TREND ANALYSIS IN STOCK MARKET

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TREND ANALYSIS IN STOCK MARKET AT FY 2012-2013

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TREND ANALYSIS IN STOCK MARKET

  1. 1. OBJECTIVE PRIMARY OBJECTIVE: To study the operations of share market and to prepare trend analysis of five sector. SECONDARY OBJECTIVE: To analyze the market based on different sector. To know the gainers and losers. To find out the causes / factors for gain and loss. NEED FOR STUDY This project briefly explains the various factors affecting the share market. In this project five thriving sectors are selected and analyzed briefly. This study will help the investors in the following ways. o The investors will know about the Sector gainers and losers. o This will help them to choose between different companies. o The reasons for company’s performance are explained. o The 1 year performance of a company will give the investors an idea of what the company is capable of. o Based on this study the investors will know what all to look forward before investing.
  2. 2. Scope and significance In this project 5 major sectors out of 22 sectors are picked up and a trend analysis is prepared based on the 5 sectors. The 5 sectors namely Banking (BANKING NIFTY), IT (CNXIT), Automobile (CNXAUTO), Energy (CNXENERGY) and Pharmaceutical (CNXPHARMA). This project is based on CNX NIFTY. The CNX Nifty, also called the Nifty 50 or simply the Nifty, is a stock market index and benchmark index for Indian equity market.The CNX Nifty covers 22 sectors of the Indian economy and offers investment managers exposure to the Indian market in one portfolio. 'CNX' in its name stands for 'CRISIL NSE Index',which is a joint venture between NSE and CRISIL (Credit Rating and Information Services of India Ltd). Limitations Limitations are those which restrict the work in some way or the other. In this research some of the limiting factors are as follows. Data collection: The important constraint in this study is selection of secondary data. i.e. they refer to data which have already been collected and analyzed by someone else.The data analyzed by experts differ among different experts and with the company. So reanalyzing was a difficult challenge.
  3. 3. TIME PERIOD: Time period is one of the main factors as only 45 days was allotted and the topic to be covered is too wide. So it was hard to cover it in a short span of time. ACCURACY: The study cannot be accepted as accurate to some extent as firstly, secondary data was collected. Secondly, for a descriptive research time need to be more, it will need 6 months of time to study about the company in detail and to draw an accurate conclusion, in short period it’s hard to cover each point accurately. ANALYSIS In this project a trend analysis of 5 sectors namely Banking, IT, Automobile, Energy and Pharmaceutical is done and the various reasons of their performance is identified and verified. The problems faced by companies to fluctuate in the market are identified. The sector top gainers and losers are listed in the table below. Green table- top gainers Red table-top losers
  4. 4. BANKING SECTOR Table represents company name, their 52 weeks low share price and high share price. The percentage change in gain or loss for the past year from 01-07-2012 to 31-06-2013 is represented as change %. INDUSINDBK 308.10 531.90 26.97 Kotak Mahindra Bank 524.10 807.35 26.22 HDFC Bank 505.05 727.30 11.81 Axis Bank 927.25 1549.90 7.66 Yes Bank 285.00 547.70 6.08 ICICI Bank 866.75 1238.40 1.48 Bank Of India 178.45 393 -42.47 Canara Bank 260.60 533 -28.12 Union Bank Of India 131.20 288 -27.23 PNB 583.10 920 -25.03 Bank Of Baroda 535 899 -15.17 SBI 1751.70 2535.90 -14.74 Company name 1 year low price 1 year high price Gain/Lose %
  5. 5. This chart represents the monthly share price of companies from 01-07-2012 to 31-06-2013. X axis represents the months and Y axis represents the value of share. 0 500 1000 1500 2000 2500 3000 indusind Kotak Mahindra Hdfc Axis yes ICICI Bank Of India Canara Bank Union Bank Of India PNB Bank Of Baroda SBI
  6. 6. Banks Private Banks have performed better than nationalized banks based on their gain percentage. The reasonsis private banks performance is better than nationalized banks. The interest rates are higher when compared to nationalized banks, loan recovery is made quicker, penalty rates are high, issue of credit and debit cards attract more customers, the salary given to employees are low. These differences between the private and nationalized banks had let more private bankers to be gainers and government banks to be losers in the market. TOP GAINER FY 2012-2013 Indusind bank The top gainer of banking sector is Indusind bank offers gold loans to diversify its portfolio. Gold loan is a critical product in the Indian context and, for many borrowers, it has emerged as a great way to raise short-term capital in an expeditious manner Private sector lender IndusInd Bank has tied up with Western Union Business Solutions which will provide technology platform for effecting foreign exchange payments for small and medium enterprises (SMEs) in India. There are nearly 30 million Indian SMEs that together make a significant contribution to the country’s GDP.IndusInd Bank has launched a marquee credit card designed especially for high net worth customers.it is the first credit card in the Indian sub-continent that comes inlaid with pure 22K gold on the card plastic.
  7. 7. These factors made indusind bank to be ahead from their competitors and made them to show profits, even when many nationalized banks struggled to gain profit, indusind bank has showed a gain of 38.38%. TOP LOSER FY2012-2013 BANK OF INDIA The bank had many changes in their Director and managing director in the past year. The bank has cut down their base rates to half a percentage in their existing rates. No other particular reasons for bank of India being a loser the past year. Based on this research the reasons may be poor customer service, employees performance, loan recovery, etc.
  8. 8. IT SECTOR Company name 1 year lowprice 1 year highprice Gain/Lose % Vakrangee Software 38 85 114.83 HCL Tech. 471.45 865.25 75.04 CMC 824 1509.95 57.16 Tech Mahindra 690.20 1127.85 56.25 Mindtree Ltd 600 929.50 39.10 TCS 1055 1624.80 27.94 eClerx Services Ltd 597 910 21.53 Infosys 2060.55 3009 13.48 Oracle Finl. Service 2350 3415 10.67 Mphasis 337.20 514.05 8.14 KPIT Cummins Infosys 92 142 7.15 Core Education & Tec 25.65 350 -89.51 Educomp Solutions 32.05 182.75 -78.28 Rolta India 53.05 81.20 -24.20 Hexaware Tech. 72.30 140.90 -19.64 Info Edge 274.50 404.85 -14.72 NIIT Tech 238.60 324.90 -7.62 Polaris Finl. Tech 96 148 -6.09 Infotech Enterprise 157.15 210.90 -3.06 Financial Technology 681.30 1221.90 -1.42 Table represents company name, their 52 weeks low share price and high share price. The percentage change in gain or loss for the past year from 01-07-2012 to 31-06-2013 is represented as change %.
  9. 9. This chart represents the monthly share price of companies from 01-07-2012 to 31-06-2013. X axis represents the months and Y axis represents the value of share. 0 200 400 600 800 1000 1200 1400 1600 Vakrangee hcl cmc tech mahindra mindtree core education &tech educom rolta hexaware info edge
  10. 10. IT In IT sector the profit of the company and share price is based on the current and future projects of the company. Mostly MNC play a great role in CNXIT. Many companies get government project worth many crores where they get huge profits. Ex TCS have government project like issue of passport,Aadar enrollment etc. Other factors that affect the share price are FII (foreign institutional investor) which makes many companies to occur sudden gain or loss. TOP GAINER FY 2012-2013 Vakrangee Software VakrangeeSoftwares have acquired shares aggregating to 4.53% ofshare capital of the Company through open market during the period May 13, 2013 to June 13, 2013.Post the current acquisition, total Promoters’ share holding in the Company stands at 38.80%.Vakrangee Softwares Ranks Number One in the Aadhaar Enrollment Project. VakrangeeFinserve Limited (VFL), a Wholly Owned Subsidiary of VakrangeeSoftwares Limited has bagged Financial Inclusion Project from the Bank of Baroda. From the project, VFL targets to achieve approximately Rs. 1258 Crores (Rupees One Thousand Two Hundred & Fifty Eight Crores only) during the contract of Five years. .... Awards of vakrangeesoftwares Business Leader (SME Segment) of the Year Award, 2008 to our Chairman by Institute of Chartered Accountants of India. Economic Times ET 500 best companies in India in 2006-07. The Business World – amongst 100 Best Mid Size Companies in India in 2006-07.Amongst 250 Fastest growing Technology companies in Asia Pacific by Deloitte Touche Tohmatsu in 2004-05.
  11. 11. ENERGY SECTOR Company name 1 year lowprice 1 year highprice Gain/Lose % RELIANCE INDUSTRIES 682.35 955 22.64 ONGC 227.40 355 6.69 Reliance Power 58.55 110.20 -28.59 Indian Oil Corp. 216.50 374 -16.33 BPCL 315 449 -11.44 Tata Power 77.20 113.15 -10.44 GAIL India 276.15 397.20 -9.57 NTPC 136.15 175.50 -8.77 Cairn India 267.70 367 -6.34 Power Grid Corpn. 95.20 124.70 -2.95 Table represents company name, their 52 weeks low share price and high share price. The percentage change in gain or loss for the past year from 01-07-2012 to 31-06-2013 is represented as change %. X axis represents the months and Y axis represents the value of share.
  12. 12. This chart represents the monthly share price of companies from 01-07-2012 to 31-06-2013. X axis represents the months and Y axis represents the value of share. 0 100 200 300 400 500 600 700 800 900 1000 RELIANCE ONGC RELIANCE POWER INDIAN OIL CORP BPCL TATA POWER GAIL
  13. 13. Energy Energy sector has many government companies in play. There are many factors affecting the performance of this sector, the factors are government policies, inflation, change in foreign currency rates, FII (Foreign Institutional Investors), etc. these factors make many companies go red in the market. Government policies like giving subsidy to petrol, gas, and electricity are one among the greatest reasons for the sector performance. Many companies in energy sector has occurred a loss in the market in the FY 2012-2013. TOP GAINER FY 2012-2013 RELIANCE INDUSTRIES The Company has posted a net profit of Rs. 55020.00 million for the quarter ended December 31, 2012 whereas the same was at Rs. 44400.00 million for the quarter ended December 31, 2011. Total Income is Rs. 956260.00 million for the quarter ended December 31, 2012 whereas the same was at Rs. 868520.00 million for the quarter ended December 31, 2011. "Reliance Industries Limited (RIL) and the Venezuelan state oil company, Petroleos de Venezuela, SA (PDVSA) have signed a 15 year heavy crude oil supply contract and a Memorandum of Understanding (MOU) with PDVSA to further development of Venezuelan heavy oil fields. Reliance Industries awarded 'International Refiner of the Year' 2013".
  14. 14. AUTO SECTOR Company name 1 year lowprice 1 year highprice Gain/Lose % Eicher Motors 1901.05 3883.30 89.91 MothersonSumi Sys 103.87 224.75 84.18 Amara Raja Batteries 142.57 327.75 66.31 Mahindra & Mahindra 675.10 1026.00 24.19 Bajaj Auto 1425.10 2229 23.70 Tata Motors 203.05 337.40 21.14 Maruti Suzuki 1074.30 1777 20.32 MRF 9521.30 15499 20.31 Amtek Auto 59.85 113 -37.11 Ashok Leyland 17.70 29 -31.14 Bharat Forge 195.10 318 -26.17 Apollo Tyres 54.60 102.45 -19.67 Hero MotoCorp 1435 2135.70 -15.78 Exide Inds 115.65 166.40 -8.85 Bosch 8180.75 9620 -2.78 Table represents company name, their 52 weeks low share price and high share price. The percentage change in gain or loss for the past year from 01-07-2012 to 31-06-2013 is represented as change %.
  15. 15. This chart represents the monthly share price of companies from 01-07-2012 to 31-06-2013. X axis represents the months and Y axis represents the value of share. 0 500 1000 1500 2000 2500 3000 3500 4000 Eicher Motors Motherson Sumi Sys Amara Raja Batteries Mahindra & Mahindra Bajaj Auto Amtek Auto Ashok Leyland Bharat Forge Apollo Tyres Hero MotoCorp
  16. 16. Automobile The automotive industry in India is one of the larger markets in the world and had previously been one of the fastest growing globally, but is now seeing flat or negative growth rates India's passenger car and commercial vehicle manufacturing industry is the sixth largest in the world, with an annual production of more than 3.9 million units in 2011. India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second (after China) fastest growing automobile market in the world in that year. TOP GAINER FY 2012-2013 Eicher motors Eicher Motors Limited, incorporated in 1982, is the flagship company of the Eicher Group in India and a leading player in the Indian automobile industry. Its 50-50 joint venture with the Volvo group, VE Commercial Vehicles Limited, designs, manufactures and markets reliable, fuel-efficient commercial vehicles of high quality and modern technology, engineering components and provides engineering design solutions. Eicher Motors manufactures and markets the iconic Royal Enfield motorcycles. Eicher Motors recorded revenue of over USD 1 billion in 2010. The Group has posted a net profit after tax of Rs. 341.60 million for the quarter ended December 31, 2012 as compared to Rs. 629.20 million for the quarter ended December 31, 2011. Total Income has increased from Rs. 2281.00 million for the quarter ended December 31, 2011 to Rs. 3072.50 million for the quarter ended December 31, 2012.
  17. 17. Eicher Motors Limited, a leading player in the Indian automobile industry has signed a strategic joint venture agreement with US based Polaris Industries Inc., a recognized leader in the power sports industry, to set up a greenfield project in the automotive sector. This agreement envisages the creation of a joint venture company with a 50-50 partnership between the two companies.
  18. 18. Pharmaceutical sector Company name 1 year lowprice 1 year highprice Gain/Lose % Lupin 496.40 876.15 58.96 GlenmarkPharma 360.40 613.35 51.49 DrReddys Lab 1594.93 2358.70 42.85 Cipla 320.30 435 24.77 Glaxosmithkline Phar 1801.20 2898 23.87 Piramal Enterprises 446 627 15.29 Cadila Healthcare 715 975 1.89 Ranbaxy Labs. 301.50 578.40 -31.33% DiviS Lab 924.45 1234.40 -3.75% Table represents company name, their 52 weeks low share price and high share price. The percentage change in gain or loss for the past year from 01-07-2012 to 31-06-2013 is represented as change %.
  19. 19. This chart represents the monthly share price of companies from 01-07-2012 to 31-06-2013. X axis represents the months and Y axis represents the value of share. 0 500 1000 1500 2000 2500 Lupin Glenmark Pharma Dr Reddys Lab Cipla Ranbaxy Labs. DiviS Lab
  20. 20. Pharmaceutical In India pharmaceutical sector is said to be an ever green sector in the stock market. The reason for pharmaceutical sector to shine is the Indian population. Total population in India is said to be 1.27 billion in the year 2013, so the need for medicines increase day by day. . One billion Indians, male and female, spend the same amount on medical drugs per year as seven million Swiss men and women. "The amount spent on drugs here in India roughly corresponds to the profit made by Novartis (Novartis International AG is a Swiss multinational pharmaceutical company ranking number two in sales among the world-wide industry) in the past year. Indian pharma industry is very interested in the export of its pharmaceutics. Developing countries are an important market for Indian manufacturers because they produce high quality products at very competitive prices. India achieved average rates of economic growth for the last 20 years of six percent annually. According to the German Chemicals Association, India's top 10 pharmaceutical companies were Ranbaxy, Cipla, Dr. Reddy's Laboratories, Lupin, Nicolas Piramal, AurobindoPharma, Cadila Pharmaceuticals, Sun Pharma, Wockhardt Ltd. and Aventis. TOP GAINER FY 2012-2013 LUPIN limited Lupin Limited is a transnational pharmaceutical company based in Mumbai. It is the 2nd largest Indian pharma company by market capitalization; the 14th largest generic pharmaceutical company globally and; the 5th largest generic pharmaceutical company in the US by prescription-led market share. It has the distinction of being the fastest growing generic pharmaceutical player in the two
  21. 21. largest pharmaceutical markets of the world – the USand Japan and is the 5th largest and the fastest growing generic pharmaceutical player in South Africa. LUPIN isfully Integrated pharmaceutical company Strong Research Base in the areas of Generics, New Chemical Entity, Novel Drug Delivery Systems, New Biological Entity, research World Class GMP Compliant Manufacturing Facilities approved by international regulatory agencies Sound Technology Base and expertise to scale up technology to deliver innovative products Strong Global Footprint : USA, India, Japan, Australia, UK, Germany, CIS Large Dynamic Sales Force Robust Distribution Network The Board of Directors of the Company has approved the increase in the limit of investments by Foreign Institutional Investors (FIIs) in the equity share capital of the Company from 33% to 49%, subject to approval of the Members. Reserve Bank of India and any other approvals as may be required. TOP LOSER FY 2012-2013 Ranbaxy Ranbaxy Laboratories shares fell as much as 5 per cent on reports that the U.S. Food and Drug Administration had raised concerns about its plant in Mohali. FDA had issued form 483 (form issued by U.S. when the company violate their rules) to Ranbaxy regarding its Mohali plant.That form is issued when U.S. inspectors see conditions they believe may violate U.S. rules. Ranbaxy's Mohali plant hardly accounts for any significant production, the company is punished for not maintaining transparency.From investors' perspective, it appears as a disaster. When a company does not maintain transparency about these things, it drives away all investors in the short term and hits the credibility of the company.
  22. 22. Ranbaxy has been in news for all the wrong reasons over the past month since the drug maker pleaded guilty to felony charges related to drug safety and agreed to pay $500 million in civil and criminal fines under a settlement with the U.S. Department of Justice. Last week, European antitrust regulators fined nine drug makers, including Ranbaxy, a total of 146 million euros for blocking the supply of a cheaper anti- depressant to the market, the first EU sanction against such deals. Ranbaxy was fined 10.3 million euros (Rs. 81.06 crore). The FDA banned the company from selling about 30 drugs in the United States after it found manufacturing deficiencies at facilities in India. These reasons made Ranbaxy laboratories the top looser for the past year.
  23. 23. SOURCE OF DATA Primary Data: Primary data is collected by meeting the members of finance department and other persons related with the project. SECONDARY DATA: o Secondary data is collected with the help of internet. o The collected data are deeply studied and verified. o Data also includes books, magazines and economic news paper for up-to- date knowledge about the topic. o Data are collected on these bases. CONCLUSION In this project the operations of stock market is studied and a trend analysis of five sectors is done for the past year to find out the performance of difference companies. This project will help the investors know about the company’s annual performance and this report will help them to draw a meaningful conclusion before investing. In this report it is found that ENERGY and PHARMACEUTICAL sectors perform different when compared with the other three sectors. The reasons for the abnormal behavior are explained below the chart of each sector. Based on the report and analysis it is good for the investors to invest their money in navaratna companies. To be qualified as a Navratna, the company must obtain a score of 60 (out of 100). The score is based on six parameters which include net profit to net worth, total manpower cost to total cost of production or cost of services, PBDIT (Profit Before Depreciation, Interest and Taxes) to capital
  24. 24. employed, PBDIT to turnover, EPS (Earning Per Share) and inter-sectorial performance. The Navratna status is offered to PSEs (public sector enterprises). There are many private companies which yields high returns so before investing in private companies an investor should look at the company’s previous year performance and buy the company’s share at low price to avoid risk and loss.

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