 billion (2011) Profit US$ 0923.8 million (2011)Total assets US$ 65.483 billion (2011)Total equity US$ 07.769 million (2011) Employees 55,752 (2011) Website 41 | P a g e
  42. 42. Share Holding Pattern in (%) Sep 11 Jun 11 Mar 11 Dec 10Promoter 23.23 23.28 23.35 23.40 FII 29.30 29.23 28.53 29.37 DII 10.97 11.14 11.61 10.86 Others 36.50 36.35 36.51 36.37 Total 100.00 100.00 100.00 100.00 Income Statement (Jun 12) (Mar 12) Quarterly Yearly Net Sales 8007.42 27286.35 Other Income 1529.49 5243.69 PBDIT 6617.00 22502.73 Net Profit 1417.39 5167.07 Balance Sheet (Mar 12) (In Rs Cr) Total Share Capital 469.34 Net Worth 29924.38 Total Debt 270552.96 Net Block 2347.19 Investments 97482.91 Net Current Assets 162397.47 Total Assets 337909.49 42 | P a g e
  43. 43. HDFC BANK - 5 Year Chart 600 500 400 300 200 Close 100 0 01/06/2007 01/06/2008 01/06/2009 01/06/2010 01/06/2011 52 Week High 558.00 52Week Low 400.25  Returns BANKS 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year HDFC -2.81% 3.379% 2.018% -4.29% 17.33% 75.66% BANK HDFC BANK Comprising with Nifty & Sensex 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year HDFC -2.81% 3.379% 2.018% -4.29% 17.33% 75.66% BANK SENSEX -5.815 % -8.1144 % 1.1702 % -11.841 % 11.5341 % 11.9513 % NIFTY -5.666 % -8.0674 % 2.4565 % -10.960 % 11.2790 % 16.022 % INTERPRETATION The above data shows the volatility in HDFC equity stock. In the year2008 - 2009 Ithas fallen and shown negative trend but after that it shows a upward moving curve whichstates that the stock is performing well and has provided satisfactory returns to the investors.The growth up to 75.66008% have been recorded in the current year as compared to the year2007 43 | P a g e
  44. 44.  Comprising chart of returns of SBI , ICICI & HDFC Bank (%) INTERPRETATION According to graph, the ICICI bank equity has fallen more as compared to the SBIand HDFC and continues to show a negative trend till the current year. The SBI equity stockis highly volatile as compared to the other two. As compared to year 2007 the SBI stockgrown up to 137.84% in 2010 – 2011 but currently is fallen down to 67.71%. The HDFCequity has shown a positive upward moving trend consistently after 2009 till the current yearwhich states that stock is less volatile. 44 | P a g e
  45. 45. Banking Index 52 week High 11451.21 52 week Low 7766.67 Returns from Banking Sector 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year -8.1328 -9.35% 10.23% -14.33% 27.30% 47.40% Returns from sensex 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year -5.81252 -8.11% 1.17% -11.84% 11.53% 11.95% Returns from Nifty 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year -5.66676 -8.06% 2.45% -10.96% 11.24% 16.02% INTERPRETATIONIn the long the banking sector have provided the returns on investment was around 47.4050which is nearer to 50%. This states that the fund invested in banking sector will grow up to ½time i.e. 50% in the long run. Further Sensex and nifty both have provided better returns ascompared to the other sectors. As stock banking sector are volatile one must invest for longerperiod of time. Investor must not get afraid with the volatile trend. As per records theBanking Sector will provide a better returns in longer duration of investment 45 | P a g e
  46. 46. IT SECTOR INFOSYSInfosys Limited formerly Infosys Technologies Limited (BSE: 500209, NSE: INFY,NASDAQ: INFY) is an Indian provider of business consulting, technology, engineering andoutsourcing services. Its headquartered in Bangalore, India. It has offices in 30 countries anddevelopment centers in India, US, China, Australia, UK, Canada, Japan and many othercountriesInfosys was co-founded in 1981 by N. R. Narayana Murthy, Nandan Nilekani, N. S.Raghavan, S. Gopalakrishnan, S. D. Shibulal, K Dinesh and Ashok Arora after they resignedfrom Patni Computer Systems. Today, Infosys is a global leader in the "next generation" ofIT and consulting with revenues of billion (FY12).Infosys ranked among the most innovativecompanies in a Forbes survey, leading technology companies in a report by The BostonConsulting Group and top ten green companies in Newsweeks Green RankingsInfosys was voted Indias most admired company in The Wall Street Journal Asia 200 everyyear since 2000. The corporate governance practices were recognized by The Asset Platinumaward and the IR Global Rankings.Infosys was also ranked as the 15th most trusted brand in India by The Brand Trust ReportIn 1996, Infosys established the Infosys Foundation, operating in the areas of health care,social rehabilitation and rural uplift, education, arts and culture. Since then, this foundationhas spread its activities from its headquarters in Karnataka to the Indian states of Tamil Nadu,Andhra Pradesh, Maharashtra, Kerala, Orissa and Punjab in a phased manner.A dedicatedteam at the Foundation identifies programs in the areas of Healthcare, Education, Culture,Destitute Care and Rural Development 46 | P a g e
  47. 47. Type Public Industry IT services, IT consulting N. R. Narayana Murthy Nandan NilekaniFounder(s) N. S. Raghavan S. Gopalakrishnan S. D. Shibulal Services IT, business consulting and outsourcing services Revenue US$ 6.99 billion (2012)Operating US$ 2.01 billion (2012) income Profit US$ 1.71 billion (2012)Total assets US$ 7.53 billion (2012)Total equity US$ 6.57 billion (2012)Employees 151,151 (2012) Divisions Infosys BPO, Infosys China Website 47 | P a g e
  48. 48. Share Holding Pattern in (%) Sep 11 Jun 11 Mar 11 Dec 10Promoter 16.04 16.04 16.04 16.04 FII 36.66 36.88 36.12 36.60 DII 10.71 9.84 9.00 8.43 Others 36.59 37.24 38.84 38.93 Total 100.00 100.00 100.00 100.00 Income Statement (In Rs Cr) (Jun 12) (Mar 12) Quarterly Yearly Net Sales 8909.00 31254.00 Other Income 459.00 1829.00 PBDIT 3261.00 11890.00 Net Profit 2204.00 8470.00 Balance Sheet (Mar 12) (In Rs Cr) Total Share Capital 287.00 Net Worth 29757.00 Total Debt 0.00 Net Block 4061.00 Investments 1409.00 Net Current Assets 23266.00 Total Assets 48 | P a g e
  49. 49. INFOSYS - 5 YEAR CHART 4000 3500 3000 2500 2000 1500 1000 500 0 Close Price 52 Week High 2994.00 52Week Low 2150.00  Returns IT 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year INFOSYS -0.932% -15.14% -6.43% -12.06% 52.30% 27.05% INFOSYS Comprising with Nifty & Sensex 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year INFOSYS -O.932% -15.14% -6.43% -12.06% 52.30% 27.05% SENSEX -5.815 % -8.1144 % 1.1702 % -11.841 % 11.5341 % 11.9513 % NIFTY -5.666 % -8.0674 % 2.4565 % -10.960 % 11.2790 % 16.022 % INTERPRETATION The Infosys stock has not shown a consistent growth. In the 3rd year it moved up to52.30% but has fallen down and remained on 27.05% of growth in the current year whichstates that the it is not performing well currently as compared to the past years. 49 | P a g e
  50. 50. Tata Consultancy Services LimitedTata Consultancy Services Limited (TCS) (BSE: 532540, NSE: TCS) is an Indian provider ofinformation technology (IT) services, business solutions and outsourcing services. It is a subsidiary ofTata Group conglomerate headquartered at Mumbai, Maharashtra, India. TCS is one of Indias mostvaluable companiesOn August 9, 2004 TCS became a publicly listed company.In 2005 TCS ventured into a new area for an Indian IT services company—Bioinformatics.[12]In 2006 TCS designed the ERP for IRCTC.In 2008 TCS went through an internal restructuring exercise that executives claim wouldbring about agility to the organization.TCS entered the Small and medium enterprises (SME) market for the first time in 2011, withcloud-based offerings.In the 2011 fiscal year TCS achieved U$10 billion in annual revenues for the first time.Tata Consultancy Services signed a Rs 94-crore deal with the Karnataka government for six-year period to automate its treasury and finance department operations. Deutsche Bank hasselected TCS as a strategic partner for their Production Management TransformationInitiative, within their Capital Markets Business Unit. TCS has got contract from CreditUnion Australia. TCS has received a multi-year, multi-million dollar contract to provideapplication support, maintenance and development services to the gases company AirLiquide.[20] A book titled The TCS Story... and Beyond published by the PenguinGroup,was authored by S Ramadorai, now TCS‘s Vice-chairman and launched in September2011.The book covers the 43 years journey of TCS. On the Last Trading Day of Year 2011,TCS overtook RIL to be anointed as the countrys most valued firm. On February 6, 2012,TCS signed a multi-year, multi-million euro contract with European car rental companyEuropcar for the deployment of IT services in France 50 | P a g e
  51. 51. Type Public Industry IT services, IT consulting Founded 1968 Founder(s) JRD TataHeadquarters Mumbai, Maharashtra, India Ratan Tata (Chairman) Key people N. Chandrasekaran (CEO&MD) Services IT, business consulting and outsourcing services Revenue US$ 10.17 billion (2012) Profit US$ 2.2 billion (2012) Employees 243,545 (2012) Parent Tata Group Website 51 | P a g e
  52. 52. Share Holding Pattern in (%) Dec 11 Sep 11 Jun 11 Mar 11Promoter 74.08 74.08 74.08 74.05 FII 13.41 12.81 12.80 12.64 DII 7.67 8.10 8.10 8.11 Others 4.84 5.01 5.02 5.20 Total 100.00 100.00 100.00 100.00 Income Statement (Jun 12) (Mar 12) Quarterly Yearly Net Sales 11410.65 38858.54 Other Income 169.26 2685.18 PBDIT 3621.11 14070.90 Net Profit 2797.59 10975.98 Balance Sheet (Mar 12) (In Rs Cr) Total Share Capital 295.72 Net Worth 24856.63 Total Debt 96.23 Net Block 4063.62 Investments 5688.39 Net Current Assets 13473.97 Total Assets 24952.86 52 | P a g e
  53. 53. TCS - 5 YEAR CHART 1400 1200 1000 800 600 400 200 0 Close Price 52 Week High 1295.25 52Week Low 902.00  Returns IT 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year TCS 1.001 % 0.261% 11.63% 7.636% 58.37% 105.84% TCS Comprising with Nifty & Sensex 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year TCS 1.001 % 0.261% 11.63% 7.636% 58.37% 105.84% SENSEX -5.8125 -8.1144 % 1.1702 % -11.841 % 11.5341 % 11.9513 % % NIFTY -5.666 % -8.0674 % 2.4565 % -10.960 % 11.2790 % 16.022 % INTERPRETATION In the Long run the TCS equity stock has provided wonderful returns of 105.84 %.But the graph shows the volatility with steep fall in the year 2009- 2010. Though it hasrecovered after that moved up but currently it is not so consistent. 53 | P a g e
  54. 54. WIPROWipro Limited (formerly Western India Products Limited) (NASDAQ: WIT, NYSE:WIT, BSE: 507685) is an Indian multinational provider of Information technology (IT)services, consulting and outsourcing services. It is headquartered in Bangalore, India. As of2012, the company has over 130,000 employees and a worldwide presence with globalcenters across 54 countriesThe company operates in four segments: IT products and services, Consumer care andlighting, Healthcare and Infrastructure engineeringIn February 2001, Wipro became the first software technology and services company in India [16]to be certified for ISO 14001 certification. Wipro also achieved ISO 9000 certification tobecome the first software company to get SEI CMM Level 5 in 2002. Wipro Consumer Careand Lighting Group entered the market of Compact Fluorescent Lamps, with the launch of arange of CFL, under the brand name of Wipro Smartlite. As the company grew, a studyrevealed that Wipro was the fastest wealth creator for 5 years (1997-2002). The same yearwitnessed the launch of Wipro‘s own laptops with Intels Centrino mobile processor. Wiproalso entered into an exclusive agreement with the owners of Chandrika for marketing of theirsoap in select states in India. It set up a wholly owned subsidiary company viz. Wipro [25]Consumer Care Limited to manufacture consumer care and lighting products. In 2004,Wipro joined the billion dollar club. It also partnered with Intel for i-shiksha. The year 2006saw Wipro acquire cMango Inc., a US based Technology Infrastructure Consulting firmEnabler, and a Europe based retail solutions provider.[31] In 2007, Wipro inked a large dealwith Lockheed Martin. It also entered into a definitive agreement to acquire Oki TechnoCentre Singapore Pte Ltd (OTCS) and signed an R&D partnership contract with NokiaSiemens Networks in Germany. The year 2008 saw Wipro‘s foray into the clean energybusiness with Wipro Eco Energy. In April 2011, Wipro signed an agreement with ScienceApplications International Corporation (SAIC) for the acquisition of their global oil and gasinformation technology practice of the commercial business services business unit. The year2012 saw Wipro make its 17th acquisition in IT business when it acquired Australiananalytics product firm Promax Applications Group (PAG) for $35 million 54 | P a g e
  55. 55. Type Public limited company Industry IT services, IT consulting Founder(s) M.H. Hasham PremjiHeadquarters Bangalore, India Services IT, business consulting and outsourcing services Revenue US$ 7.30 billion (2012)[1] Operating US$ 1.25 billion (2012) incomeTotal assets US$ 8.55 billion (2012)[1]Total equity US$ 5.60 billion (2012)[1] Employees 135,920 (2012) Wipro Consumer Care & Lighting Wipro Infrastructure Engineering Divisions Wipro GE Medical Systems Limited Wipro Technology Services Limited 55 | P a g e
  56. 56. Share Holding Pattern in (%) Sep 11 Jun 11 Sep 10Promoter 79.17 79.23 79.36 FII 5.08 5.37 5.28 DII 4.15 3.74 3.52 Others 11.60 11.66 11.84 Total 100.00 100.00 100.00 Income Statement (In Rs Cr) (Jun 12) (Mar 12) Quarterly Yearly Net Sales 8932.60 32053.60 Other Income -5.10 856.70 PBDIT 1838.10 7270.40 Net Profit 1158.00 4685.10 Balance Sheet (Mar 12) (In Rs Cr) Total Share Capital 491.70 Net Worth 24352.50 Total Debt 5243.20 Net Block 4649.80 Investments 10335.20 Net Current Assets 14120.60 Total Assets 29595.70 56 | P a g e
  57. 57. WIPRO - 5 YEAR CHART 800 700 600 500 400 300 200 100 0 02/Apr/07 02/Apr/08 02/Apr/09 02/Apr/10 02/Apr/11 02/Apr/12 52 Week High 453.00 52Week Low 320.50  Returns IT 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year WIPRO 3.395% 0.257% -3.63% 29.92% -8.06% -21.81% WIPRO Comprising with Nifty & Sensex 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year WIPRO 3.395% 0.257% -3.63% 29.92% -8.06% -21.81% SENSEX -5.8125 -8.1144 % 1.1702 % -11.841 % 11.5341 % 11.9513 % % NIFTY -5.666 % -8.0674 % 2.4565 % -10.960 % 11.2790 % 16.022 % INTERPRETATION As compared to the year 2007 the Wipro equity have fallen to negative side and hasnot shown any satisfactory results in terms of growth. It has fallen down to -21.8166% whichprovided the negative returns to the investors. In the year 2009-10 it has moved up to certainextent on positive side. But again have shown a downward fall. 57 | P a g e
  58. 58.  Comprising chart of returns of Infosys , Tcs & Wipro (%) INTERPRETATION In the year 2009-2010 the stocks of all three companies have fallen down to the extentof -61.26% due to global recession and then recovered to the positive side as value of USDappreciated. As compared to the other two TCS has outperformed and has touched the levelof 122.85 % of growth in the current year, as compared to year 2007. 58 | P a g e
  59. 59. IT Index 52 week High 6362.41 52 week Low 4638.80 Returns of IT Sector 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year -8.30 % -6.3510% -9.80 % -13.3351% 37.30% 42.40% Returns from sensex 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year -5.812% -8.114% 1.1702% -11.84% 11.53% 11.955% Returns from Nifty 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year -5.66676% -8.06748% 2.4565% -10.96% 11.27% 16.02% INTERPRETATIONThe Indices shown that, in the Long run the IT sector provided a return of 42% on investmentin 5 years. Which is lesser than the banking sector? Further the stock are volatile but notshown a higher growth rate than the Banking. Which means the sector provides a returns butnot as greater as the banking sector 59 | P a g e
  60. 60. QuestionnaireQue.1. Do you investing in Equity Market? [ ]Yes [ ] No INTERPRETATION As per the survey all 30 observations have invested in the equity market and bankingand IT sector.Que.2. Whichfactors motivate you for investing in Equity Market?[ ] Return [ ] Liquidity [ ] Safety[ ] Capital Appreciation [ ] Other _____________ 5% 10% 10% RETURNS LIQUIDITY Capital Appreciation 75% OTHERS INTERPRETATION From the total observation 75% do invest in the equity market because of Returnsfactor. Which means the ―Return on Investment‖ factor motivates the maximum investors.10% of the investors says that they invest for liquidity. 10% of the investors do invest inequity for capital appreciation and 5% of the investors invest in the market because of thefactors other than listed above. 60 | P a g e
  61. 61. Que.3. What is the rate of return expected by you from Equity Market in a year?[ ] 5% – 10 % [ ] 10% – 15 % [ ] 15% – 20% [ ] 20% – 25%[ ] 25% –30% [ ] 30% and above 0% 0% 10% 10% 20% 5%-10% 10%-15% 15%-20% 20%-25% 60% 25%-30% 30% & ABOVE INTERPRETATION60% of the investors expect 20% - 25% returns from the equity market on their investments.20% of the investors as per the survey expects 25% - 30% returns on their investments. 10%of the investors expects a ,lower return of 15-20% and 10% of the investors expect a higherreturn of 30% and above on their invested fund. 61 | P a g e