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Elize Beth

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A project report on A study on Equity Analysis at India-Infoline . Submitted in partial fulfillment of the Requirements for the award of the Degree of MASTER OF !S"#ESS ADM"#"STRAT"O# Submitted $ Elizebeth 13BK1E00 !nder the %uidance of DEPARTE!T "# B$%I!E%% ADI!I%TRATI"! %T PETER% E!&I!EERI!& '"((E&E  &Affiliated to 'awaharlal #ehru Technological !ni(ersit$ )$derabad* )$derabad +,-. / +,-0
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A project report

on

A study on Equity Analysis

at

India-Infoline .

Submitted in partial fulfillment of the

Requirements for the award of the Degree

of 

MASTER OF !S"#ESS ADM"#"STRAT"O#

Submitted $

Elizebeth

13BK1E00

!nder the %uidance of 

DEPARTE!T "# B$%I!E%% ADI!I%TRATI"!

%T PETER% E!&I!EERI!& '"((E&E

 &Affiliated to 'awaharlal #ehru Technological !ni(ersit$ )$derabad*

)$derabad

+,-. / +,-0

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1)A2TER "

 "#TROD!1T"O#

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I!TR"D$'TI"!

"ndia is a de(eloping countr$3 #owada$s man$ people are interested to in(est in financial

mar4ets especiall$ on equities to get high returns5 and to sa(e ta6 in honest wa$3 Equities

are pla$ing a major role in contribution of capital to the business from the beginning3

Since the introduction of shares concept5 large numbers of in(estors are showing interest

to in(est in stoc4 mar4et3

"n an industr$ plagued with s4epticism and a stoc4 mar4et increasingl$ difficult to predict

and contend with5 if one loo4s hard enough there ma$ still be a genuine aid for the Da$

Trader and Short Term "n(estor3

The price of a securit$ represents a consensus3 "t is the price at which one person agrees

to bu$ and another agrees to sell3 The price at which an in(estor is willing to bu$ or sell

depends primaril$ on his e6pectations3 "f he e6pects the securit$7s price to rise5 he will

 bu$ it8 if the in(estor e6pects the price to fall5 he will sell it3 These simple statements are

the cause of a major challenge in forecasting securit$ prices5 because the$ refer to human

e6pectations3 As we all 4now firsthand5 humans e6pectations are neither easil$

quantifiable nor predictable3 "f prices are based on in(estor e6pectations5 then 4nowing

what a securit$ should sell for &i3e35 fundamental anal$sis* becomes less important than

4nowing what other in(estors e6pect it to sell for3 That7s not to sa$ that 4nowing what a

securit$ should sell for isn7t important99it is3 ut there is usuall$ a fairl$ strong consensus

of a stoc47s future earnings that the a(erage in(estor cannot dispro(e

Fundamental anal$sis and technical anal$sis can co9e6ist in peace and complement each

other3 Since all the in(estors in the stoc4 mar4et want to ma4e the ma6imum profits

 possible5 the$ just cannot afford to ignore either fundamental or technical anal$sis

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:"TERAT!RE

RE;"E<

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%E'$RIT) A!A()%I%

"n(estment success is prett$ much a matter of careful selection and timing of stoc4 

 purchases coupled with perfect matching to an indi(iduals ris4 tolerance3 "n order to carr$

out selection5 timing and matching actions an in(estor must conduct deep securit$

anal$sis3

"n(estors purchase equit$ shares with two basic objecti(es8

-3 To ma4e capital profits b$ selling shares at higher prices3

+3 To earn di(idend income3

These two factors are affected b$ a host of factors3 An in(estor has to carefull$

understand and anal$=e all these factors3 There are basicall$ two approaches to stud$

securit$ prices and (aluation i3e3 fundamental anal$sis and technical anal$sis

The (alue of common stoc4 is determined in large measure b$ the performance of the

firm that issued the stoc43 "f the compan$ is health$ and can demonstrate strength and

growth5 the (alue of the stoc4 will increase3 <hen (alues increase then prices follow and

returns on an in(estment will increase3 )owe(er5 just to 4eep the sa(($ in(estor on their 

toes5 the mi6 is complicated b$ the ris4 factors in(ol(ed3 Fundamental anal$sis e6aminesall the dimensions of ris4 e6posure and the probabilities of return5 and merges them with

 broader economic anal$sis and greater industr$ anal$sis to formulate the (aluation of a

stoc43

#$!DAE!TA( A!A()%I%

Fundamental anal$sis is a method of forecasting the future price mo(ements of a

financial instrument based on economic5 political5 en(ironmental and other rele(ant

factors and statistics that will affect the basic suppl$ and demand of whate(er underlies

the financial instrument3 "t is the stud$ of economic5 industr$ and compan$ conditions in

an effort to determine the (alue of a compan$>s stoc43 Fundamental anal$sis t$picall$

focuses on 4e$ statistics in compan$>s financial statements to determine if the stoc4 price

is correctl$ (alued3 The term simpl$ refers to the anal$sis of the economic well9being of a

financial entit$ as opposed to onl$ its price mo(ements3

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Fundamental anal$sis is the cornerstone of in(esting3 The basic philosoph$ underl$ing

the fundamental anal$sis is that if an in(estor in(ests re3- in bu$ing a share of a compan$5

how much e6pected returns from this in(estment he has3

The fundamental anal$sis is to appraise the intrinsic (alue of a securit$3 "t insists that no

one should purchase or sell a share on the basis of tips and rumors3 The fundamental

approach calls upon the in(estors to ma4e his bu$ or sell decision on the basis of a

detailed anal$sis of the information about the compan$5 about the industr$5 and the

econom$3 "t is also 4nown as ?top9down approach@3 This approach attempts to stud$ the

economic scenario5 industr$ position and the compan$ e6pectations and is also 4nown as

*e+ono,i+-industy-+o,any aoa+h /EI' aoa+h3

Thus the EI' aoa+h in(ol(es three steps

-3 Economic anal$sis

+3 "ndustr$ anal$sis

.3 1ompan$ anal$sis

-3 E'"!"I' A!A()%I%

The le(el of economic acti(it$ has an impact on in(estment in man$ wa$s3 "f the

econom$ grows rapidl$5 the industr$ can also be e6pected to show rapid growth and (ice

(ersa3 <hen the le(el of economic acti(it$ is low5 stoc4 prices are low5 and when the

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le(el of economic acti(it$ is high5 stoc4 prices are high reflecting the prosperous outloo4 

for sales and profits of the firms3 The anal$sis of macro economic en(ironment is

essential to understand the beha(ior of the stoc4 prices3

The commonl$ anal$=ed macro economic factors are as follows

&oss Do,esti+ Podu+t /&DP2 %D2 indicates the rate of growth of the econom$3 "t

represents the aggregate (alue of the goods and ser(ices produced in the econom$3 "t

consists of personal consumption e6penditure5 gross pri(ate domestic in(estment and

go(ernment e6penditure on goods and ser(ices and net e6ports of goods and ser(ices3

The growth rate of econom$ points out the prospects for the industrial sector and the

return in(estors can e6pect from in(estment in shares3 The higher growth rate is more

fa(orable to the stoc4 mar4et3

%ain4s and inest,ent2 "t is ob(ious that growth requires in(estment which in turn

requires substantial amount of domestic sa(ings3 Stoc4 mar4et is a channel through

which the sa(ings are made a(ailable to the corporate bodies3 Sa(ings are distributed o(er 

(arious assets li4e equit$ shares5 deposits5 mutual funds5 real estate and bullion3 The

sa(ings and in(estment patterns of the public affect the stoc4 to a great e6tent3

Inflation2 Along with the growth of %D25 if the inflation rate also increases5 then the real

growth would be (er$ little3 The effects of inflation on capital mar4ets are numerous3 An

increase in the e6pected rate of inflation is e6pected to cause a nominal rise in interest

rates3 Also5 it increases uncertaint$ of future business and in(estment decisions3 As

inflation increases5 it results in e6tra costs to businesses5 thereb$ squee=ing their profit

margins and leading to real declines in profitabilit$3

Inteest ates2 The interest rate affects the cost of financing to the firms3 A decrease in

interest rate implies lower cost of finance for firms and more profitabilit$3 More mone$ is

a(ailable at a lower interest rate for the bro4ers who are doing business with borrowed

mone$3 A(ailabilit$ of cheap funds encourages speculation and rise in the price of shares3

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Ta5 stu+tue2 E(er$ $ear in March5 the business communit$ eagerl$ awaits the

%o(ernment>s announcement regarding the ta6 polic$3 1oncessions and incenti(es gi(en

to a certain industr$ encourage in(estment in that particular industr$3 Ta6 relief>s gi(en to

sa(ings encourage sa(ings3 The t$pe of ta6 e6emption has impact on the profitabilit$ of 

the industries3

Infastu+tue fa+ilities2 "nfrastructure facilities are essential for the growth of industrial

and agricultural sector3 A wide networ4 of communication s$stem is a must for the

growth of the econom$3 Regular suppl$ of power without an$ power cut would

 boost the production3 an4ing and financial sectors also should be sound enough to

 pro(ide adequate support to the industr$3 %ood infrastructure facilities affect the stoc4 

mar4et fa(orabl$3

6. I!D$%TR) A!A()%I%

An industr$ is a group of firms that ha(e similar technological structure of production

and produce similar products and "ndustr$ anal$sis is a t$pe of business research that

focuses on the status of an industr$ or an industrial sector &a broad industr$ classification5

li4e BmanufacturingB*3 "rrespecti(e of specific economic situations5 some industries might be e6pected to

 perform better5 and share prices in these industries ma$ not decline as much as in other industries3 This identification of 

economic and industr$ specific factors influencing share prices will help in(estors to identif$ the shares that fit

indi(idual e6pectations

Industy (ife 'y+le2 The industr$ life c$cle theor$ is generall$ attributed to 'ulius

%rodens4$3 The life c$cle of the industr$ is separated into four well defined stages3

•  Pioneering stage: The prospecti(e demand for the product is promising in this

stage and the technolog$ of the product is low3 The demand for the product

attracts man$ producers to produce the particular product3 There would be se(ere

competition and onl$ fittest companies sur(i(e this stage3 The producers tr$ to

de(elop brand name5 differentiate the product and create a product image3 "n this

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situation5 it is difficult to select companies for in(estment because the sur(i(al

rate is un4nown3

•  Rapid growth stage: This stage starts with the appearance of sur(i(ing firms from

the pioneering stage3 The companies that ha(e withstood the competition grow

strongl$ in mar4et share and financial performance3 The technolog$ of the

 production would ha(e impro(ed resulting in low cost of production and good

qualit$ products3 The companies ha(e stable growth rate in this stage and the$

declare di(idend to the shareholders3 "t is ad(isable to in(est in the shares of these

companies3

•  Maturity and stabilization stage: the growth rate tends to moderate and the rate

of growth would be more or less equal to the industrial growth rate or the gross

domestic product growth rate3 S$mptoms of obsolescence ma$ appear in the

technolog$3 To 4eep going5 technological inno(ations in the production process

and products should be introduced3 The in(estors ha(e to closel$ monitor the

e(ents that ta4e place in the maturit$ stage of the industr$3

•  Decline stage:  demand for the particular product and the earnings of the

companies in the industr$ decline3 "t is better to a(oid in(esting in the shares of 

the low growth industr$ e(en in the boom period3 "n(estment in the shares of 

these t$pes of companies leads to erosion of capital3

&o7th of the industy2 The historical performance of the industr$ in terms of growth

and profitabilit$ should be anal$=ed3 The past (ariabilit$ in return and growth in reaction

to macro economic factors pro(ide an insight into the future3

!atue of +o,etition2 #ature of competition is an essential factor that determines the

demand for the particular product5 its profitabilit$ and the price of the concerned

compan$ scrips3 The companies7 abilit$ to withstand the local as well as the multinational

competition counts much3 "f too man$ firms are present in the organi=ed sector5 the

competition would be se(ere3 The competition would lead to a decline in the price of the

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 product3 The in(estor before in(esting in the scrip of a compan$ should anal$=e the

mar4et share of the particular compan$7s product and should compare it with the top fi(e

companies3

%8"T analysis2 S<OT anal$sis represents the strength5 wea4ness5 opportunit$ and

threat for an industr$3 E(er$ in(estor should carr$ out a S<OT anal$sis for the chosen

industr$3 Ta4e for instance5 increase in demand for the industr$>s product becomes its

strength5 presence of numerous pla$ers in the mar4et5 i3e3 competition becomes the threat

to a particular compan$3 The progress in R C D in that industr$ is an opportunit$ and

entr$ of multinationals in the industr$ is a threat3 "n this wa$ the factors are to be

arranged and anal$=ed3

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.3 '"PA!) A!A()%I%

"n the compan$ anal$sis the in(estor assimilates the se(eral bits of information related to

the compan$ and e(aluates the present and future (alues of the stoc43 The ris4 and return

associated with the purchase of the stoc4 is anal$=ed to ta4e better in(estment decisions3

The present and future (alues are affected b$ a number of factors3

'o,etitie ed4e of the +o,any2 Major industries in "ndia are composed of hundreds

of indi(idual companies3 Though the number of companies is large5 onl$ few companies

control the major mar4et share3 The competiti(eness of the compan$ can be studied with

the help of the following8

•  Market share: The mar4et share of the annual sales helps to determine a

compan$>s relati(e competiti(e position within the industr$3 "f the mar4et share is

high5 the compan$ would be able to meet the competition successfull$3 The

companies in the mar4et should be compared with li4e product groups otherwise5

the results will be misleading3

• Growth of sales: The rapid growth in sales would 4eep the shareholder in a better 

 position than one with stagnant growth rate3 "n(estors generall$ prefer si=e and

growth in sales because the larger si=e companies ma$ be able to withstand the

 business c$cle rather than the compan$ of smaller si=e3

•  Stability of sales:  "f a firm has stable sales re(enue5 it will ha(e more stable

earnings3 The fall in the mar4et share indicates the declining trend of compan$5

e(en if the sales are stable3 )ence the stabilit$ of sales should be compared with

its mar4et share and the competitor>s mar4et share3

Eanin4s of the +o,any2 Sales alone do not increase the earnings but the costs and

e6penses of the compan$ also influence the earnings3 Further5 earnings do not alwa$s

increase with increase in sales3 The compan$>s sales might ha(e increased but its earnings

 per share ma$ decline due to rise in costs3 )ence5 the in(estor should not onl$ depend on

the sales5 but should anal$=e the earnings of the compan$3

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#inan+ial analysis2 The best source of financial information about a compan$ is its own

financial statements3 This is a primar$ source of information for e(aluating the

in(estment prospects in the particular compan$>s stoc43 Financial statement anal$sis is

the stud$ of a compan$>s financial statement from (arious (iewpoints3 The statement

gi(es the historical and current information about the compan$>s operations3 )istorical

financial statement helps to predict the future and the current information aids to anal$=e

the present status of the compan$3 The two main statements used in the anal$sis are

alance sheet and 2rofit and :oss Account3

The balance sheet is one of the financial statements that companies prepare e(er$ $ear for 

their shareholders3 "t is li4e a financial snapshot5 the compan$7s financial situation at a

moment in time3 "t is prepared at the $ear end5 listing the compan$7s current assets and

liabilities3 "t helps to stud$ the capital structure of the compan$3 "t is better for the

in(estor to a(oid a compan$ with e6cessi(e debt component in its capital structure3 From

the balance sheet5 liquidit$ position of the compan$ can also be assessed with the

information on current assets and current liabilities3

Ratio analysis2 Ratio is a relationship between two figures e6pressed mathematicall$3

Financial ratios pro(ide numerical relationship between two rele(ant financial data3

Financial ratios are calculated from the balance sheet and profit and loss account3 The

relationship can be either e6pressed as a percent or as a quotient3 Ratios summari=e the

data for eas$ understanding5 comparison and interpretations3

Ratios for in(estment purposes can be classified into profitabilit$ ratios5 turno(er ratios5

and le(erage ratios3 2rofitabilit$ ratios are the most popular ratios since in(estors prefer 

to measure the present profit performance and use this information to forecast the future

strength of the compan$3 The most often used profitabilit$ ratios are return on assets5

 price earnings multiplier5 price to boo4 (alue5 price to cash flow5 and price to sales5

di(idend $ield5 return on equit$5 present (alue of cash flows5 and profit margins3

a Retun on Assets /R"A

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ROA is computed as the product of the net profit margin and the total asset turno(er 

ratios3

R"A 9 /!et Pofit:Total in+o,e 5 /Total in+o,e:Total Assets

This ratio indicates the firm7s strategic success3 1ompanies can ha(e one of two

strategies cost leadership5 or product differentiation3 ROA should be rising or 4eeping

 pace with the compan$7s competitors if the compan$ is successfull$ pursuing either of 

these strategies5 but how ROA rises will depend on the compan$7s strateg$3 ROA should

rise with a successful cost leadership strateg$ because the compan$>s increasing

operating efficienc$3 An e6ample is an increasing5 total asset5 turno(er ratio as the

compan$ e6pands into new mar4ets5 increasing its mar4et share3 The compan$ ma$

achie(e leadership b$ using its assets more efficientl$3 <ith a successful product

differentiation strateg$5 ROA will rise because of a rising profit margin3

b Retun on Inest,ent /R"I

RO" is the return on capital in(ested in business5 i3e35 if an in(estment Rs - crore in men5

machines5 land and material is made to generate Rs3 +0 la4hs of net profit5 then the RO" is

+03 The computation of return on in(estment is as follows

Retun on Inest,ent /R"I 9 /!et ofit:Equity inest,ents 5 100

As this ratio re(eals how well the resources of a firm are being used5 higher the ratio5

 better are the results3 The return on shareholder>s in(estment should be compared with

the return of other similar firms in the same industr$3 The inert9firm comparison of this

ratio determines whether the in(estments in the firm are attracti(e or not as the in(estors

would li4e to in(est onl$ where the return is higher3

+ Retun on Equity

Return on equit$ measures how much an equit$ shareholder7s in(estment is actuall$

earning3 The return on equit$ tells the in(estor how much the in(ested rupee is earning

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from the compan$3 The higher the number5 the better is the performance of the compan$

and suggests the usefulness of the projects the compan$ has in(ested in3

The computation of return on equit$ is as follows

Retun on equity 9 /!et ofit to o7nes:alue of the se+ifi+ o7ne;s

'ontibution to the business 5 100

The ratio is more meaningful to the equit$ shareholders who are in(ested to 4now profits

earned b$ the compan$ and those profits which can be made a(ailable to pa$ di(idend to

them3

d Eanin4s e %hae /EP%*

This ratio determines what the compan$ is earning for e(er$ share3 For man$ in(estors5

earnings are the most important tool3 E2S is calculated b$ di(iding the earnings &net

 profit* b$ the total number of equit$ shares3

The computation of E2S is as follows

Eanin4s e shae 9 !et ofit:!u,be of shaes outstandin4

The E2S is a good measure of profitabilit$ and when compared with E2S of similar other 

companies5 it gi(es a (iew of the comparati(e earnings or earnings power of a firm3 E2S

calculated for a number of $ears indicates whether or not earning power of the compan$

has increased3

e Diidend e %hae /DP%

The e6tent of pa$ment of di(idend to the shareholders is measured in the form of 

di(idend per share3 The di(idend per share gi(es the amount of cash flow from the

compan$ to the owners and is calculated as follows

Diidend e shae 9 Total diidend ay,ent : !u,be of shaes outstandin4

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The pa$ment of di(idend can ha(e se(eral interpretations to the shareholder3 The

distribution of di(idend could be thought of as the distribution of e6cess profitsabnormal

 profits b$ the compan$3 On the other hand5 it could also be negati(el$ interpreted as lac4 

of in(estment opportunities3 "n all5 di(idend pa$out gi(es the e6tent of inflows to the

shareholders from the compan$3

f Diidend Payout Ratio

From the profits of each compan$ a cash flow called di(idend is distributed among its

shareholders3 This is the continuous stream of cash flow to the owners of shares5 apart

from the price differentials &capital gains* in the mar4et3 The return to the shareholders5 in

the form of di(idend5 out of the compan$7s profit is measured through the pa$out ratio3

The pa$out ratio is computed as follows

Payout Ratio 9 /Diidend e shae : Eanin4s e shae < 100

The percentage of pa$out ratio can also be used to compute the percentage of retained

earnings3 The profits a(ailable for distribution are either paid as di(idends or retained

internall$ for business growth opportunities3 )ence5 when di(idends are not declared5 the

entire profit is ploughed bac4 into the business for its future in(estments3

4 Diidend )ield

Di(idend $ield is computed b$ relating the di(idend per share to the mar4et price of the

share3 The mar4et place pro(ides opportunities for the in(estor to bu$ the compan$7s

share at an$ point of time3 The price at which the share has been bought from the mar4et

is the actual cost of the in(estment to the shareholder3 The mar4et price is to be ta4en as

the cum9di(idend price3 Di(idend $ield relates the actual cost to the cash flows recei(ed

from the compan$3 The computation of di(idend $ield is as follows

Diidend yield 9 /Diidend e shae : a=et i+e e shae < 100

)igh di(idend $ield ratios are usuall$ interpreted as under(alued companies in the

mar4et3 The mar4et price is a measure of future discounted (alues5 while the di(idend per 

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share is the present return from the in(estment3 )ence5 a high di(idend $ield implies that

the share has been under priced in the mar4et3 On the other hand a low di(idend $ield

need not be interpreted as o(er(aluation of shares3 A compan$ that does not pa$ out

di(idends will not ha(e a di(idend $ield and the real measure of the mar4et price will be

in terms of earnings per share and not through the di(idend pa$ments3

h Pi+e:Eanin4s Ratio /P:E

The 2E multiplier or the price earnings ratio relates the current mar4et price of the share

to the earnings per share3 This is computed as follows

Pi+e:eanin4s atio 9 'uent ,a=et i+e : Eanin4s e shae

This ratio is calculated to ma4e an estimate of appreciation in the (alue of a share of a

compan$ and is widel$ used b$ in(estors to decide whether or not to bu$ shares in a

 particular compan$3 Man$ in(estors prefer to bu$ the compan$7s shares at a low 2E ratio

since the general interpretation is that the mar4et is under(aluing the share and there will

 be a correction in the mar4et price sooner or later3 A (er$ high 2E ratio on the other hand

implies that the compan$7s shares are o(er(alued and the in(estor can benefit b$ selling

the shares at this high mar4et price3

i Debt-to-Equity Ratio

Debt9Equit$ ratio is used to measure the claims of outsiders and the owners against the

firm>s assets3

Debt-to-equity atio 9 "utsides #unds : %haeholdes #unds

The debt9equit$ ratio is calculated to measure the e6tent to which debt financing has been

used in a business3 "t indicates the proportionate claims of owners and the outsiders

against the firm>s assets3 The purpose is to get an idea of the cushion a(ailable to

outsiders on the liquidation of the firm3

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RE%EAR'> &AP

To start an$ business capital pla$s major role3 1apital can be acquired in two wa$s b$

issuing shares or b$ ta4ing debt from financial institutions or borrowing mone$ from

financial institutions3 The owners of the compan$ ha(e to pa$ regular interest and

 principal amount at the end3

Stoc4 is ownership in a compan$5 with each share of stoc4 representing a tin$ piece of 

ownership3 The more shares $ou own5 the more of the compan$ $ou own3 The more

shares $ou own5 the more di(idends $ou earn when the compan$ ma4es a profit3 "n the

financial world5 ownership is called *Equity.

Ad(antages of selling stoc4

• A compan$ can raise more capital than it could borrow3

• A compan$ does not ha(e to ma4e periodic interest pa$ments to creditors3

• A compan$ does not ha(e to ma4e principal pa$ments

Stoc4shares pla$ a major role in acquiring capital to the business in return in(estors are

 paid di(idends to the shares the$ own3 The more shares $ou own the more di(idends $ou

recei(e3

The role of equit$ anal$sis is to pro(ide information to the mar4et3 An efficient mar4et

relies on information a lac4 of information creates inefficiencies that result in stoc4s

 being misrepresented &o(er or under (alued*3 This is (aluable because it fills information

gaps so that each indi(idual in(estor does not need to anal$=e e(er$ stoc4 thereb$ ma4ing

the mar4ets more efficient3

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"B?E'TI@E% "# T>E %T$D)

The objecti(e of this project is to deepl$ anal$=e our "ndian Automobile "ndustr$ for 

in(estment purpose b$ monitoring the growth rate and performance on the basis of 

historical data3

The main objecti(es of the 2roject stud$ are

• Detailed anal$sis of Automobile industr$ which is gearing towards

international standards

• Anal$=e the impact of qualitati(e factors on industr$>s and compan$>s

 prospects

• 1omparati(e anal$sis of three tough competitors TATA Motors5 Maruti Su=u4i

and Mahindra and Mahindra through fundamental anal$sis3

• Suggesting as to which compan$>s shares would be best for an in(estor to

in(est3

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>)P"T>E%I%

>yothesis 1

), The sample Equit$ of automobile industr$ ma$ not influence the whole industr$5)- The sample Equit$ of automobile industr$ will influence the whole industr$

>yothesis 6

), The ris4 and return of the Equit$ are not considered while in(estors ma4ing

decisions on their in(estment securit$5

)- The ris4 and return of the Equit$ are considered while in(estors ma4ing decisions

on their in(estment

>yothesis 3

The null h$pothesis of the stud$ assumes5

), There is no significant impact of Equit$ anal$sis while in(estor in(esting in a

securit$5

)- There is a significant impact of Equit$ anal$sis while in(estor in(esting in a

securit$53

>yothesis

), The sample Equit$ ma$ not influence the whole industr$5

)- The sample Equit$ will influence the whole industr$

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%'"PE "# T>E %T$D)

The scope of the stud$ is identified after and during the stud$ is conducted3 The

 project is based on tools li4e fundamental anal$sis and ratio anal$sis3 Further5 the

stud$ is based on information of last fi(e $ears3

• The anal$sis is made b$ ta4ing into consideration fi(e companies i3e3 TATA

Motors5 Maruti Su=u4i and Mahindra and Mahindra3

• The scope of the stud$ is limited for a period of fi(e $ears3

• The scope is limited to onl$ the fundamental anal$sis of the chosen stoc4s3

Peiod of the study

The duration of the project is 0da$s

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ET>"D"("&)

Research design or research methodolog$ is the procedure of collecting5 anal$=ing and

interpreting the data to diagnose the problem and react to the opportunit$ in such a wa$ where

the costs can be minimi=ed and the desired le(el of accurac$ can be achie(ed to arri(e at a

 particular conclusion3

The methodolog$ used in the stud$ for the completion of the project and the fulfillment of the

 project objecti(es3

The sample of the stoc4s for the purpose of collecting secondar$ data has been selected on the

 basis of Random Sampling3 The stoc4s are chosen in an unbiased manner and each stoc4 is

chosen independent of the other stoc4s chosen3 The stoc4s are chosen from the automobile

sector3

The sample si=e for the number of stoc4s is ta4en as . for fundamental anal$sis of stoc4s as

fundamental anal$sis is (er$ e6hausti(e and requires detailed stud$3


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