The document analyzes a stock portfolio consisting of five companies, evaluating their risk, return, and overall performance. Specific companies discussed include Bank of Baroda, HCL Technologies, Pidilite, Reliance Defence and Engineering Limited, and SML Isuzu, each showing distinct performance metrics and market conditions. The analysis includes various financial models such as CAPM and Fama & French, ultimately recommending the portfolio due to its positive alpha of 10.30%.

1. NAME:Varsha Chauhan
ROLL NO: 49
Security Analysis & portfolio
Management

2. 2
Table of Contents
RATIONAL FOR SELECTING 5 STOCK................................................................................... 3
RISK & RETURN ANALYSIS..................................................................................................... 4
CML & SML ANALYSIS........................................................................................................... 5
CAPM ANALYSIS................................................................................................................... 6
TECHNICAL ANALYSIS ......................................................................................................... 7
CANSLIM ............................................................................................................................ 12
PORTFOLIO PERFORMANCE ANALYSIS.............................................................................. 14
Fama & French Analysis Model........................................................................................ 14
Portfolio Performance Ratio ............................................................................................. 14

3. 3
RATIONAL FOR SELECTING 5 STOCK
Portfolio as on 17 July 2016
Company Qty Price Net investment weights
BANKBARODA 3044 164.25 499977 0.20
HCLTECH 697 717 499749 0.20
PIDILITIND 696 718.55 500110.8 0.20
RDEL 7922 63.1 499878.2 0.20
SMLISUZU 436 1145.15 499285.4 0.20
Total 12795 2499000.4 1
Bank of Baroda is a Large Cap company (having a market cap of Rs 37,371.53 Cr.) operating in Banks
sector. The stock movement since November 2010 has been that of a broader range, forming higher
tops and higher bottoms. BOB country’s second largest lender by assets. Reserve Bank of India (RBI) has
asked all lenders to treat troubled accounts as non-performing even if an actual default is yet to happen
and make adequate provisions So in year 2015-16 BOB has major loss due to reporting of NPAs. It has
announced tie-ups with 7 FinTech companies. Running up to its 109th Foundation Day, this a first of its
kind initiative for a public sector bank to partner with companies operating across diverse areas of SME
financing, algorithmic lending, bill discounting, retail lending and wealth management, on a single day.
The partnerships would enable the bank to launch new products, acquire new customers, and serve the
existing customers better.
Pidilite is the market leader in adhesives and sealants, construction chemicals, hobby colors and
polymer emulsions in India. Its brand name Fevicol has become synonymous with adhesives to millions
in India and is ranked amongst the most trusted brands in India. The Company's product range includes
Adhesives and Sealants, Construction and Paint Chemicals, Automotive Chemicals, Art Materials,
Industrial Adhesives, Industrial and Textile Resins and Organic Pigments and Preparations. Pidilite was
the first company in India, which started production of violet pigment in the year 1973. Fevicol has been
ranked No. 1 in Household Care Segment in June 2008.
HCL Technologies is a leading global IT services company working with clients in the areas that impact
and redefine the core of their businesses. Today operates out of 32 countries and has consolidated
revenues of US$ 6.1 billion, as on 31st December 2015 (on Calendar Year basis). HCL focuses on
'transformational outsourcing', underlined by innovation and value creation, offering an integrated
portfolio of services including Enterprise Digitalization, Internet of Things, Engineering Services
Outsourcing and Next Generation IT Outsourcing that focuses on transformation-led infrastructure
services, applications services and business services.
Reliance Defence and Engineering Limited (RDEL) formerly Pipavav Defence and Offshore Engineering
Company Limited(PDOECL) has the largest engineering infrastructure in India and is one of the largest in
the world RDEL is the first private sector company in India to obtain the licence and contract to build
warships. RDEL bags Rs 300 cr naval warship refit order, Bid for 14 fast-patrol vessels for Indian Coast
Guard, Receives 16 new industrial licenses for equipment manufacture, Signs pact with 3 Ukranian firms
SML Isuzu has a strong presence in the commercial vehicles segment and has launched several popular
trucks and buses in the Indian market. The company has a wide network of dealerships and service
centers all over India.

4. 4
RISK & RETURN ANALYSIS
STOCK RISK & RETURN
Company Risk Return
BANKBARODA 29% -22%
HCLTECH 43% 20%
PIDILITIND 50% 36%
RDEL 39% 5%
SMLISUZU 109% 47%
Bond 0% 7.10%
NIFTY 15% 6.79%
OBSERVATIONS:
Risk is standard deviation of company stock price against Market (nifty).
In bull market PIDILITIND will give return 86.34%, while same will make u lose -14.60% in
bear market.
Similarly SMLISUZU will give return 155.99% in optimistic view, but will give -62.80% return
in bear market.
Company Optimistic View Pessimistic View
BANKBARODA 7.11185% -50.64%
HCLTECH 62.25700% -23.05%
PIDILITIND 86.34658% -14.60%
RDEL 43.76429% -34.64%
SMLISUZU 155.99409% -62.80%
PORTFOLIO RISK & RETURN
Risk & Return of Portfolio
Company Weights (w) Return(r) w*r Portfolio return Portfolio Risk
BANKBARODA 0.20 -22% -4%
17% 7.51
HCLTECH 0.20 20% 4%
PIDILITIND 0.20 36% 7%
RDEL 0.20 5% 1%
SMLISUZU 0.20 47% 9%
Observations: In bull market entire Portfolio will give return 24.51%, while in bearish
market the return will be 9.49%.

5. 5
CML & SML ANALYSIS
Interpretation:
Market return is lower than Risk free rate over last 6 Years.
Stocks with high return & high Risk: Pidilite, SML isuzu, HCL technologies.
Stocks with high risk & Low Return: Reliance Defence and Engineering Ltd.
Bank of Baroda is very risky stock as it gives negative return over Last 6 years. Profits can be
made by holding it for short term.
Underpriced:
Pidilite,
SML Isuzu,
HCL
Technology.
BANKBARODA,
29%, -22%
HCLTECH, 43%,
20%
PIDILITIND, 50%,
36%
RDEL, 39%, 5%
SMLISUZU, 109%,
47%
NIIFTY, 15%,
6.79%
Rf, 0%, 7.103%
-30.00%
-25.00%
-20.00%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
55.00%
0% 20% 40% 60% 80% 100% 120%
Return
Risk
Capital Market Line
Q2: High risk,
high return
Q3: High risk,
Low return
Q4:
Low
risk,
Low
return
Rf, 0%, 7.10%
BANK OF
BARODA, -1.04,
-22%
HCL TECH,
0.28, 20%
PIDILITIND,
1.85, 36%
RDEL, 0.60, 5%
SML ISUZU,
6.72, 43%
NIFTY, 1.00,
6.79%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
-1.50-1.00-0.50 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 5.50 6.00
RETURN
BETA
SECURITY MARKET LINE
Overprice
d
Underpriced
Overpriced:
RDEL
Bank of
baroda.
Technology.
Interpretation:

6. 6
CAPM ANALYSIS
Company Weights Expected
Return
Beta Respective
Expected Return
Respective Beta
BANKBARODA 0.20 -22% -1.04 -4.35% -0.21
HCLTECH 0.20 20% 0.28 3.92% 0.06
PIDILITIND 0.20 36% 1.85 7.18% 0.37
RDEL 0.20 5% 0.60 0.91% 0.12
SMLISUZU 0.20 47% 5.33 9.31% 1.07
16.97% 1.40
Rf 7.10%
Beta 1.40
Rm 6.79%
Required Return 6.66%
Expected Return 16.97%
Alpha 10.30%
ALPHA:
Alpha is Excess of return over market as it takes in account the difference between Expected portfolio
return & required Portfolio Return.
Conclusion: Portfolio is advisable as it has positive alpha (i.e. Alpha = 10.30%) i.e. the 10.30% is excess
return over market.

7. 7
TECHNICAL ANALYSIS
GREEN LINE: BUY CALL RED LINE: SELL CALL
SML ISUZU
DESCRIPTION:
Observations:
BUY CALL:
LINE 1: lower Bollinger band is crossed & RSI is in oversold area(crossed 30).(Jan16-feb16)
BUY SELL:
LINE 2: Higher Bollinger band is crossed & RSI is in overbought area.(May 16)
LINE 3: Higher Bollinger band is crossed & RSI is in overbought area.(July 16-Aug 16)
Head &
shoulder
SELL CALL
Double
Bottom
BUY CALL

8. 8
HCL TECHNOLOGIES
Observations:
BUY CALL:
LINE 1: lower Bollinger band is crossed & MACD signal line crossed volume stick in positive
area.
LINE 2: lower Bollinger band is crossed, MACD signal line crossed volume stick in positive
area and in RSI the line is in oversold area (crossed 30).
BUY SELL:
LINE 3: Higher Bollinger band is crossed & RSI is in overbought area.
Reverse
Head &
Shoulder
BUY
CALL

9. 9
BANK OF BARODA
Observations:
BUY CALL:
LINE 1: lower Bollinger band is crossed and in RSI the line is in oversold area (crossed).
LINE 2: lower Bollinger band is crossed, MACD signal line crossed volume stick in positive
area.
BUY SELL:
LINE 3: Higher Bollinger band is crossed & RSI is in overbought area and head & shoulder
pattern is formed.
Head &
shoulder
SELL CALL

10. 10
PIDILITE
Observations:
BUY CALL:
LINE 1: Lower Bollinger band is crossed, MACD signal line crossed volume stick in positive
area.
BUY SELL:
LINE 2: Higher Bollinger band is crossed & RSI is in overbought area

11. 11
RDEL
Observations:
BUY CALL:
LINE 1: lower Bollinger band is crossed and in RSI the line is in oversold area (crossed 30).
BUY SELL:
LINE 3: Higher Bollinger band is crossed & RSI is in overbought area.

12. 12
CANSLIM
Current Earning Growth
EPS
Company 2014 2015 2016 Average Ranking
BANKBARODA 107 16 23.89 48.96333 2
HCLTECH 85.66 45 33.62 54.76 1
PIDILITIND 9.14 9.79 13.71 10.88 4
RDEL 0.11 -5.01 -7.16 -4.02 5
SMLISUZU 12.02 25.53 35.35 24.3 3
Annual Earnings Growth
PAT
Company 2015 2016 CAGR Ranking
BANKBARODA 3398.44 -5395.54 -2.587651981 5
HCLTECH 6345.95 4733.68 -0.254062827 3
PIDILITIND 501.86 703.04 0.400868768 1
RDEL -369.03 -528.65 -0.43253936 4
SMLISUZU 36.94 51.16 0.384948565 2
New product Launched
Company New Product Ranking
BANK OF
BARODA
BOB has announced tie-ups with 7 FinTech companies & launched its
loan product for the under banked - "Baroda MUDRA Card" which can
be used as debit cards for withdrawals from cash credit / overdraft
account at ATM / POS.
4
HCLTECH
2015: HCL announced the launch of a new Digital Service Exchange
platform enabled by ServiceNow software
2016: Announced the launch of an Internet of Things (IoT) Incubation
Center in Redmond, Washington, USA, designed to leverage Microsoft
Azure IoT Suite to accelerate enterprise IoT adoption.
It also announced a significant entry into skill and talent development
space with the launch of HCL TalentCare
3
PIDILITIND
Brands: Rangeela, FineArt, Kidsart, Pidtint,Renaissance, Roff, Pagel,
Fevigum, Upscale, USPRO, Cheetah Glue, DDL Brite-O, Fevitite,
UNITINT, Prime, Ranipal, Holdtite, Steelgrip, Pulvitec, Dr. FIXIT,
Fevikwik, Hobby Ideas, Fevistick.
1
RDEL
 RDEL bags Rs 300 cr naval warship refit order
 Bid for 14 fast-patrol vessels for Indian Coast Guard
 Receives 16 new industrial licenses for equipment manufacture
 Signs pact with 3 Ukranian firms
2
SMLISUZU
In a bid to beat the slowdown and its adverse impact on the
commercial vehicle industry, CV manufacturer SML Isuzu plans to
rollout 2-4 new products annually.
5

13. 13
Supply & demand of shares
Company Volume (NSE)
No. of outstanding
Shares
(in Billion)
Value Ranking
BANKBARODA 7449794.73 2.3104655
3224369.6 3
HCLTECH 1750370.77 1.405978418
1244948.5 4
PIDILITIND 471688.57 0.51267533
920053.2 5
RDEL 3985252.27 0.736206269
5413227.8 1
SMLISUZU 58298.23 0.014471646
4028445.0 2
Leader or Lagard
Company Market Capital(in Cr) Ranking
BANKBARODA 39196.78 3
HCLTECH 113437.29 1
PIDILITIND 35377.16 2
RDEL 4362.02 4
SMLISUZU 1918.22 5
Institutional Investors
Company FII DII Ranking
BANKBARODA 11.45% 24.08% 1
HCLTECH 16.59% 5.70% 3
PIDILITIND 13.31% 17.10% 2
RDEL 5.17% 12.43% 5
SMLISUZU 4.30% 13.80% 4
Company Total Score
BANKBARODA 18
HCLTECH 15
PIDILITIND 15
RDEL 21
SMLISUZU 21

14. 14
PORTFOLIO PERFORMANCE ANALYSIS
Fama & French Analysis Model
Rf 7.10%
Rm 6.79%
Std Dev Portfolio 7.51%
Std Dev Market 15%
Rp 17%
Beta 1.40
Fama & French Model
1. Risk free rate (Rf) 7.10%
2. Compensation for Systematic Risk -0.44%
3. Compensation for Diversification 0.278%
4. Net Selectivity 10.058%
Interpretation:
 Market return is less than Risk free rate for last 5 years which shows market is bearish
& will give around 6.79%. And as risk free rate is 7.10% portfolio to be efficient it
essential market return to be more than 7.10% because any investor would have got
7.10% return without taking any risk.
 -0.44% i.e. Negative return is the return Any other portfolio will give.
 The portfolio is not well diversified.
 Fund Manager ability of this particular Portfolio is to give a return of 10.058%.
Portfolio Performance Ratio
Sharpe Ratio 1.31823
Tenure Ratio 7.051
Jensen's Alpha 10.34%
Interpretation:
Sharpe ratio is greater than one so performance of portfolio is good.
While tenure ratio is greater than one so it indicates good performance of portfolio.
Jensen’s Alpha signify that the portfolio gives the excess of return 10.34% of return over the
market.