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An Equity analysis on Indian IT sector


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an equity analysis done on the top Indian IT companies of share market listed with NSE & BSE.

Published in: Economy & Finance, Business
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An Equity analysis on Indian IT sector

  1. 1. A study on Equity Analysis of Indian IT sector (2013) Presented by:Ramawatar Tawaniya
  2. 2. Introduction         Equity analysis is researching and analyzing equities, or stocks. The methods used to analyze securities and market investment decision falls into two very broad categories: Technical Analysis Fundamental Analysis It include EIC approach analysis- Economy, Industry and Company analysis. (1) IT- Software, (2) ITeS Business Process Outsourcing (BPO) ( 3) IT- Hardware and peripherals, (4) IT- Education 7 IT companies are selected TCS, Wipro, Infosys, Satyam computer services, HCL Technologies, Tech Mahindra, L&T InfoTech.
  3. 3. Statement of problem: Study analyse the performance of the seven IT companies for the last five years and comparison is made for their performance in different years.  Study also analyse the performance of the five FMCG’S companies for the last five years and comparison is made for their performance in different years. 
  4. 4. Objectives of the study:       The primary objective of equity research is to analyze the earnings persistence. To study the growth of IT sector. To analyze which IT company gives best return to the shareholders. To find out potentiality of selected company through current ratios. To analyze fluctuation of equity market over IT companies. Comparative analysis of 7 tough IT competitors.
  5. 5. Methodology of the study Research Method:  The descriptive method is used for this study. Sample Size:  For this study seven IT companies are selected. Sources of data:  Secondary data from various websites, newspapers, magazines. Statistical Tools Used for Analysis:  EIC approach and financial ratios- debt to equity, current ratio, ROE, EPS ratio.
  6. 6. Findings:       Seven companies were performing well till 2008 with a positive trend in the earnings per share. Increasing EPS indicate good earnings. The P/E ratio of all the selected companies is increasing year after year. Infosys is found with more current ratio as compare to other companies. There was a downward trend in 2009 in most of companies because of recession. EPS of Satyam company goes in negative, the reason behind was it because of scandal in the company in the year 2009. HCL Technologies has the highest P/E ratio in 2009 which indicates that it is overvalued.
  7. 7. Conclusion:  Hence from the study it can be concluded that IT sector is booming after recession and there will be a good growth in next upcoming few years. India has become a hot destination for MNC’s to Invest. Inspite of being a tough year for all the companies across globe, Indian market has given good performance as compare to other companies in the world.
  8. 8. Suggestions: Investing in Wipro for long time could be a good option because they are spreading their business.  An investor must take research about stock of company and its previous data before investing.  Current ratio must be improved by company and it should be in ideal ratio 2:1.  The investor must focus on its key financial ratios such as earnings per share, price-earnings ratio, debt-equity ratio, dividends per share etc.  There are various factors which effects on stock market, so an investor must be aware of all those. 
  9. 9. Thank you 