This document is a summer internship project report by S. Chaitanya at Birla Sun Life Insurance Limited, submitted for the Master of Business Administration program at the University of Mysore. It includes certifications, acknowledgments, and a detailed table of contents outlining industry analysis, company analysis, research methodology, and findings. The report emphasizes the fundamental and technical analysis of the paint and power sector, highlighting significant insights into investments, profitability, and the performance of major companies in the respective sectors.

1. 1
SUMMER INTERNSHIP PROJECT REPORT
AT
Birla Sun Life Insurance Limited
A Project Report Submitted In Partial Fulfilment of the Requirements
For The Award of the
MASTER OF BUSINESS ADMINISTRATION
TO
UNIVERSITY OF MYSORE
BY
S. CHAITANYA
REG.NO. 16MB3075
BATCH 2016-18
Under the guidance of
Prof. ARUL JYOTI
M.S.RAMAIAH ACADEMY OF MANAGEMENT
NEW BEL ROAD, BANGALORE-560054

2. 2
CERTIFICATE
This is to certify that the Project Report undertaken by S. CHAITANYA (16MB3075)
conducted at BIRLA SUN LIFE INSURANCE LIMITED Submitted in partial
fulfilment of the requirements for the award of the
MASTER OF BUSINESS ADMINISTRATION
TO
UNIVERSITY OF MYSORE
Is a record of bona fide internship carried out under my supervision and guidance. He has
attended the required guidance sessions held. This report has not been submitted for the
award of any other degree/diploma/fellowship or similar titles or prizes.
Guide’s Signature:
Name: Prof. ARUL JYOTI
Qualification: MBA, M.Phil.

3. 3
STUDENT’S DECLARATION
I hereby declare that the Project Report conducted at BIRLA SUN LIFE INSURANCE
LIMITED
Under the guidance of Prof. ARUL JYOTI
Submitted in Partial fulfilment of the requirements for the
MASTER OF BUSINESS ADMINISTRATION
TO
UNIVERSITY OF MYSORE
Is my original work and the same has not been submitted for the award of any other
Degree/Diploma/Fellowship or other similar titles or prizes
Signature of the Student
Place: Bangalore
Date:

4. 4
ACKNOWLEDGEMENT
I extend my special gratitude to our Dean, Dr.H.Muralidharan, Academic Head, Prof.
V. Narayanan & Programme Head, Dr. T.N.Anuradha for inspiring me to take up
this project and also for their able guidance and support in completing this internship.
I wish to acknowledge my sincere gratitude and indebtedness to my project guide, Prof.
ARUL JYOTIof M.S.RAMAIAH ACADEMY OF MANAGEMENT Bangalore for
her valuable guidance and constructive suggestions in the preparation of project report.
S. CHAITANYA
Reg. No.: 16MB3075

5. 5
Table of Contents
S.no Particulars Page.no
1 Introduction to Insurance Industry 1
1.1 Introduction 1
1.1.1 Life Insurance 1
1.1.2 Non-life Insurance 1
1.2 Market Size 2
1.3 Investments 2
1.4 Major players in life insurance industry 3
1.5 Regulatory authority and Government Regulations 4
1.6 Government Initiatives 5
1.7 Prospects 6
1.8 Porter’s Five Forces Model 6
2 Company Analysis 8
2.1 Birla Sun Life Insurance 8
2.2 Vision 9
2.3 Mission 9
2.4 Values 9
2.5 CSR philosophy 9
2.6 Environment 10
2.6.1 PEST Analysis 10
2.7 Functioning of various Departments 10
2.7.1 Marketing 10
2.7.2 Product Profile 11
2.7.3 Distribution Network 12
2.7.4 Market share 12
2.7.5 Customer service 12
2.7.6 Financials 13
2.7.7 Operations 15
2.7.8 HR & Training 15
2.7.9 Distribution(sales) 16
2.7.10 Technology & Digital 16

6. 6
2.8 Shareholding Pattern 16
2.9 Organisation Structure 18
2.10 Awards/Recognitions 18
2.11 SWOT analysis 18
3 Tasks Accomplished During Internship 20
3.1 Roles and Responsibilities 20
3.2 Description of tasks handled 20
3.3 Contribution to the organisation 20
4 Analysis of the Research Undertaken 21
4.1 Introduction-Fundamental and technical Analysis 21
4.2 Research Design 22
4.3 Limitations of study 22
4.4 Research Methodology 22
4.5 FA & TA of Painting Sector 23
4.5.1 Introduction(Paint) 23
4.5.2 Fundamental Analysis of Paint Sector 26
4.5.3 Technical Analysis of Paint sector 36
4.6 FA & TA of power sector 38
4.6.1 Introduction(paint) 38
4.6.2 Fundamental Analysis of power sector 45
4.6.3 Technical Analysis of Power Sector 58
4.7 Findings & Conclusion 65
4.8 Recommendations 65
Bibiliography
Annexure

7. 7
List of Tables
Table.no Name of the Table Page.no
1 Market share of Life insurance industry in Percentage 3
2 Balance sheet of Birla Sun Life Insurance 13
3 Profit and Loss Account of Birla Sun Life insurance 14
4 Market Capitalisation of Large cap companies 26
5 Calculation of Overvalued or Undervalued Stock of paint sector 26
6 Calculation of Top Line of Undervalued Stock of paint sector 27
7 Calculation of Bottom Line of Undervalued Stock of paint sector 27
8 Calculation of Overvalued stock of paint sector 28
9 Allocation of funds in Paint sector 30
10 Gain in paint sector 31
11 Benchmark Vs Paint companies 32
12 Daily Price Fluctuations of Paint Companies and Nifty 50 33
13 Market Capitalisation of Large cap companies(power) 43
14 Calculation of Overvalued or Undervalued Stock of power sector 44
15 Calculation of Top Line of Undervalued Stock of power sector 45
16 Calculation of Bottom Line of Undervalued Stock(power) 45
17 Calculation of Value stock 46
18 Calculation of Overvalued stock 46
19 P/S Ratio 47
20 P/BV Ratio 48
21 P/E Ratio 49
22 Allocation of funds in power sector 49
23 Gain in Power sector 50
24 Daily Price Fluctuations of Power Companies and Nifty Energy 53

8. 8
List of Figures
Figure.no Name of the figure Page.no
1 Major players in life insurance industry 4
2 Organisation Structure 8
3 Distribution Network 12
4 Customer care flow process 12
5 Total premium collected during 2014-15 15
6 Shareholding Pattern 16
7 Organisation Structure 17
8 Weightage of funds in Paint sector Companies 30
9 Gain or Loss in Percentage of paint sector 31
10 Resistance and Support of paint sector 34
11 Indicators of paint sector 35
12 Structure of Power Sector 37
13 Weightage of Power companies 50
14 Gain in Rupees 51
15 Gain in Percentage 51
16 Power companies VS Benchmark 52
17 Resistance and Support of CESC Ltd 54
18 Indicators of CESC Ltd 54
19 Resistance and Support of JSW Energy 55
20 Indicators of JSW Energy 55
21 Resistance and Support of Suzlon Energy 56
22 Indicators of Suzlon Energy 56
23 Resistance and Support of NTPC 57
24 Indicators of NTPC 57
25 Resistance and Support of TATA Power 58
26 Indicators of TATA Power 58
27 MSRIM Fund Return 61

9. 9
Executive Summary
A study focuses on fundamental and technical analysis of Paint and Power sector
companies at Birla Sun Life Insurance Ltd.
This study was conducted to know the profitability and performance of large cap
companies in Paint and Power sector companies and to study how the fundamental and
technical analysis plays an important role in reducing the risk in investment in Paint and
Power sector companies.
The research is based on secondary data like Financial statements, Companies website etc.
Fundamental Analysis and Technical Analysis
In order to find out of best performance stocks, various valuation ratios like price to
sales ratio, price to book value ratio, price to earnings ratio and companies charts for
technical analysis were calculated.
The result of this research is that the overall performance and profitability of the Paint and
power sector companies is good. Average return of the paint and power sector companies is
10%.

10. 10
CHAPTER - I
INDUSTRY ANALYSIS

11. 1
1. Introduction to Insurance Industry
1.1 Introduction
The insurance industry of India consists of 53 insurance companies of which 24 are in
life insurance business and 29 are non-life insurers. Among the life insurers, Life Insurance
Corporation (LIC) is the sole public sector company. Apart from that, among the non-life
insurers, there are six public sector insurers. In addition to these, there is sole national re-
insurer, namely, General Insurance Corporation of India (GIC).
1.1.1 Life Insurance
A life insurance policy is a contract with an insurance company. In exchange for
premium payments, the insurance company provides a lump-sum payment, known as a death
benefit, to beneficiaries upon the insured's death.
Typically, life insurance is chosen based on the needs and goals of the owner. Term life
insurance generally provides protection for a set period of time, while permanent insurance,
such as whole and universal life, provides lifetime coverage. It's important to note that death
benefits from all types of life insurance are generally income tax-free.
1.1.2 Non-life Insurance
Insurance contracts that do not come under the ambit of life insurance are called general
insurance. The different forms of general insurance are fire, marine, motor, accident and other
miscellaneous non-life insurance.
The tangible assets are susceptible to damages and a need to protect the economic value
of the assets is needed. For this purpose, general insurance products are bought as they provide
protection against unforeseeable contingencies like damage and loss of the asset. Like life
insurance, general insurance products come at a price in the form of premium.
Out of 29 non-life insurance companies, five private sector insurers are registered to
underwrite policies exclusively in health, personal accident and travel insurance segments.
They are Star Health and Allied Insurance Company Ltd, Apollo Munich Health Insurance
Company Ltd, Max Bupa Health Insurance Company Ltd, Religare Health Insurance Company
Ltd and Cigna TTK Health Insurance Company Ltd. There are two more specialised insurers
belonging to the public sector, namely, Export Credit Guarantee Corporation of India for Credit
Insurance and Agriculture Insurance Company Ltd for crop insurance. Other stakeholders in
Indian Insurance market include agents (individual and corporate), brokers, surveyors and third
party administrators servicing health insurance claims.

12. 2
1.2 Market Size
During April 2015 to February 2016 period, the life insurance industry recorded a new
premium income of Rs 1.072 trillion (US$ 15.75 billion), indicating a growth rate of 18.3
percent. The general insurance industry recorded a 14.1 per cent growth in Gross Direct
Premium underwritten in FY2016 up to the month of February 2016 at Rs 864.2 billion (US$
12.7 billion).
India's life insurance sector is the biggest in the world with about 360 million policies
which are expected to increase at a Compound Annual Growth Rate (CAGR) of 12-15 percent
over the next five years. The insurance industry plans to hike penetration levels to five per cent
by 2020.
The country’s insurance market is expected to quadruple in size over the next 10 years
from its current size of US$ 60 billion. During this period, the life insurance market is slated
to cross US$ 160 billion.
The general insurance business in India is currently at Rs 78,000 crore (US$ 11.44
billion) premium per annum industry and is growing at a healthy rate of 17 percent.
The Indian insurance market is a huge business opportunity waiting to be harnessed.
India currently accounts for less than 1.5 percent of the world’s total insurance premiums and
about 2 percent of the world’s life insurance premiums despite being the second most populous
nation. The country is the fifteenth largest insurance market in the world in terms of premium
volume and has the potential to grow exponentially in the coming years.
1.3 Investments
The following are some of the major investments and developments in the Indian insurance
sector.
 The Insurance sector in India is expected to attract over Rs 12,000 crore (US$ 1.76
billion) in 2016 as many foreign companies are expected to raise their stake in private
sector insurance joint ventures.
 QUEST Global, a pure-play engineering and Research and Development (R&D)
services provider, has raised investment of around Rs 2,396 crore (US$ 351.54 million)
from leading global investors Bain Capital, GIC and Advent International for a minority
stake in the company.
 Foreign Direct Investment in the insurance sector stood at US$ 341 million in March-
September, 2015, showing a growth of 152 percent compared to the same period last
year.
 Insurance firm AIA Group Ltd has decided to increase its stake in Tata AIA Life
Insurance Co Ltd, a joint venture owned by Tata Sons Ltd and AIA Group from 26 per
cent to 49 per cent.
 Canada-based Sun Life Financial Inc plans to increase its stake from 26 per cent to 49
per cent in Birla Sun Life Insurance Co Ltd, a joint venture with Aditya Birla Nuvo
Ltd, through buying of shares worth Rs 1,664 crore (US$ 244.14 million).
 Nippon Life Insurance, Japan’s second largest life insurance company, has signed
definitive agreements to invest Rs 2,265 crore (US$ 332.32 million) in order to increase
its stake in Reliance Life Insurance from 26 per cent to 49 per cent.
 The Central Government is planning to launch an all-in-one insurance scheme for
farmers called the Unified Package Insurance Scheme (Bhartiya Krishi Bima Yojana).
The proposed scheme will have various features like crop insurance, health cover,
personal accident insurance, livestock insurance, insurance cover for agriculture
implements like tractors and pump sets, student safety insurance and life insurance.

13. 3
 The government launched a special enrolment drive, Suraksha Bandhan Drive
comprising of the sale of gift cheques and launch of deposit schemes in bank branches,
to facilitate enrollment under Pradhan Mantri Suraksha Bima Yojana (PMSBY) and
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).
 To increase the subscriber base and ensure wider reach, the Central Government has
eased several norms for its flagship insurance scheme Atal Pension Yojana (APY),in
terms of more options for periodical contributions, voluntary and premature exits and
the simplified penalty for payment delays.
 Bennett Coleman and Co. Ltd (BCCL), the media conglomerate with multiple
publications in several languages across India, is set to buy Religare Enterprises Ltd’s
entire 44 per cent stake in life insurance joint venture Aegon Religare Life Insurance
Co. Ltd. The foreign partner Aegon is set to increase its stake in the joint venture from
26 per cent to 49 per cent, following government’s reform measure allowing the
increase in stakeholding by foreign companies in the insurance sector.
 GIC Re and 11 other non-life insurers have jointly formed the India Nuclear Insurance
Pool with a capacity of Rs 1,500 crore (US$ 220.08 million) and will provide the risk
transfer mechanism to the operators and suppliers under the CLND Act.
 State Bank of India has announced that BNP Paribas Cardif is keen to increase its stake
in SBI Life Insurance from 26 per cent to 36 per cent. Once the foreign joint venture
partner increases its stake to 36 per cent, SBI’s stake in SBI Life will get diluted to 64
percent.
1.4 Major players in life insurance industry
 In 2015, the life insurance sector has 29 private players compared to only four in FY02.
 LIC is still the market leader, with 69 per cent share in FY15, followed by ICICI
Prudential, with 6.0 per cent share.
 LIC issued 20.1 million new policies in FY15.
1.4.1 Market share of Life insurance industry
Table-1 Market share of Life insurance industry in Percentage
Companies Market Share(in percentage)
LIC 69%
ICICI 6%
HDFC 5%
SBI 5%
Bajaj Allianz 2%
Max Life 2%
Birla Sun life 2%
Reliance life 1%
Others 8%

14. 4
1.4.2 Major players in life insurance industry
Figure-1 Major players in life insurance industry
1.5 Regulatory authority and Government Regulations
The Insurance Regulatory and Development Authority (IRDA) was established under
the IRDA Act in the year 1999. It is responsible for regulating, promoting and ensuring the
growth of the insurance and reinsurance business in India. According to latest developments,
IRDA has allowed those life insurance companies which have completed 10 years of operations
to raise capital through IPOs (initial public offerings). Insurance products are also covered
under the exempt, exempt, exempt (EEE) method of taxation. It translates to an effective tax
benefit of approximately 30 % on select investments. The Government of India has extended
Rashtriya Swasthya Bima Yojana (RSBY) to cover unorganised sector workers in hazardous
mining and associated industries.
The economic reforms bill in the Insurance sector is passed. It will allow FDI up to
49% in the Indian insurance companies. This amendment also allows foreign investors to invest
in pension funds, which was not allowed earlier.
69%6%
5%
5%
2%
2%
2%
1%
8%
Major players in life insuranceindustry
LIC
ICICI
HDFC
SBI
Bajaj Allianz
Max Life
Birla Sun life
Reliance life
Others

15. 5
1.6 Government Initiatives
The Government of India has taken a number of initiatives to boost the insurance industry.
Some of them are as follows:
 The Union Budget of 2016-17 has made the following provisions for the Insurance
Sector:
 Foreign investment will be allowed through automatic route for up to 49 per cent
subject to the guidelines on Indian management and control, to be verified by the
regulators.
 Service tax on single premium annuity policies has been reduced from 3.5 per cent
to 1.4 per cent of the premium paid in certain cases.
 Government insurance companies to be listed on the exchanges
 Service tax on service of life insurance business provided by way of annuity under
the National Pension System regulated by Pension Fund Regulatory and
Development Authority (PFRDA) being exempted, with effect from 1 April 2016.
 The Insurance Regulatory and Development Authority (IRDA) of India has formed
two committees to explore and suggest ways to promote e-commerce in the sector
in order to increase insurance penetration and bring financial inclusion.
 IRDA has formulated a draft regulation, IRDAI (Obligations of Insures to Rural
and Social Sectors) Regulations, 2015, in pursuance of the amendments brought
about under section 32 B of the Insurance Laws (Amendment) Act, 2015. These
regulations impose obligations on insurers towards providing insurance cover to the
rural and economically weaker sections of the population.
 The Government of India has launched two insurance schemes as announced in
Union Budget 2015-16. The first is Pradhan Mantri Suraksha Bima Yojana
(PMSBY), which is a Personal Accident Insurance Scheme. The second is Pradhan
Mantri Jeevan Jyoti Bima Yojana (PMJJBY), which is the government’s Life
Insurance Scheme. Both the schemes offer basic insurance at minimal rates and can
be easily availed of through various government agencies and private sector outlets.
 The Uttar Pradesh government has launched a first of its kind banking and insurance
services helpline for farmers where individuals can lodge their complaints on a toll
free number.
 The select committee of the Rajya Sabha gave its approval to increase stake of
foreign investors to 49 per cent equity investment in insurance companies.
 Government of India has launched an insurance pool to the tune of Rs 1,500 crore
(US$ 220.08 million) which is mandatory under the Civil Liability for Nuclear
Damage Act (CLND) in a bid to offset financial burden of foreign nuclear suppliers.

16. 6
1.7 Prospects
Per capita income and rural income are increasing, that leads to increased spending on
medical and healthcare services. India's insurable population is anticipated to touch 750 million
in 2020, with life expectancy reaching 74 years. Furthermore, life insurance is projected to
comprise 35 per cent of total savings by the end of this decade, as against 26 per cent in 2009-
10.
The future looks promising for the life insurance industry with several changes in regulatory
framework which will lead to further change in the way the industry conducts its business and
engages with its customers.
Demographic factors such as growing middle class, young insurable population and
growing awareness of the need for protection and retirement planning will support the growth
of Indian life insurance industry.
1.8 Porter’s Five Forces Model
Competitive Rivalry (High)
 Insurance industry is becoming highly competitive with 52 players operating in the
industry.
 Companies are competing on price and also using low price and high returns strategy
for customers to lure them.
Intensity of
Rivalry(High)
Threat of new
entrants(Moderate)
Bargaining power
of suppliers(Low)
Bargaining power of
buyers(Moderate-Low)
Threat of
substitutes
(Moderate)

17. 7
Threat of New Entrants (Moderate)
 Other financial companies can enter the industry.
 Overall threat is medium given that entry is subject to license and regulations.
Threat of Substitute Products (Moderate)
 Similarity in services makes switchover a potential threat.
 Investment oriented customers will switch to other avenues.
Bargaining Power of Suppliers (Low)
Supplier being the distributor or agent have high bargaining power because they have
customer database and can influence customers in making choices. Insurance agencies cannot
reduce the premiums below a minimum support level. Thereby, the bargaining power of
suppliers is Low.
Bargaining Power of Customers (Moderate-High)
There are 2 types of buyers/consumers- individual and corporate. Bargaining power of
customers especially corporate is very high because they pay huge amount of premium.

18. 8

19. CHAPTER - II
COMPANY ANALYSIS

20. 8
2. COMPANY ANALYSIS
2.1 BIRLA SUN LIFE INSURANCE
Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between the
Aditya Birla Group, a well-known Indian conglomerate and Sun Life Financial Inc., one of the
leading international financial services organizations from Canada. With an experience of over
a decade, BSLI has contributed to the growth and development of the Indian life insurance
industry and currently is one of the leading life insurance companies in the country. BSLI has
contributed significantly to the growth and development of the life insurance industry in India
and currently ranks amongst the top 7 private life insurance companies in the country.
BSLI is known for its innovation and creating industry benchmarks, BSLI has several
firsts to its credit. It was the first Indian Insurance Company to introduce "Free Look Period"
and the same was made mandatory by IRDA for all other life insurance companies.
Additionally, BSLI pioneered the launch of Unit Linked Life Insurance plans amongst the
private players in India. To establish credibility and further transparency, BSLI also enjoys the
prestige to be the originator of practice to disclose portfolio on a monthly basis. These category
development initiatives have helped BSLI be closer to its policy holder’s expectations, which
gets further accentuated by the complete bouquet of insurance products (viz. pure term plan,
life stage products, health plan and retirement plan) that the company offers.
The Company offers a complete range of offerings comprising protection solutions,
children's future solutions, wealth with protection solutions, health and wellness solutions,
retirement solutions and savings with protection solutions. It has an extensive distribution reach
in over 500 cities through its network of over 560 branches, around 85,000 empanelled advisors
and over 140 partnerships with corporate agents, brokers and banks.
Figure-2 Organisation Structure

21. 9
2.2 Vision
To be a leader and role model in a broad based and integrated financial services
business.
2.3 Mission
To be the first preference of our customers by providing innovative, need based life
insurance and retirement solutions to individuals as well as corporate. These solutions will be
made available well-trained professionals through a multi-channel distribution network and
superior technology.
It will provide constant value addition to customers throughout their relationship with
us, within the regulatory framework.
2.4 Values
 Integrity
 Commitment
 Passion
 Seamlessness
 Speed
2.5 CSR philosophy
For us in the Aditya Birla Group, reaching out to underserved communities is part of
our DNA. We believe in the trusteeship concept. This entails transcending business interests
and grappling with the "quality of life" challenges that underserved communities face, and
working towards making a meaningful difference to them.
Our vision is - "To actively contribute to the social and economic development of
the communities in which we operate. In so doing build a better, sustainable way of life
for the weaker and marginalized sections of society and raise the country's human
development index" - Mrs. Rajashree Birla, Chairperson, Aditya Birla Centre for
Community Initiatives and Rural Development.
All projects are identified in consultation with the community in a participatory manner,
literally sitting with them and gauging their basic needs. We recourse to the participatory rural
appraisal mapping process. Subsequently, based on a consensus and in discussion with the
village panchayats, and other stakeholders, projects are prioritized.
Arising from this our focus areas that have emerged are Education, Healthcare, Sustainable
livelihood, Infrastructure development, and espousing social causes. All of our community
projects/programmes are carried out under the aegis of The Aditya Birla Centre for Community
Initiatives and Rural Development. Our activities are in line with Schedule VII of the
companies Act, 2013.

22. 10
2.6 ENVIRONMENT
The demand for insurance products is likely to increase due to the exponential growth of
household savings, purchasing power, the middle class and the country’s working population.
Listed below, are the various underlying growth drivers for India’s insurance industry:
 Growing of the financial industry as a whole
 Growth of life and non-life industry
 Promoting innovation and removing inefficiency
 Competition and orderly growth
Hence company’s growth and an increase in demand for its products will depend on above
mentioned factors.
2.6.1 PEST Analysis
Political factors effecting Birla sun life insurance
 Tax benefits
 FDI policy
 Change in Government
Economical factors effecting Birla sun life insurance
 Interest rates
 Inflation rate
Socio-cultural factors effecting Birla sun life insurance
 Level of Earnings
 Education
 Population
 Lifestyle
Technological factors effecting Birla sun life insurance
 Maintaining of Database
 E-Services (online payment, Reminders, policy statement)
2.7 FUNCTIONING OF VARIOUS DEPARTMENTS
2.7.1 Marketing
To formulate the various goals and objectives related to marketing activities involving the
sub-departments
 Promotion (advertisements).
 Inner promotion (for the employees).
 Formulating the various schemes for employees.
 Designing the various campaigns to promote sales.

23. 11
2.7.2 PRODUCTS PROFILE
2.7.2.1 Protection
-BSLI protector plus plan
-BSLI future guard plan
-BSLI easy protect plan
-BSLI protect @ease
2.7.2.2 Retirement
-BSLI empower pension plan
-BSLI immediate annuity plan
-BSLI empower pension SP plan
-BSLI retirement plan
2.7.2.3 Saving with protection
-BSLI vision money back plan
-BSLI vision life income plan
-BSLI vision endowment plan
-BSLI savings plan
-BSLI vision lifesaving plans
-BSLI income assured plan
-BSLI vision endowment plan plus
-BSLI guaranteed future plan
2.7.2.4 Child
-BSLI vision star plus
-BSLI Wealth and fortune plan
-BSLI wealth max plus
-BSLI wealth secure plus
-BSLI wealth assure plus
-BSLI fortune elite plan
-BSLI wealth aspire plan
2.7.2.5 Benefits of these plans
 Financial protection against uncertainty.
 Lump sum pay-out at maturity.
 Guaranteed additions to safeguard as per your need.
 Flexible to choose options as per your need.

24. 12
2.7.3 Distribution network
Figure-3 Distribution Network
.
2.7.4 Market share Competition
Companies Market Share(in percentage)
LIC 69%
ICICI 6%
HDFC 5%
SBI 5%
Bajaj Allianz 2%
Max Life 2%
Birla Sun life 2%
Reliance life 1%
Others 8%
Birla sun life is in 7th Position with 2% market share among all the Competitors.
2.7.5 Customer service
So simple to contact customer care through IVR (Interactive Voice Response)
Step by step procedure
Figure-4 Customer care flow process
2.7.6 Competitors
 Aviva life insurance
 Bajaj Allianz life insurance
 HDFC Standard Life Insurance Co. Ltd
 INGVysya Life Insurance Company Limited
 Kotak Mahindra Old Mutual Life Insurance Ltd
 Life Insurance Corporation of India
 ICICIPrudential Life Insurance
 Max New York Life Insurance Company Limited
 MetLife India Insurance Co. Pvt. Ltd.
 Reliance Life Insurance Company Limited
 SBI Life Insurance
 Tata AIG Life Insurance Company
2.8 Finance

25. 13
2.7.6 Financials
To formulate the various insurance policies and measure their viability and ultimate success in
the market. This also involves the handling of various policyholders through keeping a regular
track of their financial activities.
Table-2 Balance sheet of Birla Sun Life insurance as on March 31, 2015

26. 14
Table-3 Profit and Loss Account of Birla Sun Life insurance for the period ending March
31, 2015.

27. 15
Figure-5 Total premium collected during 2014-15
2.7.7 Operations
Birla Sun Life Insurance Company Limited (BSLI) has extensive reach through its
network of 600 branches and 133,572 empanelled advisors. This impressive combination of
domain expertise, product range, reach and ears on the ground, helped BSLI cover more than
2.5 million lives since it commenced operations and establish a customer base spread across
more than 1500 towns and cities in India.
2.7.8 HR & Training
To manage the Human resource of the company in an efficient and effective manner.
This involves
 Recruitment.
 Training.
 Development and
 Motivating.
2.7.8.1 BOARD OF DIRECTORS
 Mr. Kumar M Birla
 Mr. Donald A Stewart,
 Mr. Bishwanath N Puranmalka
 Mr. Ajay Srinivasan
 Mr. Gary M Comerford
 Mr. Suresh N Talwar
 Mr. Gian P Gupta
 His Highness Maharaja G Singh
 Mr. Stephan Rajotte
 Dr. Bharat K Singh
2.7.8.2 Management Team
 Mr. Pankaj Razdan, MD & Chief Executive Officer.
 Mr. Amit Jain, Chief Financial Officer (CFO).
 Mr. Rajesh Nambiar, Chief Marketing Officer (CMO).
 Mr. Sashi Krishnan, Chief Investment Officer.

28. 16
 Ms. Shobha Ratna, Head – Human Resource & Training.
 Mr. Lalit Vermani, Chief Legal, Compliance & Risk Officer.
 Mr. Vikas Seth, Chief Distribution Officer (CDO).
 Mr. Anil Singh, Chief Actuarial Officer.
 Mr. Rajesh Varrier, Chief Technology and Digital.
2.7.9 Distribution (Sales)
To train and motivate the sales force of the company to ultimately sell a targeted number
of insurance policies. This involves setting the targets for the sales force and motivating and
driving them towards achieving it.
2.7.10 Technology & Digital
To facilitate the company’s working by implementing latest technological
advancements into the various departments.
Benefits
 Online Login
 Pay Premium
 Change Premium Payment Frequency
 Update your Contact Details
 Subscribe to e-statement
2.8 Shareholding Pattern
Birla-Sun Life, is the joint venture between Aditya Birla Group and Sun Life Financial Inc.,
The shareholding pattern of these two companies as follows:
Figure-6 Shareholding Pattern
Birla-Sun Life
Aditya Birla
Group(51%)
Sun Life
Financial
Inc.(49%)

29. 17
2.8.1 Aditya Birla Financial Services Group (ABFSG)
Aditya Birla Financial Services Group (ABFSG) ranks among the top 5 fund managers
in India (excluding LIC) with an AUM of USD 20.4 billion. Having a strong presence across
the life insurance, asset management, NBFC, private equity, retail broking, distribution &
wealth management, and general insurance broking businesses, ABFSG is committed to serve
the end-to-end financial services needs of its retail and corporate customers. The seven
companies representing ABFSG are Birla Sun Life Insurance Company Ltd., Birla Sun Life
Asset Management Company Ltd., Aditya Birla Finance Ltd., Aditya Birla Capital Advisors
Pvt. Ltd., Aditya Birla Money Ltd., Aditya Birla Money Mart Ltd. and Aditya Birla Insurance
Brokers Ltd. In FY 2013-14, ABFSG reported consolidated revenue from these businesses at
Rs. 6,640 Crore (USD 1.1 billion) and earnings before tax at Rs. 745 Crore. Anchored by about
13,000 employees and trusted by over 5.3 million customers, ABFSG has a nationwide reach
through 1,500 points of presence and about 130,000 agents / channel partners.
2.8.2 Aditya Birla Nuvo
Aditya Birla Nuvo is a ~USD 4 billion conglomerate operating in the services and the
manufacturing sectors, where it commands a leadership position. Its service sector businesses
include Financial Services (Life Insurance, Asset Management, NBFC, Private Equity,
Broking, Wealth Management and general insurance advisory), Fashion & Lifestyle (Branded
apparels & Textiles) and Telecom. Its manufacturing businesses comprise of the Agri, Rayon
and Insulators businesses.
Aditya Birla Nuvo is part of the Aditya Birla Group, a USD 40 billion Indian
multinational. The Group operates in 36 countries across the globe, is anchored by an
extraordinary force of about 120,000 employees belonging to 42 nationalities and derives more
than 50% of its revenue from its overseas operations.
2.8.3 Sun Life Financial
Celebrating 150 years in 2015, Sun Life Financial is a leading international financial
services organization providing a diverse range of protection and wealth products and services
to individuals and corporate customers. Sun Life Financial and its partners have operations in
a number of markets worldwide, including Canada, the United States, the United Kingdom,
Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore,
Vietnam, Malaysia and Bermuda. As of September 30, 2015, the Sun Life Financial group of
companies had total assets under management of $846 billion.
Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine
(PSE) stock exchanges under the ticker symbol SLF.

30. 18
2.9 Organization Structure
Figure-7 Organization Structure
2.10 AWARDS/RECOGNITIONS
 Golden Peacock Award for Business Excellence in 2014.
 BSLI has been adjudged 1st Runner-up in QualTech Innovation Prize 2014 in services
category for Process Monitoring Practices.
 BSLI has been adjudged a top 5 employer in the BFSI sector in the annual ‘Best
Companies to Work for-BT-PeopleStrong Survey’.
 Celent Model Insurer Asia 2014 Award in the area of IT Management and Business
Process Management.
 Won Grand Midas for BSLI and 4 Gold Midas for BSLI.
 Won a Gold and Bronze for BSLI at the Exchange4media OOH Awards, 2013.
 Winner under the Crisis management category for BSLI at the Exchange4media PR
Awards, 2013.
 Won 2 Gold Creative Abbys for BSLI and 1 Silver Metal for BSLI at the Goafest
Creative & Media Abby Awards, 2013 Outdoor Advertising Awards, 2013.
 Won a Bronze Metal for BSLI at Effies, 2013.
 Won 2 Bronze and 1 Silver Metal for BSLI at the DMAi Award, 2013 Emvies, 2014.
 Won 1 Bronze Metals for BSLI at the Goafest Creative & Media Abby Awards.
 Won a Silver Metal for BSLI at the Big Bang Awards, 2014.
 Won a Blue Elephant and Black Elephant for BSLI at the Kyoorius Advertising
Awards, 2014.
 Won a Silver Metal for BSLI at the Effies, 2014.

31. 19
2.11 SWOT Analysis
2.11.1 Strength
 Good brand name.
 Huge Capital Base.
 Best supportive customer care services.
 Implementation Six-Sigma process.
 1 Million Policies sold in 3 years.
 The company has a most extreme number of MDRT and in addition great number of
HNI guides.
 Training procedure of the organization is exceptionally solid.
2.11.2 Weakness
 Pay package is very less when compared to commission of the counselors.
 Low presence in the rural market.
 Lesser advertising as compared to competitors.
2.11.3 Opportunity
 Tying up with other global companies to expand their business globally.
 Customizing the policy as per the equivalent of customers.
 Growing potential in the rural market.
 Alignment with government schemes.
2.11.4 Threats
 Frequent Changes in the IRDA regulations.
 Uncertainty towards financial crisis and Interest rates
 The organization is confronting significant threats from LIC which is an exclusive
government organization.
 Entry of new NBFCs in the sector.

32. 20

33. CHAPTER - III
TASKS ACCOMPLISHED DURING
INTERNSHIP

34. 20
3. TASKS ACCOMPLISHED DURING INTERNSHIP
During the tenure of my internship at Birla Sun Life Insurance, located in Bangalore, I
was placed as stock market analyst. I used to report to the senior business mentor Mr. Tanmay.
I was trained on the Equity Research and Portfolio Management for few weeks.
3.1 Roles and responsibilities
 Updating the changes in stock market on a day to day basis.
 Collection of stock market and other data by using the real time web pages.
 Assisted Manager in analysing the data and report writing.
 Giving information to the colleagues regarding the market value of shares of various
companies listed in NSE & BSE.
 Meeting the clients to explain about the various products (insurance) available in the
company.
 Trading in stock market through the trading terminal available in office.
 Communicating the weekly Performance of stocks invested in paint and power sector.
 To promote companies products among Friends and relatives.
3.2 Description of tasks handled
 Analysed the stock market performance of different companies.
 Data collection based on daily changes using stock exchange websites.
 Updated the manager with the database collected by me.
 Explained the details of paint and power sector companies as required by the manager.
 Marketed the products to prospective customers.
3.3 Contribution to the organisation
 Provided to the organisation data about which stocks are performing better in the
current context.
 Helped the manager with the data about which schemes customers will be interested to
invest in and also helped the organisation in getting customers.
 Presented to Associate partner Mr. Tanmay Analysis on Return on stocks in Paint and
power sectors.

35. 20
CHAPTER - IV
ANALYSIS OF THE RESEARCH
UNDERTAKEN

36. 21
4. ANALYSIS OF THE RESEARCH UNDERTAKEN
4.1 Introduction - Fundamental Analysis and Technical Analysis
Fundamental Analysis (FA) is a holistic approach to study a business. When an investor
wishes to invest in a business for a long term (say 3 – 5 years) it becomes extremely essential to
understand the business from various perspectives. It is critical for an investor to separate the daily
short term noise in the stock prices and concentrate on the underlying business performance. Over
a long term, the stock prices of a fundamentally strong company tend to appreciate, thereby
creating wealth for its investors.
 Using Fundamental Analysis one can separate out an investment grade company from a
junk company. Investment in a company with good fundamentals creates wealth.
 All investment grade companies exhibit few common traits. Likewise all junk companies
exhibit common traits
 Fundamental analysis helps the analysts identify these traits
Technical Analysis (also abbreviated as TA) is a popular technique that allows you to do just that.
It not only helps you develop a point of view on a particular stock or index but also helps you
define the trade keeping in mind the entry, exit and risk perspective. Like all research techniques,
Technical Analysis also comes with its own attributes, some of which can be highly complex.
However technology makes it easy to understand.
 Technical Analysis is a popular method to develop a point of view on markets. Besides,
technical Analysis also helps in identifying entry and exit points
 Technical Analysis visualizes the actions of market participants in the form of stock charts
 Patterns are formed within the charts and these patterns help a trader identify trading
opportunities
 Technical Analysis works best when we keep a few core assumptions in perspective
 Technical Analysis is used best to identify short terms trades

37. 22
4.2 Research Design:
4.2.1 Statement of the Problem
This study focuses on the analysis of Performance, Profitability of Paint and Power sector
companies in capital market there by reducing the risk in investment in these sectors.
4.2.2 Objective of the study
 To compare profitability and performance of each company in paint and power sector.
 To analyse the Risk and return of paint and power sector companies.
 To see the effect on market value of the companies.
4.2.3 Scope of the study
Large Cap companies from paint and power sectors are considered for research.
Period : 3rd July, 2017 – 15th August, 2017
4.3 Limitations of study
 This study does not focus on all other sectors.
 This study does not focus on all the stocks listed in stock exchanges.
 This study does not focus on NSE & BSE Indices.
4.4 Methodology
Data Collection:
The study is based on secondary data collected from the financial statements, websites etc. of the
company.
Statistical tools used for Analysis:
Ratios and Charts

38. 23
4.5 Analysis of Data- Fundamental and Technical Analysis
4.5.1 Introduction (painting sector)
The paint industry can easily grow at 12-13% annually over the next few years from its
current size of Rs 350 bn. The per capita paint consumption in India which is a little over 4 kgs is
still very low as compared to the developed western nations. Therefore, as the country develops
and modernizes, the per capita paint consumption is bound to increase. The unorganised sector
controls around 35% of the paint market, with the organised sector accounting for the balance. In
the unorganised segment, there are about 2,000 units having small and medium sized paint
manufacturing plants. Top organised players include Asian Paints, Kansai Nerolac, Berger Paints
and ICI.
Demand for paints comes from two broad categories:
Decoratives:Major segments in decoratives include exterior wall paints, interior wall paints,
wood finishes and enamel and ancillary products such as primers, putties etc. Decorative paints
account for over 70% of the overall paint market in India. Asian Paints is the market leader in this
segment. Demand for decorative paints arises from household painting, architectural and other
display purposes. Demand in the festive season (September-December) is significant, as compared
to other periods. This segment is price sensitive and is a higher margin business as compared to
industrial segment.
Industrial: Three main segments of the industrial sector include automotive coatings, powder
coatings and protective coatings. Kansai Nerolac is the market leader in this segment. User
industries for industrial paints include automobiles engineering and consumer durables. The
industrial paints segment is far more technology intensive than the decorative segment.
The paints sector is raw material intensive, with over 300 raw materials (50% petro-based
derivatives) involved in the manufacturing process. Since most of the raw materials are petroleum
based, the industry benefits from softening crude prices.

39. 24
Key Points
Supply Supply exceeds demand in both the decorative as well as the industrial paints
segments. Industry is fragmented.
Demand Demand for decorative paints depends on the housing sector and good
monsoons. Industrial paint demand is linked to user industries like auto,
engineering and consumer durables.
Barriers to entry Brand, distribution network, working capital efficiency and technology play a
crucial role.
Bargaining
power of
suppliers
Price increase constrained with the presence of the unorganised sector for the
decorative segment. Sophisticated buyers of industrial paints also limit the
bargaining power of suppliers. It is therefore that margins are better in the
decorative segment.
Bargaining
power of
customers
High due to availability of wide choice.
Competition In both categories, companies in the organized sector focus on brand building.
Higher pricing through product differentiation is also followed as a
competitive strategy.
Financial Year 2016
FY16 had its share of both excitement as well as challenges. The arrival of a new Government at
the centre with a decisive majority raised hopes of a quick turnaround of the Indian economy.
However, it has now dawned that although many macroeconomic indicators are on the mend, it
will take time for the growth potential of the economy to be fully realized.
On the positive side, softening of international crude and commodity rates has eased the mounting
cost pressures on the industry to some extent. And while operating margins haven’t improved
much, they can certainly expand in the forthcoming quarters should things continue to remain the
same.

40. 25
Apart from better than expected economic growth, the boost to demand in FY17 can also
come from fall in inflation levels as it will have a positive effect on customer’s wallet and boost
his disposable income.
All the key players are almost done with capacity expansion and have started production
from new plants. Asian Paints’ plant in Khandala, Maharashtra has recently got commissioned.
Besides, it has initiated a project to double capacity at Rohtak plant in Haryana. Kansai Nerolac’s
capacity expansion plans at Jainpur and Bawal has culminated. Berger Paints has also
commissioned its water based paint plant at Hindupur in Andhra Pradesh. Its powder coating plant
at Jejuri has also been commissioned.
Prospects
The market for paints in India is expected to grow at 1.5 times to 2 times GDP in the next
five years. With GDP growth expected to be between 6-7% levels, the top three players are likely
to clock above industry growth rates in the future, considering they have a strong brand and good
reach.
The market size of the paint industry in India is estimated at around Rs.350 bn. Industry
players expect close to 12% growth in business volume and 10-12% rise in sales in FY17.
Decorative paints segment is expected to witness higher growth going forward. The fiscal
incentives given by the government to the housing sector have immensely benefited the housing
sector. This will benefit key players in the long term.
Although the demand for industrial paints is lukewarm it is expected to increase going
forward. This is on account of increasing investments in infrastructure. Domestic and global auto
majors have long term plans for the Indian market, which augur well for automotive paint
manufacturers like Kansai Nerolac and Asian-PPG. Increased industrial paint demand, especially
powder coatings and high performance coatings will also propel topline growth of paint majors in
the medium term.
Volatility of the Indian currency and international oil prices and worries about a normal
monsoon continue to be major challenges facing the paint industry.

41. 26
4.5.2 Fundamental Analysis of Paint Sector
In the fundamental analysis of paint sector I had taken large cap companies. There was
only 4 companies listed in NSE & BSE stock exchanges in India, so I had choose all the 4
companies for analysis.
Table-4 MarketCapitalisationof Large cap companies
S.no Company Name Market Cap (RS. Cr)
1 Asian Paints 98375.33
2 Berger Paints 19708.64
3 Kansai Nerolac 15978.97
4 Akzo Nobel 7031.94
Step 1: Computation of Overvalued or Undervalued stock
First I had found Earnings per share (EPS) then P/E ratio of all the four companies.
Formula of EPS is Net Profit / Number of outstanding shares and P/E ratio is Market value per
share / Earnings per share. After finding P/E ratio I had found the Sector P/E, which is average of
all the companies P/E ratio. Then I found the Long Term Price Target (LTPT). LTPT can be
calculated by multiplying Sector P/E and EPS. LTPT is the target price which is likely to be
achieved by the companies in the near future. If Price is greater than LTPT, then it is
“Overvalued stock”. If price is less than LTPT, then it is “Undervalued stock”.
Table-5 Calculationof Overvalued or Undervalued Stock
S.no Company name
Price on
10/7/2017 EPS
PE
ratio
Sector
P/E LTPT Remark
1 Asian Paints 860 14 56.61 41.95 587.3 Overvalued Stock
2 Berger paints 254.7 4 60.4 41.95 167.8 Overvalued Stock
3 Kansai Nerolac 280.35 5 18.01 41.95 209.75 Overvalued Stock
4 Akzo Nobel 1288.15 40 32.78 41.95 1678 Undervalued Stock

42. 27
Step 2: Computation of Undervalued stock
‘Top Line’, as a financial performance measure, only reports on how effective an enterprise has
been in generating sales/revenues.
For Top line, I consider the past two years revenues of companies for calculation of Percentage
change in top line.
‘Bottom Line’, on the other hand, as a financial performance measure, describes how efficient an
enterprise has been in controlling its costs. (Direct Expenses)
For Bottom line, I consider the past two years Raw material and employee benefits for
calculation of Percentage change in Bottom line.
Finally, Both Top line and Bottom line is increases then it is called “Value stock”.
Table-6 Calculationof Top Line of Undervalued Stock
S.no Undervalued Stock
Topline
RemarkRevenue (Rs. Cr)
2015 2014 % Change
1 Akzo Nobel 2607.3 2489.2 5% Increases by 5%
Table-7 Calculationof Bottom Line of Undervalued Stock
S.n
o
Undervalue
d Stock
Bottom line
%
Chang
e
Remark
2016 2015
RM &
Fuel
EE'
Benefi
t
Tota
l
RM &
Fuel
EE'
Benefi
t Total
1 Akzo Nobel
1438.
2 205.8 1644
1410.
5 193.9
1604.
4 2%
Increase
s by 2%
From Table 1 & 2, Both Top Line and Bottom Line Increases by 5% and 2%.
So “Akzo Nobel” is “Value stock”.

43. 28
Step 3: Computation of Overvalued stock
For computation of PEG Ratio, we need EPS growth and P/E ratio.
PEG Ratio = P/E ratio / Percentage change in EPS.
Percentage change in EPS = (Current year EPS – Previous year EPS)/Previous year EPS * 100.
Table-8 Calculationof Overvalued stock
S.no
Overvalued
stock
PE
ratio
2016
EPS
2015
EPS
% change in
EPS
PEG
ratio Remark
1 Asian Paints 56.61 14 12 16.6666 3.3966 Not satisfied
2 Berger paints 60.4 4 7 -42.8571 -1.4093 Not satisfied
3 Kansai Nerolac 18.01 5 38 -86.8421 -0.2074 Not satisfied
PEG ratio must be between 0 to 1, then that company is known as ‘’ Growth stock”.
From table 5, all these three companies (Asian paints, Berger paints & Nerolac) fails to attain
PEG Ratio between 0 to 1.
Step 4: Ratio Analysis:
The best way to analyze the financial statements is by studying the ‘Financial Ratios’.
The theory of financial ratios was made popular by Benjamin Graham, who is popularly known
as the father of fundamental analysis. Financial ratios help in interpreting the results, and allows
comparison with previous years and other companies in the same industry.
Valuation Ratio’s:
The valuation ratios help us develop a sense on how the stock price is valued by the
market participants. These ratios help us understand the attractiveness of the stock price from an
investment perspective. The point of valuation ratios is to compare the price of a stock viz a viz
the benefits of owning it. Like all the other ratios we had looked at, the valuation ratios of a
company should be evaluated alongside the company’s competitors.
Valuation ratios are usually computed as a ratio of the company’s share price to an aspect of its
financial performance.
We will be looking at the following three important valuation ratios:
1. Price to Sales (P/S) Ratio
2. Price to Book Value (P/BV) Ratio and
3. Price to Earnings (P/E) Ratio.

44. 29
1. Price to Sales (P/S)Ratio of Akzo Nobel
This ratio compares the stock price of the company with the company’s sales per share.
The formula to calculate the P/S ratio is:
Price to sales ratio = Current Share Price / Sales per Share.
Sales per share = Total Revenues / Total number of shares.
Total Revenue = 2592 cr
Number of Share = 4.6660 cr
Sales per share = 2592 / 4.6660 = 555.50
Price to sales ratio = 1426.45 / 555.50 = 2.567 times.
A P/S ratio of 2.56 times indicates that, for every Rs.1 of sales, the stock is valued
Rs.2.56 times higher. Obviously, higher the P/S ratio, higher is the valuation of the firm. One has
to compare the P/S ratio with its competitors in the industry to get a fair sense of how expensive
or cheap the stock is.
2. Price to Book Value (P/BV) Ratio of Akzo Nobel
The term ‘Book Value’ means the amount of money left on table after the company pays
off its obligations. Consider the book value as the salvage value of the company. i.e... The
amount that shareholder can expect in case the company decides to liquidate.
P/BV Ratio = Price / Book value
P/BV Ratio = 1426.45 / 240.15 = 5.93 times.
This means Akzo Nobel is trading over 5.9 times its book value.
A high ratio could indicate the firm is overvalued relative to the equity/ book value of the
company. A low ratio could indicate the company is undervalued relative to the equity/ book
value of the company.

45. 30
3. Price to Earnings (P/E) Ratio of Akzo Nobel
The Price to Earnings ratio is perhaps the most popular financial ratio. The P/E of a stock
is calculated by dividing the current stock price by the Earning Per share (EPS). Before we
proceed further to understand the PE ratio, let us understand what “Earnings per Share” (EPS)
stands for the profitability of a company on a per share basis.
P/E Ratio = Share price / EPS = 1426.45 / 40 = 35.66 times.
This means for every unit of profit generated by Akzo Nobel, the market participants are willing
to pay Rs.35.66 to acquire the share. Companies with lower P/E ratios are preferred to invest.
Allocation of funds in Paint sector
Based on the Value picks and the Growth picks I have decided to invest 8.5 Cr. out of
12.5 Cr. in paint sector. Out of 8.5 Cr. I have kept some of fund as cash in hand.
I have invested 8.5 Cr amount in Akzo Nobel. Akzo Nobel is a Value stock.
Table-9 Allocation of funds in Paint sector
S.no Stock name Price on 10/7/2017 Quantity Amount
1 Akzo Nobel 1288.15 65986 84999865.9
Total investment in paint sector 84999865.9

46. 31
Figure-8 Weightage offunds in Paint sectorCompanies
From 10th July 2017, I have started monitoring fund till 10th August 2017, in this time period
there was various ups and downs in the market and the price of all the stock were moving
accordingly. The position of the fund on 10th August 2017 was as follows.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Akzo Nobel
Akzo Nobel,
100%
Percentage
Companies
Weightage of funds in Paint sector Companies

47. 32
Table-10 Gain in paint sector
10-07-2017 10-08-2017
S.n
o
Stocks Units Price at Value
Price
Value
Gain or
Loss
Invested
Purchase
d
Inceptio
n in Rupees in Rupees in Rupees
1
Akzo
Nobel 65986 1288.15
84999865.
9
1426.4
5 94125729.7 9125863.8
Total
84999865.
9 94125729.7 9125863.8

48. 33
Figure-9 Gain or Loss in Percentage
Paint companies VS Benchmark
Benchmark: Nifty 50 Index
Paint companies Return: 11%
Nifty 50 Index Return: 3%
Akzo Nobel
11%
0%
2%
4%
6%
8%
10%
12%
Percentage
Companies
GAIN OR LOSS IN PERCENTAGE
Akzo Nobel

49. 34
Table-11 Benchmark Vs Paint companies
-4%
-2%
0%
2%
4%
6%
8%
10%
Power sector Return
Invested fund Benchmark

50. 35
Table-12 DailyPrice Fluctuations of Paint Companies and Nifty 50
Paint companies Benchmark(Nifty 50)
Day Date Amount
%
Change Day Date
Closing
value
%
Change
1 10-Jul 84999866 1 11-Apr 7671.4
2 11-Jul 86656115 2% 2 12-Apr 7708.95 0%
3 12-Jul 86194213 -1% 3 13-Apr 7850.45 2%
4 13-Jul 87507334 2% 4 18-Apr 7914.7 1%
5 14-Jul 88747871 1% 5 20-Apr 7914.75 0%
6 17-Jul 89483615 1% 6 21-Apr 7912.05 0%
7 18-Jul 87454545 -2% 7 22-Apr 7899.3 0%
8 19-Jul 86431762 -1% 8 25-Apr 7855.05 -1%
9 20-Jul 87019038 1% 9 26-Apr 7962.65 1%
10 21-Jul 88332159 2% 10 27-Apr 7979.9 0%
11 24-Jul 87279682 -1% 11 28-Apr 7847.25 -2%
12 25-Jul 87827366 1% 12 29-Apr 7849.8 0%
13 26-Jul 86920059 -1% 13 02-May 7805.9 -1%
14 27-Jul 87368763 1% 14 03-May 7747.00 -1%
15 28-Jul 87438049 0% 15 04-May 7706.55 -1%
16 30-Jul 86378973 -1% 16 05-May 7735.5 0%
17 01-Aug 86699005 0% 17 06-May 7733.45 0%
18 02-Aug 87507334 1% 18 09-May 7866.05 2%
19 03-Aug 88028623 1% 19 10-May 7887.8 0%
20 04-Aug 89206473 1% 20 11-May 7848.85 0%
21 07-aug 90367827 1% 21 12-May 7900.4 1%
22 08-Aug 89704668 -1% 22 13-May 7814.9 -1%
23 09-Aug 94650318 6% 23 16-May 7860.75 1%
24 10-Aug 94125730 -1% 24 17-May 7890.75 0%

51. 36
As you can see that, the returns of paint sector companies fund is more than that of the
Benchmark Nifty 50 Index. The returns given by the paint sector companies is 11% whereas the
return given by the Nifty 50 is 3%.
4.5.3 TechnicalAnalysis of Akzo Nobel
Figure-10 Resistance and Support

52. 37
Figure-11 Indicators
The outlook for the stock of Akzo Nobel is Bullish. The stock has been in a strong uptrend.
The 20-WMA will continue to remain a key support at Rs.1331. Stop-loss is at Rs.1247.
So, the price of stock will be increase in the future.
Akzo Nobel is “Technically” strong company.

53. 38
4.6 Fundamental and Technical analysis of Power Sector
4.6.1 Introduction
Central institutions like NTPC and the State Electricity Boards (SEBs) continue to
dominate the power sector in India. India has adopted a blend of thermal, hydel and nuclear
sources with a view to increasing the availability of electricity. Thermal plants at account for
about 60% of the total power generation capacity in India, followed by hydro-electricity (15%
share). The rest comes from nuclear and other renewable energy sources (RES).
Average transmission and distribution losses (T&D) exceed 25% of total power
generation compared. India's T&D losses are almost 2.5 times the world average. The T&D
losses are due to variety of reasons viz., substantial energy sold at low voltage, sparsely
distributed loads over large rural areas, inadequate investment in distribution system, improper
billing and high pilferage.
Lack of coal supply was a major hurdle in the power sector till some time back. Majority
of power generation takes place through thermal power plants which uses coal as its raw
material. However, with e-coal auctions coming in the picture, this problem seems to have been
resolved considerably. Major players in the generation space were sitting on sufficient
inventories of coal as at the end of the previous fiscal year. Further, big bang efforts are
underway to shift to renewable source of energy in order to reduce the carbon emission. The
government has laid down an ambitious plan to generate 100 GW of solar power capacity by
2022 from the 3.3GW at present. This will be a mammoth task to achieve given that land
acquisition remains cumbersome.
Presently, major concern for the power generators is the off-take of electricity. Power
generators sell power to SEBs or DISCOMs. SEBs are facing financial crisis and are minting
losses to the extent of Rs.700 billion annually. The SEBs do not have enough resources to
purchase power from the generators. Hence a situation has risen wherein there is excess of power
but no takers for the same.

54. 39
The government recently introduced 'Ujwal Discom Assurance Yojana' (UDAY) scheme
to rescue SEBs. Beneath the scheme, 75% of the loans on the SEBs books will be transferred in
the books of their respective state governments. Transferring such huge quantum of loans will
provide some relief to the SEBs in terms of finance costs. However, SEBs situation will improve
substantially only if there are regular tariff hikes. Most political parties intend to gain vote bank
from farmers by offering them free of cost power. The fear of losing vote bank makes the state
government reluctant to increase the power tariffs. This perception needs to be changed in order
to revive the sector.
Electricity supply in India is the sole responsibility of the Government of India and the states.
The Union Government controls the Central Electricity Authority (CEA), the main regulatory
body, and the central generating companies, which are:
 National Thermal Power Corporation (NTPC)
 National Hydro-Power Corporation (NHPC)
 Nuclear Power Corporation (NPC)
The states control the State Electricity Boards (SEBs), which generate power and account for
most of the distribution in the country. The states have also licensed five private power utilities
for generation and distribution, which are:
 Tata Electric Companies (TEC) comprising of Tata Power, Tata Hydro, which generates
and distributes power in Bombay.
 Andhra Valley Power, which generates and distributes power in Bombay.
 BSES, which generates and distributes power to the suburban areas of Bombay.
 CESC which generates and distributes power to the city of Calcutta.
 Ahmedabad Electricity Company which generates and distributes power to the city of
Ahmedabad.

55. 40
Figure-12 Structure of PowerSector
Power can be generated from water (hydro), thermal (coal or naphtha), wind and nuclear.
Since the Indian power sector has not been opened up for private sector participation in its true
sense, the centre and state governments have a major role to play. It is a politically sensitive
sector i.e. tariffs cannot be hiked as the vote bank could be affected.
A power company can be a generator, a transmitter, a distributor or a combination of all
three. Barriers to entry are high because it is capital intensive and regulated. While technology in
state government undertakings is poor, it will play a big role in the future, as consumers will
require good quality and uninterrupted supply of power. Currently, in India, we have 1, 07,533
MW of generation capacity out of which private sector contributes 11%. Let's have a look at the
revenue model for a power company.
Total revenues = Revenues from generation + transmission + distribution
Generation
For a company involved in generation of power, revenues will be a function of electricity
generated and tariffs applicable. Generation of electricity is a function of PLF (plant load factor)
and the capacity installed. PLF, in simple words, is like capacity utilisation. The level of PLF
varies depending upon the kind of generation plant. Generally, a hydro power plant or a wind
energy plant have low PLF (industry average 35%-50%). Thermal and nuclear power plants have
higher PLF (industry average 50%-65%), which ultimately results in higher production.
Power sector
Generation Transmission Distribution

56. 41
Investment in capacity in the power sector depends on various factors like: demand-supply
gap (in simpler words we can say deficiency), availability of funds, economic
growth and regulatory framework. All these factors are inter-related to some extent.
Demand and supply
One critical factor when it comes to analysing a power company is the fact that demand
expands as per supply. There is nothing like a 'market size' per se. The level of the growth in the
industrial sector, per capita consumption of consumer durable and electronic goods would indicate
the growth potential. For instance, the penetration level of air conditioners in India is just 0.5%. If
more people buy A/C or television or refrigerator, demand for power will increase. Therefore, as
far as demand-supply gap for a developing economy like India is concerned, it is irrelevant. The
country is power deficient.
Avaiability of funds
As we had mentioned before, the sector is capital intensive. It costs almost Rs 40 m to Rs
45 m to set up one megawatt (MW) of capacity. If a company is planning to increase capacity by
1,000 MW, it requires Rs 40 bn. From a retail investor perspective, look at the cash balance and
the current debt to equity ratio of the company from the balance sheet. This will give an idea
whether the company really has the muscle power to expand the stated capacity in the time frame
mentioned.
Economic Growth
Economic Growth will lead to increase the purchasing power of the people, which will
raise the living standard and in turn increase electricity demand. So, the circle starts again.
Regulatory framework
If a company is just into generation, it has to supply to a distributor for realising value for
the quantity of power sold. If the distributor is a SEB (i.e. state electricity board), the chances of
delayed payment are high, as SEBs are in poor state. Failure to receive money from SEBs could
hamper a company's capacity expansion plans.

57. 42
Having looked at the capacity side, consider factors involved on the tariffs front.
For a generation company that supplies electricity to a SEB, the respective state
governments fix tariffs. However, a power generation company can also supply to the national
grid at a specific rate. The national grid say, Power Grid Corporation, in turn could take the onus
of meeting SEB requirements. While the advantage is lower risk of delayed payment and fewer
losses on account of T&D, the disadvantage is that the tariffs are lower compared to a T&D player.
To put things in simple terms, the generation company gets a specific rate on power supplied
whereas it is not the case with a T&D player where there is differential tariff structure.
For a distribution company (like Tata Power or BSES in Mumbai), tariffs are different
depending upon the customers. Usually, industrial units are charged higher as compared to
households (cross-subsidisation). Agricultural sector is a mixed bag. While some states actually
charge for power supplied (like Tamil Nadu), in most other states, it is free. The advantage for a
generation and distribution company is that it can pass a rise in cost to customers in a deregulated
market. However, power theft and default rates are high for a distribution major. Watch out for
this as well.
Transmission
There can be independent transmission companies as well (like backbone service providers
in the telecom sector). The revenue model is similar. A transmission company buys power from a
generation company and hands it over to SEBs or a distribution company. When it comes to
advantages, it is like less capital and technology intensive. But a transmission company faces the
risks of default of payment by a distributor, high leakage losses and a cap on transmission charges.
Approximately 30%-35% or power generated is lost in transmission currently.
Distribution
The distribution company can also generate electricity in-house, but the process remains
same. Distribution Companies have pre-defined areas called 'circles' where they can supply
electricity. For a distribution company, metering plays a vital role. Metered units = Inhouse power
generated (if any) + Power sourced from a generator to meet additional requirement - T&D losses.

58. 43
A major concern for the Indian distribution companies is heavy T&D losses due to poor
infrastructure. Due to weak anti-theft laws, 10%-15% of power supplied is lost in distribution.
Key Points
Supply The addition to total installed capacity during FY16 was 26 gigawatt (GW), a
growth of 10.8% over the previous years installed capacity. The capacity
addition during the first three years of 12th plan stood at 61 GW which has
not only exceeded the capacity addition of the entire 11th plan, but also
constitutes 68.9% of the total 12th plan target of 89 GW. Hence, sufficient
capacity is being built to meet the demand requirements.
Demand The long-term average demand growth rate is expected to remain in the
higher single digit growth levels given the much lower per capita power
consumption in India as compared to the global average.
Barriers to
entry
Barriers to entry are high, especially in the transmission and distribution
segments, which are largely state monopolies. Also, entering the power
generation business requires heavy investment initially. The other barriers are
fuel linkages, payment guarantees from state governments that buy power
and retail distribution license.
Bargaining
power of
suppliers
Not very high since the tariff structure is mainly regulated.
Bargaining
power of
customers
Bargaining power of customers is low, as power is in short supply. However,
the government is a big buyer and payments from it can be erratic, as has
been seen in the past.
Competition Getting intense, but despite there being enough room for many players,
shortage of inputs such as and natural gas and regulatory hurdles has
dissuaded new entrants.

59. 44
FinancialYear '16
Average PLFs declined for all thermal power generation utilities across sectors.
Nevertheless, the Central Public Sector Undertakings continued to be the best performers,
followed by private sector. SEBs and IPPs were the worst performers during FY16. Key reason
for the declining PLFs was shortage of demand from the SEBs.
Energy deficit (difference between requirement and availability) was the lowest ever as
numbers improved tremendously during the year with the same standing at about 3.6% (5% in
FY15).
As far as the T&D space is concerned, the year gone by saw a major development - that
of the southern grid getting connected to the central grid in synchronous mode thereby achieving
the goal of 'One nation - one grid - one frequency'. Nevertheless, the country continues to reel
under the pressure of higher T&D losses (about 27%) and with the government going slow with
the reforms process in these segments. Financial turnaround of the distribution sector is essential
for commercial viability of the entire sector.
Prospects
Recognising that electricity is one of the key drivers for rapid economic growth and
poverty alleviation, the government and the industry has set itself the target of providing
electricity access to all households over the next few years. As per government reports, about
one third of the households do not have access to electricity. Hence, meeting the target of
providing universal access is a daunting task requiring significant addition to generation capacity
and expansion of the transmission and distribution network.

60. 45
The target for power capacity addition during the 12th Plan period is 88 GW. A capacity
of around 61 GW has already been added. However, a significant amount of capacity is stranded
owing to the non-availability of gas. However, recently government has taken steps to revive the
stranded gas based power projects. Rising demand and falling domestic production has pushed
the share of imported gas to 40% of the current consumption in India. The US has turned into a
net energy exporter on the back of huge quantities of shale gas and oil becoming available
commercially.
Restoration of the financial health of SEBs and improvement of their operating
performances continue to remain the critical issue for the sector. As such, effective
implementation of the restructuring package remains the key. While the power distribution space
has been a loss-making business in India on an overall basis, the investments in T&D are
expected to improve with the privatisation coming in.
4.6.2 Fundamental Analysis of Power Sector
In the fundamental analysis of paint sector I had taken large cap companies. There was 14
companies listed in NSE & BSE stock exchanges in India, so I had choose all the 14 companies
for analysis.
Table-13 MarketCapitalisationofLarge cap companies
S.no Company Name Market Cap (RS. Cr)
1 NTPC 121867.96
2 Power Grid Corp 78656.96
3 NHPC 27289.2
4 Tata Power 19973.69
5 Reliance Power 14250.04
6 Reliance Infra 13757.01
7 SJVN 11520.5
8 Neyveli Lignite 11425.2
9 JSW Energy 11332.78
10 Adani Power 9901.8
11 Torrent Power 8559.78
12 Suzlon Energy 7706.47
13 CESC 7281.36
14 Alstom T&D 8735.03

61. 46
Step 1: Computation of Overvalued or Undervalued stock
First I had found Earnings per share (EPS) then P/E ratio of all the four companies.
Formula of EPS is Net Profit / Number of outstanding shares and P/E ratio is Market value per
share / Earnings per share. After finding P/E ratio I had found the Sector P/E, which is average of
all the companies P/E ratio. Then I found the Long Term Price Target (LTPT). LTPT can be
calculated by multiplying Sector P/E and EPS. LTPT is the target price which is likely to be
achieved by the companies in the near future. If Price is greater than LTPT, then it is
“Overvalued stock”. If price is less than LTPT, then it is “Undervalued stock”.
Table-14 CalculationofOvervalued or Undervalued Stock
S.no Company name
Price on
10/07/17 EPS
PE
ratio
Sector
P/E LTPT Remark
1 NTPC 134.6 12.7 11.11 137.34 1744.218 Undervalued Stock
2 Power Grid Corp 142.25 11.16 12.95 137.34 1532.714 Undervalued Stock
3 NHPC 23.8 2.69 7.94 137.34 369.4446 Undervalued Stock
4 Tata Power 67.5 3.45 20.38 137.34 473.823 Undervalued Stock
5 Reliance Power 51.5 1.05 46.95 137.34 144.207 Undervalued Stock
6 Reliance Infra 576 64.9 7.88 137.34 8913.366 Undervalued Stock
7 SJVN 28.5 3.5 7.94 137.34 480.69 Undervalued Stock
8 Neyveli Lignite 70.05 8.55 7.95 137.34 1174.257 Undervalued Stock
9 JSW Energy 65.2 5.89 11.48 137.34 808.9326 Undervalued Stock
10 Adani Power 34.6 0.02 1482.5 137.34 2.7468 Overvalued Stock
11 Torrent Power 226.5 26.48 8.58 137.34 3636.763 Undervalued Stock
12 Suzlon Energy 14.35 0.04 170 137.34 5.4936 Overvalued Stock
13 CESC 475.2 53.03 10.28 137.34 7283.14 Undervalued Stock
14 Alstom T&D 422.9 3.03 116.83 137.34 416.1402 Overvalued Stock

62. 47
Step 2: Computation of Undervalued stock
‘Top Line’, as a financial performance measure, only reports on how effective an enterprise has
been in generating sales/revenues.
For Top line, I consider the past two years revenues of companies for calculation of Percentage
change in top line.
‘Bottom Line’, on the other hand, as a financial performance measure, describes how efficient an
enterprise has been in controlling its costs. (Direct Expenses)
For Bottom line, I consider the past two years Raw material and employee benefits for
calculation of Percentage change in Bottom line.
Finally, Both Top line and Bottom line is increases then it is called “Value stock”.
Table-15 CalculationofTop Line of Undervalued Stock
Topline
S.no Undervalued Stock
Revenue
% Change
2016 2015
1 NTPC 75564.27 74770.56 1%
2 Power Grid Corp 17780.04 15721.41 13%
3 NHPC 8185.53 6993.9 17%
4 Tata Power 9702.37 9282.8 5%
5 Reliance Power 369.32 366.12 1%
6 Reliance Infra 12098.21 12581.45 -4%
7 SJVN 3128.82 2110.72 48%
8 Neyveli Lignite 7347.2 6991.56 5%
9 JSW Energy 6591.42 5687.34 16%
10 Torrent Power 10573.93 8817.46 20%
11 CESC 6273.6 5609.54 12%

63. 48
Table-16 CalculationofBottom Line of Undervalued Stock
Bottom line
S.no
Undervalued
Stock
2016 2015
%
Change
RM &
Fuel
EE'
Benefit Total
RM &
Fuel
EE'
Benefit Total
1 NTPC 49549.2 3669.78 53218.98 46517.89 3824.78 50342.7 6%
2 Power Grid Corp 171 1023.65 1194.65 341.63 941.68 1283.31 -7%
3 NHPC 30.4 1149.23 1179.63 26.9 1058.67 1085.57 9%
4 Tata Power 4112.65 686.52 4799.17 4153.1 544.95 4698.05 2%
5 Reliance Power 37.68 36.32 74 53.21 41.25 94.46 -22%
6 Reliance Infra 4789.88 976.19 5766.07 3992.5 823.11 4815.61 20%
7 SJVN 0 199.57 199.57 0 123.75 123.75 61%
8 Neyveli Lignite 743.01 2217.38 2960.39 734.09 2194.59 2928.68 1%
9 JSW Energy 3884.85 98.84 3983.69 3489.15 88.97 3578.12 11%
10 Torrent Power 7332.66 338.15 7670.81 6590.34 270.33 6860.67 12%
11 CESC 3441.82 694.09 4135.91 3094.22 694.18 3788.4 9%

64. 49
Table-17 CalculationofValue stock
S.no Undervalued Stock
Top line
%change
Bottom line
%change
Remark
1 NTPC 1% 6% Value Stock
2 Power Grid Corp 13% -7% Not Satisfied
3 NHPC 17% 9% Value Stock
4 Tata Power 5% 2% Value Stock
5 Reliance Power 1% -22% Not Satisfied
6 Reliance Infra -4% 20% Not Satisfied
7 SJVN 48% 61% Value Stock
8 Neyveli Lignite 5% 1% Value Stock
9 JSW Energy 16% 11% Value Stock
10 Torrent Power 20% 12% Value Stock
11 CESC 12% 9% Value Stock
Step 3: Computation of Overvalued stock
For computation of PEG Ratio, we need EPS growth and P/E ratio.
PEG Ratio = P/E ratio / Percentage change in EPS.
Percentage change in EPS = (Current year EPS – Previous year EPS)/Previous year EPS * 100.
Table-18 CalculationofOvervalued stock
S.no
Overvalued
stock
PE
ratio
2015
EPS
2014
EPS
% change in
EPS
PEG
ratio Remark
1 Adani Power 1485 -0.24 2.13 -111.27 -13.3462 Not satisfied
2 Suzlon Energy 170 -20.09 -4.13 386.440678 0.4399 Growth stock
3 Alstom T&D 116.83 4.71 4.78 -1.464435146 -79.7782 Not satisfied
PEG ratio must be between 0 and 1, then that company is known as ‘’ Growth stock”.
Suzlon Energy attains the PEG Ratio between 0 and 1.
Therefore, Suzlon Energy is a “Growth Stock”.

65. 50
Step 4: Ratio Analysis:
The best way to analyze the financial statements is by studying the ‘Financial Ratios’.
The theory of financial ratios was made popular by Benjamin Graham, who is popularly known
as the father of fundamental analysis. Financial ratios help in interpreting the results, and allows
comparison with previous years and other companies in the same industry.
Valuation Ratio’s:
The valuation ratios help us develop a sense on how the stock price is valued by the
market participants. These ratios help us understand the attractiveness of the stock price from an
investment perspective. The point of valuation ratios is to compare the price of a stock viz a viz
the benefits of owning it. Like all the other ratios we had looked at, the valuation ratios of a
company should be evaluated alongside the company’s competitors.
Valuation ratios are usually computed as a ratio of the company’s share price to an aspect of its
financial performance.
1. Price to Sales (P/S) Ratio
This ratio compares the stock price of the company with the company’s sales per share.
The formula to calculate the P/S ratio is:
Price to sales ratio = Current Share Price / Sales per Share.
Sales per share = Total Revenues / Total number of shares.

66. 51
Table-19 Price to sales ratio
S.no Companies
Total
revenue
No.of
shares
Sales per
share share price
P/s
ratio Rank
1 NTPC 73915.69 824.54644 89.6441 137 1.528 9
2 NHPC 7663.58 1107.0668 6.9224 21.45 3.099 6
3 Tata Power 9702.37 270.46253 35.8733 69.95 1.950 7
4 SJVN 326110 41366.265 7.8835 27.65 3.507 5
5 Neyveli Lignite 6796.97 167.77096 40.5134 70 1.728 8
6 JSW Energy 6625.65 1640.05 4.0399 70.95 17.562 1
7 Torrent Power 10596.92 472.45 22.4297 224.8 10.022 3
8 CESC 6273.6 133.22 47.0920 538.15 11.428 2
9 Suzlon Energy 2270.3 745.33 3.0460 15.15 4.974 4
Obviously, higher the P/S ratio, higher is the valuation of the firm. One has to compare the P/S
ratio with its competitors in the industry to get a fair sense of how expensive or cheap the stock
is. From above table JSW Energy best company in Price to Sales (P/S) Ratio.
2. Price to Book Value (P/BV) Ratio
The term ‘Book Value’ means the amount of money left on table after the company pays
off its obligations. Consider the book value as the salvage value of the company. i.e... The
amount that shareholder can expect in case the company decides to liquidate.
P/BV Ratio = Price / Book value
Table-20 Price to Book Value (P/BV) Ratio
S.no Companies Price Book value PB ratio Rank
1 NTPC 137 111.46 1.23 3
2 NHPC 21.45 27.75 0.77 7
3 Tata Power 69.95 61.01 1.15 4
4 SJVN 27.65 28.07 0.99 5
5 Neyveli Lignite 70 95.82 0.73 8
6 JSW Energy 70.95 52.19 1.36 2
7 Torrent Power 224.8 160.89 1.40 1
8 CESC 538.15 598.59 0.90 6
9 Suzlon Energy 15.15 -2.79 -5.43 9

67. 52
A high ratio could indicate the firm is overvalued relative to the equity/ book value of the
company. A low ratio could indicate the company is undervalued relative to the equity/ book
value of the company.
3. Price to Earnings (P/E) Ratio
The Price to Earnings ratio is perhaps the most popular financial ratio. The P/E of a stock
is calculated by dividing the current stock price by the Earning Per share (EPS). Before we
proceed further to understand the PE ratio, let us understand what “Earnings per Share” (EPS)
stands for the profitability of a company on a per share basis.
P/E Ratio = Share price / EPS
Table-21 Price to Earnings (P/E) Ratio
S.no Companies Price EPS P/E Ratio Rank
1 NTPC 137 12.7 10.79 4
2 NHPC 21.45 2.69 7.97 2
3 Tata Power 69.95 3.45 20.28 7
4 SJVN 27.65 3.5 7.90 1
5 Neyveli Lignite 70 8.55 8.19 3
6 JSW Energy 70.95 5.89 12.05 6
7 Torrent Power 224.8 3.45 65.16 8
8 CESC 538.15 53.03 10.15 5
9 Suzlon Energy 15.15 0.04 378.75 9
Companies with lower P/E ratios are preferred to invest. “Suzlon Energy” is the best company in
P/E Ratio.
Allocation of funds in Powersector
Based on above Valuation ratio, I have selected top best five companies for investment in power sector.

68. 53
Table-22 Allocation of funds in power sector
S.no Stock name Quantity Price Amount
1 CESC 42025 475.9 19999697.5
2 JSW Energy 111947 67 7500449
3 Suzlon Energy 523015 14.34 7500035.1
4 NTPC 18573 134.6 2499925.8
5 Tata Power 36926 67.7 2499890.2
Grand Total 39999997.6
Figure-13 Weightage ofPowercompanies
From 10th July 2017, I have started monitoring fund till 10th August 2017, in this time period
there was various ups and downs in the market and the price of all the stock were moving
accordingly. The position of the fund on 10th August 2017 was as follows.
0%
10%
20%
30%
40%
50%
CESC JSW
Energy
Suzlon
Energy
NTPC Tata Power
50%
19% 19%
6% 6%
Percentage
Companies
Weightage of Power companies

69. 54
Table-23 Gain in Power sector
10 July 2017 10 August 2017
S.no Stocks Units Price at Value Price Value
Gain or
Loss
Invested Purchased Inception in Rupees in Rupees in Rupees
1 CESC 42025 475.9 19999697.5 538.15 22615753.8 2616056.25
2 JSW Energy 111947 67 7500449 71 7948237 447788
3 Suzlon Energy 523015 14.34 7500035.1 15.15 7923677.25 423642.15
4 NTPC 18573 134.6 2499925.8 137 2544501 44575.2
5 Tata Power 36926 67.7 2499890.2 70 2584820 84929.8
Total 39999997.6 43616989 3616991.4
Figure-14 Gain in Rupees
Figure-15 Gain in Percentage
0
500000
1000000
1500000
2000000
2500000
3000000
CESC JSW
Energy
Suzlon
Energy
NTPC Tata
Power
2616056.25
447788 423642.15
44575.2 84929.8
Gain
Companies
Gain in Rupees

70. 55
Powercompanies VS Benchmark
Benchmark: Nifty Energy Index
Power companies Return: 9%
Nifty Energy Index Return: - 2%
Figure-16 Power companies VS Benchmark
0%
2%
4%
6%
8%
10%
12%
14%
CESC JSW Energy Suzlon Energy NTPC Tata Power
13%
6%
6%
2%
3%
Percentage
Companies
Gain in Percentage

71. 56
-4%
-2%
0%
2%
4%
6%
8%
10%
Power sector Return
Invested fund Benchmark

72. 57
Table-24 DailyPrice Fluctuations of PowerCompanies and Nifty Energy
Power companies Benchmark(Nifty Energy)
Day Date Amount
%
Change Day Date Value
%
Change
1 10-Jul 39999997.60 1 11-Apr 8484.10
2 11-Jul 40871793.55 2% 2 12-Apr 8554.05 1%
3 12-Jul 41485032.20 2% 3 13-Apr 8678.05 1%
4 13-Jul 42410713.30 2% 4 18-Apr 8694.90 0%
5 14-Jul 43536804.90 3% 5 20-Apr 8610.35 -1%
6 17-Jul 42822678.05 -2% 6 21-Apr 8641.90 0%
7 18-Jul 43293103.20 1% 7 22-Apr 8659.00 0%
8 19-Jul 43446028.70 0% 8 25-Apr 8523.45 -2%
9 20-Jul 43477895.90 0% 9 26-Apr 8554.65 0%
10 21-Jul 43579037.30 0% 10 27-Apr 8609.35 1%
11 24-Jul 42533924.80 -2% 11 28-Apr 8410.80 -2%
12 25-Jul 43218850.55 2% 12 29-Apr 8404.65 0%
13 26-Jul 43563776.75 1% 13 02-May 8419.10 0%
14 27-Jul 42958459.45 -1% 14 03-May 8341.90 -1%
15 28-Jul 42595222.60 -1% 15 04-May 8306.70 0%
16 31-Jul 42349085.55 -1% 16 05-May 8289.05 0%
17 01-Aug 43071859.45 2% 17 06-May 8299.95 0%
18 02-Aug 43334264.90 1% 18 09-May 8395.75 1%
19 03-Aug 43152860.75 0% 19 10-May 8340.20 -1%
20 04-Aug 42844098.50 -1% 20 11-May 8288.35 -1%
21 07-Aug 43052223.30 0% 21 12-May 8380.05 1%
22 08-Aug 43237876.40 0% 22 13-May 8303.70 -1%
23 09-Aug 43319434.95 0% 23 16-May 8276.75 0%
24 10-Aug 43616989.00 1% 24 17-May 8290.95 0%

73. 58
As you can see that the returns of power sector companies fund is more than that of the
Benchmark Nifty Energy Index. The returns given by the power sector is 9% whereas the return
given by the Nifty 50 is -2%.
4.6.3 Technical analysis of Power companies
CESC LTD
Figure-17 Resistance and Support

74. 59
Figure-18 Indicators
The outlook for the stock of CESC LTD is Bearish. The stock has been in a downtrend but in
past few months it is uptrend by forming Bullish Engulfing.
The 20-WMA will continue to remain a key support at Rs.483. Stop-loss is at Rs.398.
So, the price of stock will be increase in the future.

75. 60
JSW ENERGYLTD
Figure-19 Resistance and Support
Figure-20 Indicators

76. 61
The outlook for the stock of JSW ENERGY LTD is Bearish. The stock has been in a downtrend
but in past five months it is uptrend, we can observe in chart.
The 20-WMA will continue to remain a key support at Rs.68 and Stop-loss is at Rs.58.
So, the price of stock will be increase in the future.
SUZLON ENERGYLTD
Table-21 Resistance and Support
Table-22 Indicators

77. 62
The outlook for the stock of SUZLON ENERGY LTD is Bearish. The stock has been in a
downtrend but in past three months it is uptrend, we can observe in chart.
The 20-WMA will continue to remain a key support at Rs.14 and Stop-loss is at Rs.13.
So, the price of stock will be increase in the future.

78. 63
NTPC LTD
Table-23 Resistance and Support
Table-24 Indicators

79. 64
The outlook for the stock of NTPC LTD is Bearish. The stock has been in a downtrend but in
past five months it is uptrend, we can observe in chart.
The 20-WMA will continue to remain a key support at Rs.133 and Stop-loss is at Rs.120.
So, the price of stock will be increase in the future.
TATA POWER CO LTD
Table-25 Resistance and Support

80. 65
Table-26 Indicators
The outlook for the stock of TATA POWER CO LTD is Bearish. The stock has been in a
downtrend but in past three months it is uptrend, we can observe in chart.
The 20-WMA will continue to remain a key support at Rs.63 and Stop-loss is at Rs.55.
So, the price of stock will be increase in the future.
4.7 Findings & Conclusion
Paint Companies
Akzo Nobel is fundamentally strong company as their PE ratio is low compared to
other companies and it is “Value Stock”.
Asian paints, Berger paints & Nerolac fails to attain PEG ratio between 0 to 1.
Technically also Akzo Nobel is a strong company.
The stock has been in a strong uptrend and it is in Bullish Engulfing pattern.
Akzo Nobel is “Fundamentally and Technically” very strong company.

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Power Companies
CESC, Jsw Energy, Suzlon Energy, NTPC, TATA Power all these companies are
fundamentally strong.
Power generators sell power to State Electricity Boards (SEBs), which fix the tariff in
respective state.
Most political parties intend to gain vote bank from farmers by offering them free of
cost power. The fear of losing vote bank makes the state government reluctant to increase the
power tariffs. This perception needs to be changed in order to revive the sector.
Restoration of the financial health of SEBs and improvement of their operating
performances continue to remain the critical issue for the sector. As such, effective
implementation of the restructuring package remains the key to the sector.
Technically power companies stocks are Bearish. But from past five months
companies stocks are indicating strong uptrend.
So, the price of stock will be increase in the future.
CESC, Jsw Energy, Suzlon Energy, NTPC, TATA Power all these companies are
“Fundamentally and Technically” very strong.
As you can see that the returns of paint and power sector companies fund (MSRIM Large Cap
Fund) is more than that of the Benchmark Nifty 50 Index. The returns given by the MSRIM
Large Cap Fund is 10% whereas the return given by the Nifty 50 is 3%.
4.8 Recommendations
Based on analysis and findings of study, new mutual fund is recommended
 It allows you to invest in a portfolio targeted at large-cap stocks which are the
preferred picks in their respective sectors.
 It offers a mitigated risk through diversification across sectors.

82. 67
Bibliography
http://insurance.birlasunlife.com/Pages/Individual/Home.aspx
http://www.adityabirla.com/home
http://www.adityabirlanuvo.com/annual_Reports.php
http://www.ibef.org/industry/insurance-sector-india.aspx
https://simconblog.wordpress.com/2015/08/19/insurance-industry-analysis/
http://economictimes.indiatimes.com/definition/general-insurance
http://www.ibef.org/industry/insurance-presentation
http://www.policyholder.gov.in/indian_insurance_market.aspx
http://www.nseindia.com
http://www.bseindia.com
http://www.moneycontrol.com

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ANNEXURE

84. 69
RAMAIAH ACADEMY OF MANAGEMENT
MBA (UoM) - II Semester - Batch 2016-2018
Weekly Report of SUMMER INTERNSHIP (SIP)
At
Birla Sun life Insurance, Bangalore (Indira Nagar)
To Prof. ARUL JYOTI, Ramaiah Academy of Management, Bangalore.
Madam,
The following tasks were undertaken during the week of 03.08.2017to 09.08.2017
Date Task Handled
Observation /
Remarks of
Faculty Guide
03.08.2017 Working on Investment policies and clients.
04.08.2017 ---------------------Holiday ------------------------
05.08.2017 -------------------Saturday---------------------
06.08.2017 ---------------------Sunday------------------------
07.08.2017 Explanation on Investment policies and clients.
08.08.2017 Working on Investment policies and clients.
09.08.2017 Working on Investment policies and clients.
Student Name: S. CHAITANYA Reg. No.: 163241
Student Signature: ____________
Faculty Guide Signature: _________________

85. 70
RAMAIAH ACADEMY OF MANAGEMENT
MBA (UoM) - II Semester - Batch 2016-2018
Weekly Report of SUMMER INTERNSHIP (SIP)
At
Birla Sun life Insurance, Bangalore (Indira Nagar)
To Prof. ARUL JYOTI, Ramaiah Academy of Management, Bangalore.
Madam,
The following tasks were undertaken during the week 13.07.2017 to 19.07.2017
Date Task Handled
Observation /
Remarks of
Faculty Guide
13.07.2017 Assigned a task to work on Business Model based
on the business plan, which has been assigned i.e.
SWOT analysis.
14.07.2017 Assigned a task to work on Revenue model based
on the business plan, which has been assigned.
15.07.2017 -------------------Saturday---------------------
16.07.2017 ---------------------Sunday------------------------
17.07.2017 Presentation on Innovative ProductDevelopment
18.07.2017 Presentation on Innovative Product Development
19.07.2017 Documentary on “The founder of McDonalds”
Student Name: S. CHAITANYA Reg. No.: 163241
Student Signature: ____________
Faculty Guide Signature: _________________

86. 71
RAMAIAH ACADEMY OF MANAGEMENT
MBA (UoM) - II Semester - Batch 2016-2018
Weekly Report of SUMMER INTERNSHIP (SIP)
At
Birla Sun life Insurance, Bangalore (Indira Nagar)
To Prof. ARUL JYOTI, Ramaiah Academy of Management, Bangalore.
Madam,
The following tasks were undertaken during the week of 20.07.2017to 26.07.2017
Date Task Handled
Observation /
Remarks of
Faculty Guide
20.07.2017 Assigned a task to work on fundamental aspects
of paint and power sector
21.07.2017 Worked on fundamental aspects of Engineering Sector.
22.07.2017 -------------------Saturday---------------------
23.07.2017 ---------------------Sunday------------------------
24.07.2017 Assigned a task to work on Technical aspects of
paint Sectorand presented in a word document.
25.07.2017 Worked on technical aspects of Engineering Sector.
26.07.2017 Discussed about Investment policies and clients.
Student Name: S. CHAITANYA Reg. No.: 163241
Student Signature: ____________
Faculty Guide Signature: _________________

87. 72
RAMAIAH ACADEMY OF MANAGEMENT
MBA (UoM) - II Semester - Batch 2016-2018
Weekly Report of SUMMER INTERNSHIP (SIP)
At
Birla Sun life Insurance, Bangalore (Indira Nagar)
To Prof. ARUL JYOTI, Ramaiah Academy of Management, Bangalore.
Madam,
The following tasks were undertaken during the week of 27.07.2017to 02.08.2017
Date Task Handled
Observation /
Remarks of
Faculty Guide
27.07.2017 Worked on technical aspects of Banking Sector and
presented it in a word document.
28.07.2017 ---------------------Holiday ------------------------
29.07.2017 -------------------Saturday---------------------
30.07.2017 ---------------------Sunday------------------------
31.07.2017 Discussed about Investment policies and clients.
01.08.2017 Working on Investment policies and clients.
02.08.2017 Working on Investment policies and clients.
Student Name: S. CHAITANYA Reg. No.: 163241
Student Signature: ____________
Faculty Guide Signature: _________________

88. 73
RAMAIAH ACADEMY OF MANAGEMENT
MBA (UoM) - II Semester - Batch 2016-2018
Weekly Report of SUMMER INTERNSHIP (SIP)
At
Birla Sun life Insurance, Bangalore (Indira Nagar)
To Prof. ARUL JYOTI, Ramaiah Academy of Management, Bangalore.
Madam,
The following tasks were undertaken during the week of 03.08.2017to 10.08.2017
Date Task Handled
Observation /
Remarks of
Faculty Guide
03.08.2017 Working on Investment policies and clients.
04.08.2017 Working on Investment policies and clients.
05.08.2017 -------------------Holiday---------------------
06.08.2017 ---------------------Sunday-------------------
07.08.2017 Working on Investment policies and clients.
08.08.2017 Working on Investment policies and clients.
09.08.2017 Working on Investment policies and clients.
10.08.2017 Working on Investment policies and clients.
Student Name: S. CHAITANYA Reg. No.: 163241
Student Signature: ____________
Faculty Guide Signature: _________________

89. 74