134343865 Equity Research

8/13/2019 134343865 Equity Research

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A REPORT

ON

EQUITY RESEARCH

BY:

CHIRASH

05116603909

AUTHORIZATION

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This is to certify that Mr. Chirash, a student of University School of management

Studies , GGSIPU has completed project work on “Equity Research” under my

guidance and supervision.

The report is sumitted as partial fulfillment of the re!uirement of "#$ Program of

US"S. I certify that this is an original work and has not een copied from any

source.

(Signature of Guide)

Name of Proect !ui"e% &r . Vijita Aggarwal

#ate '

AC$NO%&E#!EMENT

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I owe a great many thanks to a great many people who helped and supported me during the

making of this project. "y deepest thanks to &r . Vijita Aggarwal,

the Guide of the project for guiding and correcting various documents of mine with attention and

care. (e has taken pain to go through the project and make necessary correction as and when

needed.

I would also thank my Institution and my faculty memers without whom this project would

have een a distant reality. I also e)tend my heartfelt thanks to my family and well wishers.

*hirash

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Table of Content Table of Contents....................................................................................................... 4

LIST OF TAL!S.......................................................................................................... "

LIST OF FI#$%!S.........................................................................................................&

!'!C$TIV! S$((A%).................................................................................................*

I+T%O,$CTIO+........................................................................................................... -

I+T%O,$CTIO+ TO STOCS/0.................................................................................. -

I+T%O,$CTIO+ TO STOC (A%!T/0......................................................................

T! (A%!T / ) IT !'ISTS..............................................................................15

I+T%O,$CTIO+ TO STOC !'CA+#!/0................................................................11

%ISS I+VOLV!, I+ STOC (A%!T/0....................................................................12

A+AL)SIS TOOLS/0.................................................................................................12

!6$IT) %!S!A%C / A+ OV!%VI!.......................................................................14

I+V!ST(!+T %ATIO+AL!.......................................................................................14

O7!CTIV! OF T! P%O7!CT/0................................................................................1"

SCOP! OF T! ST$,)/0......................................................................................... 1"

(!TO,OLO#)/0................................................................................................... 1&

LI(ITATIO+S OF T! ST$,)/0................................................................................1&

(AI+ T!'T................................................................................................................ 1*

F$+,A(!+TAL !VAL$ATIO+/0...............................................................................1-

!CO+O(IC A+AL)SIS................................................................................................1-

I+T%O,$CTIO+......................................................................................................1-

S!+S!' / A+ I+,ICATO% OF T! I+,IA+ !CO+O()..............................................25

FII8S I+FLO I+ T! I+,IA+ !CO+O()/0...............................................................22

I(PACT OF $+IO+ $,#!T 2515011 O+ S!+S!'..................................................24

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I+,$ST%) A+AL)SIS.................................................................................................2&

PA%(AC!$TICAL I+,$ST%)................................................................................2&

CO+ST%$CTIO+ I+,$ST%)/0..................................................................................35

T!L!CO( I+,$ST%)/0............................................................................................ 34

CO(PA+) A+AL)SIS................................................................................................. 3-

%ATIO A+AL)SIS....................................................................................................3-

S+APSOT OF T! (A%!T......................................................................................4&

I+T!%P%!TATIO+ OF VA%IO$S PA%A(!T!%S I(PO%TA+T I+ A+AL)SI+# A STOC..4*

A+AL)SIS OF CIPLA/0............................................................................................. "1

A+AL)SIS OF 9arti Airtel /0..................................................................................."2

A+AL)SIS OF ,LF LT, /0........................................................................................ "4

A+AL)SIS OF L:T/0................................................................................................ "&

A+AL)SIS OF 7AIP%AAS ASSOCIAT!S/0..............................................................."*

FI+,I+#S A+, CO+L$SIO+...................................................................................... "

%!F!%!+C!S.............................................................................................................&1

A++!'$%!S.............................................................................................................. &2

!IST O" TAB!ES

1. In;ia8s to<* ;r=g >o?< 2

2. Sna<s9ot of t9e ?ar@et 4-

3. est to< gainers of sense 4

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4. est to< losers of sense "5

". AnalBsis of >i<la ""

&. AnalBsis of 9arti airtel "&

*. AnalBsis of ,Lf lt;. "-

-. AnalBsis of L:T &5

. AnalBsis of jai<ra@as9 asso. &1

!IST O" "I#URES

1. Sense >9art fro? 255&015 24

2. FII inest?ent in In;ian eD=ities 2"

3. Porter8s " for>es ?o;el for in;=strB analBsis 2-

4. (ar@et s9are of <9ar?a >o?<anies 31

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". S9are to #,P bB >onstr=>tion in;=strB0 3"

&. (ar@et s9are of tele>o? >o?<anies 3-

*. ar >9art ;eting t9e C=rrent ratio 41

-. ar >9art ;eting t9e ;ebt eD=itB ratio 42

. ar >9art ;eting t9e in;=strB >oerage ratio 43

15.ar >9art ;eting t9e !IT,A ?argin 44

11.ar >9art ;eting t9e %OC! 4"

12.ar >9art ;eting t9e total asset t=rnoer ratio 4&

13.Pri>e >9art of >i<la ""

14.Pri>e >9art of 9arti airtel "*

1".Pri>e >9art of ,LF lt;. "-

1&.Pri>e >9art of L:T &5

1*.Pri>e >9art of jai<ra@as9 asso. &2

E$ECUTI%E SU&&ARY

Summer Internship Program is an essential component of the "#$ curriculum. It gives

immense opportunity to learn aout the working and culture of the corporate. The project

entitled +!uity -esearch is dedicated to my SIP /010 which is eing accomplished through the

courtesy of Sharekhan 2td.. The main aim of the project is to enhance the analytical skills with

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the help of fundamental analysis and addition of asic and advanced knowledge of finance for

etter understanding of the market for its application in research.

!uity research is done through two analysis namely fundamental and technical analysis. The

analysis in this project is done through fundamental analysis which asically includes economic

analysis, industry analysis and the company analysis. There are two approaches to this, ottom

up and top down. I have adopted the top down approach to perform the study commencing with

economic, industry and company analysis.

The area of research given to me is sense) which is in a group of /. So, I have een assigned 13

companies listed on sense) therey covering 4 sectors. The economic analysis starts with a rief

of world economy statistics and then the Indian economic analysis. $lso, the impact of udget

/010511 is covered in the report. The analysis of 6 sectors was done till interim report and a

more detailed analysis of the remaining 6 sectors, that is, pharmaceutical industry, construction

industry and telecom industry is done now. The company analysis starts with the ratio analysis

which forms one of the most important tools of fundamental analysis used to analy7e the

financial performance of the companies. -atio analysis is carried out with the companies of

telecom sector so that it ecomes easy to understand and e)plain and simultaneously analy7ing

the telecom companies as well. $ comparative analysis is also done against prominent private

market players. 8arious ratio analysis will help to judge the, li!uidity, solvency, profitaility and

overall efficiency of the firm.

Some of the important or key financials of a company are studied and e)plained which are useful

for an investor to invest in a firm. The analysis of some companies is shown at the end with these

parameters.

INTRO'UCTION

INTRO'UCTION TO STOC(S:)

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Stock is a share in the ownership of a company. 'toc( re)rese*ts a c+aim o* the

com)a*y,s assets a*" ear*i*-s. $s you ac!uire more stock, your ownership stake in the

company ecomes greater. 9hether you say shares, e!uity, or stock, it all means the same thing.

The importance of eing a shareholder is that you are entitled to a portion of the company:s

profits and have a claim on assets. Profits are sometimes paid out in the form of dividends. The

more shares you own, the larger the portion of the profits you get. ;our claim on assets is only

relevant if a company goes ankrupt. In case of li!uidation, you<ll receive what<s left after all the

creditors have een paid. The im)orta*ce of stoc( o*ershi) is your c+aim o* assets a*"

ear*i*-s.

$nother e)tremely important feature of stock is its limited liaility, which means that, as an

owner of a stock, you are not personally liale if the company is not ale to pay its dets. =ther

companies such as partnerships are set up so that if the partnership goes ankrupt the creditors

can come after the partners >shareholders? personally and sell off their house, car, furniture, etc.

O*i*- stoc( mea*s that/ *o matter hat/ the ma0imum 1a+ue you ca* +ose is the 1a+ue of

your i*1estme*t. ven if a company of which you are a shareholder goes ankrupt, you can

never lose your personal assets.

INTRO'UCTION TO STOC( &AR(ET:)

The faulous category of financial instruments is, without a dout, one of the greatest tools ever

invented for uilding wealth. Stocks are a part, if not the cornerstone, of nearly any investment

portfolio. 9hen you start on your road to financial freedom, you need to have a solid

understanding of stocks and how they trade on the stock market.

=ver the last few decades, the average person<s interest in the stock market has grown

e)ponentially. 9hat was once a toy of the rich has now turned into the vehicle of choice for

growing wealth. This demand coupled with advances in trading technology has opened up the

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markets so that nowadays nearly anyody can own stocks.

The stock market can e a great source of confusion for many people. The average person

generally falls into one of two categories. The first elieve investing is a form of gamling@ theyare certain that if you invest, you will more than likely end up losing your money. =ften these

fears are driven y the personal e)periences of family memers and friends who suffered similar

fates or lived through the Great &epression. These feelings are not ground in facts and are the

result of personal e)perience. Someone who elieves along this line of thinking simply does not

understand what the stock market is or why it e)ists.

The second category consists of those who know they should invest for the long5run, ut don:t

know where to egin. "any feel like investing is some sort of lack5magic that only a few

people hold the key to. "ore often than not, they leave their financial decisions up to

professionals, and cannot tell you why they own a particular stock or mutual fund. Their

investment style is lind faith or limited to +this stock is going up. 9e should uy it. This group

is in far more danger than the first. They invest like the masses and then wonder why their results

are mediocre >or in some cases, devastating?.

THE &AR(ET : *HY IT E$ISTS+

9hen a company is growing, the iggest hurdle is often raising enough money to e)pand.

=wners generally have two options to overcome this. They can either orrow the money from a

ank or venture capitalist, or sell part of the usiness to investors and use the money to fund

growth. Taking out a loan is common, and very useful ' to a point. #anks will not always lend

money to companies, and over5eager managers may try to orrow too much initially, wrecking

the alance sheet. Aactors such as these often provoke owners of small usinesses to issue stock.

In e)change for giving up a tiny fraction of control, they are given cash to e)pand the usiness.

In addition to money that doesn:t have to e paid ack, +going pulic Bas its called when a

company sells stock in itself for the first timeC, gives the usiness managers and owners a new

tool% instead of paying cash for an ac!uisition, they can use their own stock.

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INTRO'UCTION TO STOC( E$CHAN#E:)

$ stoc( e0cha*-e is an entity which provides DtradingD facilities for stock rokers and traders, to

trade stocks and other securities. Stock e)changes also provide facilities for the issue and

redemption of securities as well as other financial instruments and capital events including the

payment of income and dividends. The securities traded on a stock e)change include%

shares issued y companies, unit trusts, derivatives, pooled investment products and onds.

To e ale to trade a security on a certain stock e)change, it has to e listed there. Usually there

is a central location at least for recordkeeping, ut trade is less and less linked to such a physical

place, as modern markets are electronic networks, which gives them advantages of speed and

cost of transactions. Trade on an e)change is y memers only.

The initial offering of stocks and onds to investors is y definition done in the primary

market and suse!uent trading is done in the secondary market. $ stock e)change is often the

most important component of a stock market. There is usually no compulsion to issue stock via

the stock e)change itself, nor must stock e suse!uently traded on the e)change. Such trading is

said to e off exchange or over5the5counter. This is the usual way that derivatives and onds are

traded. Increasingly, stock e)changes are part of a gloal market for securities.

There are two major stock e)changes in the country. =ne is SESF>#S? and the other is

EIAT;>ES?. #S stands for #omay Stock )change and ES stands for Eational Stock

)change.

The 'e*se0 is an Dinde)D. $n inde) is asically an indicator. It gives you a general idea aout

whether most of the stocks have gone up or most of the stocks have gone down.

The Sense) is an indicator of all the major companies of the #S and Eifty is an indicator of all

the major companies of the ES.

If the Sense) goes up, it means that the prices of the stocks of most of the major companies on

the #S have gone up. If the Sense) goes down, this tells you that the stock price of most of the

major stocks on the #S have gone down.

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ust like the Sense) represents the top stocks of the #S, the Eifty represents the top stocks of

the ES.

RIS(S IN%O!%E' IN STOC( &AR(ET:)

It must e emphasi7ed that there are no guarantees when it comes to individual stocks. Some

companies pay out dividends, ut many others do not. $nd there is no oligation to pay out

dividends even for those firms that have traditionally given them. 9ithout dividends, an investor

can make money on a stock only through its appreciation in the open market. =n the downside,

any stock may go ankrupt, in which case your investment is worth nothing.

$lthough risk might sound all negative, there is also a right side. Taking on greater risk

demands a greater return on your investment. This is the reason why stocks have historically

outperformed other investments such as onds or savings accounts. =ver the long term, an

investment in stocks has historically had an average return of around 1051/H.

To make money in the stock market, one must assume high risks.

ANA!YSIS TOO!S:)

There are two types of the analysis used y institutional and individual traders. #oth

fu*"ame*ta+ and tech*ica+ analysis serve the same purpose to help to define possile future

stock trend, yet, at the same time they are completely different in the way they analy7e stocks.

#oth fundamental and technical analyses are important and depending on the trading style one or

another could e applied.

2UN#AMENTA& ANA&3'I'45

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Aundamental analysis is the process of looking at a usiness at the asic or fundamental financial

level. This type of analysis e)amines key ratios of a usiness to determine its financial health and

gives you an idea of the value its stock. "any investors use fundamental analysis alone or in

comination with other tools to evaluate stocks for investment purposes. The goal is to determine

the current worth and, more importantly, how the market values the stock.

TECHNICA& ANA&3'I'45

Technical analysis looks at past performance of an analy7ed stock in order to find logical

patterns that could e applied to the current situation on the market and reveal possile future

stock trend. $s a rule this type of the analysis is ased on the analysis of the volume and price

charts, data, developing various technical indicators which. In the age of the computeri7ationmany of the traders are choosing this type of the analysis mainly ecause of the availaility and

fast results.

#y comparing technical and fundamental analysis there is no straight answer which one of them

is etter. (owever taking into account different traders we may say that%

• 2or i*tra"ay tra"ers4 if a trader intends to make 153 trades a day, most likely, they do

not care aout fundamental analysis at all. It does not matter to intraday traders what isgoing to happen to the company over the month, is it on the edge of filing ankruptcy or

it is strong and growing. $ll they are interesting in is how volatile and how li!uid stock is

and where the price of the stock is going to e in 10560 minutes. These traders rely solely

on technical analysis.

• 2or 'hort5Term Tra"ers4 The same as intraday traders this type of trading does not

assume holding position >own stocks? for a prolonged period of time. 15/ trades a week

and even /56 trades a month is still a small timeframe to e othered y comple)fundamental analysis.

• 2or Mi"5Term Tra"ers4 #y going into /56 trades a year a traders may start to e

interesting in some elements of the fundamental analysis. #y holding a stock for more

than 4 month in your portfolio you suppose to know at least a little it aout the

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company. ;ou still may use technical analysis, yet some company research could e

recommended for this type of traders.

• 2or &o*-5term Tra"ers4 If you intend to hold the stock of the company in your

portfolio for a several years it ecomes essential to consult fundamental analysis. Thosewho trade inde)es still may use some elements of technical analysis, yet, when it comes

to stocks you have to e sure it is not roken when you are willing to sell it and has at

least the same value so you do not loose.

EQUITY RESEARCH : AN O%ER%IE*

Information is the plank on which financial markets operate. Traders with etter information and

forecasting aility will have an edge in the market place. Thus, there is a need for e!uity research

and sophisticated financial modeling.

!uity research is the pulication y analysts of reports, notes, and emails that offer an

investment recommendation on the !uoted stock of a company >typically uy, sell, or hold?. The

recommendation is supported y an investment case, financial forecasts, and a valuation. -eports

vary enormously, from short updates of a page or less to sustantial documents that analy7e

whole industries and companies in great detail.

The role of research is to provide information to the market. $n efficient market relies on

information. $ lack of information creates inefficiencies that result in stocks eing

misrepresented >over or under valued?. $nalysts use their e)pertise and spend a lot of time

analy7ing a stock, its industry and peer group to provide earnings and valuation estimates.

-esearch is valuale ecause it fills information gaps so that each individual investor does not

need to analy7e every stock. This division of laor makes the market more efficient.

IN%EST&ENT RATIONA!E

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ach investment alternative has its own strengths and weaknesses. Some options seek to achieve

superior returns >like e!uity?, ut with corresponding higher risk. =ther provide safety >like PPA?

ut at the e)pense of li!uidity and growth. =ther options such as A&s offer safety and li!uidity,

ut at the cost of return. "utual funds seek to comine the advantages of investing in arch of

these alternatives while dispensing with the shortcomings.

Indian stock market is semi5efficient y nature and, is considered as one of the most respected

stock markets, where information is !uickly and widely disseminated, therey allowing each

security:s price to adjust rapidly in an uniased manner to new information so that, it reflects the

nearest investment value. $nd mainly after the introduction of electronic trading system, the

information flow has ecome much faster. #ut sometimes, in developing countries like India,

sentiments play major role in price movements, or say, fluctuations, where investors find it

difficult to predict the future with certainty. Some of the events affect economy as a whole, while

some events are sector specific. ven in one particular sector, some companies or major market

player are more sensitive to the event. So, the new investors taking e)posure in the market

should e well aware aout the ma)imum potential loss, i.e. 8alue at risk.

OB,ECTI%E O" THE PRO,ECT:)

The ojective of the project is to pick up 13 companies which are listed on the #omay Stock

)change and conduct a research on their securities, the organi7ation and operation of their

markets.

In the roadest terms, ojective is to develop, and thereafter communicate to investors, insights

regarding the value, risk, and volatility of a covered security, and thus assist investors to decide

whether to uy, hold, sell, sell short or simply avoid the security.

SCOPE O" THE STU'Y:)

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!uity research forms an integral part of the share trading e)perience. !uity research decides

the stance one would take in the share trading industry.

Aorecasting scrip performance re!uires much more characteristics and skills than just advance

arithmetical aility. It re!uires split5hair analysis of the market. To do so one also needs to have

e)cellent understanding of the market.

Supported y valid, fact5ased and reliale research inputs and pulished results, the research

picks out stocks, analy7es its future scope and give a timely recommendation.

&ETHO'O!O#Y:)

The data will e collected from the secondary sources such as company:s annual reports,

research reports, wesites, news articles etc. Time hori7on from /0050J to /00K510 will e

taken into account for analysis.

There are various methods of research analysis like -atio $nalysis, *$P" "odel, &iscounted

*ash Alows >&*A?, PL ratio, PS estimation, S9=T analysis, conomic $nalysis, Industry

$nalysis which would e used.

!I&ITATIONS O" THE STU'Y:)

• !uity research is done y highly e)perienced professionals. Therefore it re!uires

a very deep and thorough knowledge of the suject.

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Growth -ate of Industrial Production% 3H

G&P #y Sector% Services5 4OH Industry5 6/H $griculture5 OH

G&P Per *apita >PPP?% NK,O

Population% 4.43 illion

The Poor >Income elow N/ per day?% 6./3 illion >appro)imately 30H?

"illionaires% K million >appro)imately 0.13H?

2aor Aorce% 6.16 illion

)ports% N16.J trillion

Imports% N16.J1 trillion

Inflation -ate 5 &eveloped *ountries% 1H 5 OH

Inflation -ate 5 &eveloping *ountries% 3H 5 /0H

Unemployment 5 &eveloped *ountries% OH 5 1/H

Unemployment Underemployment 5 &eveloping *ountries% /0H 5 O0H

IN'IA ECONO&IC ANA!YSIS

India economic analysis provides various inputs on economic condition of this south5east $sian

country. It can e done oth at a microeconomic as well as a macroeconomic level. India

economic analysis could also e descried as eing an e)planation of various economic

phenomena going on in this country.

-ecent macroeconomic developments in India%

In $pril /00K, industrial sector in India had recorded a growth of percent. (owever, this figure

is lesser than 11 percent development, which had een achieved in $pril /00J. "uch of this

critical condition could e attriuted to an increase in prices of oil. "easures that have een

taken y -eserve #ank of India, like upward revision of repo rate and *--, have also

contriuted to decrease in industrial production.

"anufacturing and electric sector have suffered as well in recent times. Their growth rates have

come down too. Aor manufacturing sector it was .3 percent and for electricity sector, rate of

development stood at 1.O percent in $pril /00J. This rate is significantly low when compared to

statistics of $pril /00, when rates of development for manufacturing and electricity were 1/.O

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percent and J. percent respectively.

In case of manufacturing sector much of this slump could e attriuted to increase in input costs

like e)penses of oil, raw materials, rates of interest and prices of goods and services. "ining

sector has een comparatively etter off as it has managed to grow at a rate of J percent in $pril

/00K compared to /.4 percent that was achieved in $pril /00J.

In core infrastructural industries, there has een deceleration as well, ut it is still etter off

compared to non infrastructural industries in India. Growth in $pril /00J has een around 6.4

percent, which is less than 3.K percent achieved in $pril /00. Industries like crude oil

production, electricity and petroleum refinery have een performing elow e)pectations ut coal,

finished steel and cement have performed etter than $pril /00.

SENSE$ : AN IN'ICATOR O" THE IN'IAN ECONO&Y

Sense) is the u77word today that governs the activities of the investors in India. 9ith

metamorphosis witnessed in all sectors and the country turning into a fast developing economy

there is no dearth of investors. ven overseas investors are attracted towards sense) India and it

has not een a decade that the stock market gained great momentum. The #S inde) rose to such

an escalating level that thousands of shares were eing traded every minute and more investors

eing ready to invest. #ut the sudden downslide in the year /00J left all in panic ' reminding

one of the Msnake ladder: game. "any turned ankrupt, a numer of companies closed down,

and financial chaos were the order of the day for over si) months at a stretch. The downslide

affected the #S sense), lowering the stock prices and investors were in a dilemma whether to

take the risk or not. #ut now market conditions have changed for the etter@ the #S inde), over

the last few months, has een displaying a rising figure. $t present, the sense) inde) closed at

14JOO./0 up from the elow510,000 figure.

The gloal recession period is aout to get over the severely affected anks e!uities are

slowly reverting ack to their previous shape. $ll the investors trading in #S stocks will feel

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glad to know that #omay Stock )change >#S? is also recovering from the massive effect that

economic slowdown has left on it. #S is one of the $sia:s oldest stock e)changes operating the

stocks of a lot of companies from different sectors.

India is e)panding at a rapid rate after *hina, ut the upward trend is one of the steadiest

compared to the other foreign markets. India eing diverse in many sectors will see more upside

due to the strong demand in information technology. The other sectors for future growth in India

are energy, oil, and commodities. The Sense) has had its way will continue to grow. India:s

economy is ooming and the high return will reflect on its stock market.

The increase in sense) means lot of people who have invested and also persons invested in the

mutual funds will e enefited .so the earning per capita is increasing , companies will grow sotheir ranches will too so employment the foreign investors will also invest and we will e

enefited.

SESF is one of the major parameter y which growth of the indian companies and thus its

impact on economy can e found out. Increase in Sense) means that companies are improving,

thus unemployment will e decreased and also Income level of the people will also e leveled

up. Thus it will definitely have a positive impact on the conomy which will have a positive

flow or the positive impact on the country

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Sense) chart from /004510

"II-S IN"!O* IN THE IN'IAN ECONO&Y:)

Aoreign institutional investors >AIIs?, one of the largest categories of investors in the local e!uity

markets, have ought Indian stocks worth N4.4O illion >-s/K,OJ1 crore? in the year5to5date, the

highest in the first four months of a year since they were allowed entry into the country in 1KK/.

The money that AIIs have pumped in eats the previous record of NO./1 illion that came in

during anuary5$pril in /00O, when the markets were in the middle of a ull rally, according to

data released y the markets regulator, the Securities and )change #oard of India >Sei?.

India:s industrial production grew at 13.1H in Aeruary over a year ago, and is seen at around

the same level in "arch. 9ith company earnings growing at doule5digit pace, the economy is

forecast to grow at J.JH in /010, according to the International "onetary Aund.

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(owever, others are not so optimistic and said that risk appetite might wane ecause of the

prolems surrounding Greece and some other uropean economies such as Spain and Portugal.

To e sure, a slowing of foreign inflows may help alleviate the concerns of policymakers worried

aout inflation that:s close to doule5digit levels, and the rupee:s appreciation, which makes

Indian e)ports less competitive. The rupee has gained around 3H against the dollar since the start

of the year.

!uity markets around the world took a tumle recently, after credit rating agency Standard and

Poor:s cut the det rating of Greece to junk status on Tuesday and downgraded Spain and

Portugal. 9hile the US: &ow ones Industrial $verage fell 1.3H in the week till 60 $pril, the

UQ:s ATS inde) shed 6.OKH. merging markets were hit too, with the local enchmark, the

Sense), losing 1H over the week.

The increase in AII inflows, however, hasn:t oosted the local markets much. The Sense) has

gained only 0.3OH this year and the roader #S 300 inde) /.K6H. Part of this is e)plained y

the fact that local mutual funds have sold shares worth -s,3/K crore in the same period. The

Sei data also includes fund flows to the primary market. So far, this year, /J firms have raised

money worth -s10,000 crore from new share sales.

Page | 23



I&PACT O" UNION BU'#ET .010)11 ON SENSE$

The enchmark Sense) saluted Union #udget /010 unveiled y Ainance "inister Prana

"ukherjee and rallied over O00 points during the same day. )perts say it was a effect of short

covering and positive reaction to udget.

The Eifty closed aove the OK00 mark ut the sell5off and profit ooking in IT* on hike in

e)cise, #(2, Tata Power, T*S, Infosys and $## erased more than 30H gains from day<s high.

ven heavyweights came off their day<s high on profit ooking at higher levels. It seemed that

the markets discouted the udget.

Prana "ukherjee in his second udget announced some positives like gradual reduction in

fiscal deficit, cut in surcharge, more allocation for infrastructure development, increase in A;11

divestment target, increase in personal ta) sla to -s J lakh etc, which all these pushed

the sense) aove. (owever, there were some negatives like hike in e)cise duties etc.

Page | 24

Inde) *losing8alue

*hg >H?

$UT= ,10.KK O.O

"T$2 14,O01.3/ /.3J#$EQF K,J/J.4J /./4

P($-"$ O,K1/.KJ 1.33

"I&*$P 4,6K.J/ 1.O

-$2T; 6,/64.4K 1./4

=I2G$S K,3K4./O 1.0J

S"$22*$P J,04.O0 1.0J

*$P G==&s 16,OO.J4 1.04

P=9- /,K41.34 0./4

T*k 6,1K./1 0.06

IT 3,16.KK 50./K

A"*G /,44/.03 5/./3



Positive gloal cues also helped the markets. uropean markets were trading 1H higher and US

inde) futures were marginally in green. $sian markets also recovered in late trade@ (ang Seng

was up 1H and Qospi up 0.O3H. Eikkei, Straits Times and Taiwan were marginally in green

while Shanghai fell 0./JH.

(owever, the markets shrugged off less5than5e)pected gross domestic product >G&P? data. The

R6 G&P came in at 4H as against .KH in the previous !uarter. Aor the period of nine5month

ended &ecemer /00K, G&P growth stood at 4.H versus .1H on year5on5year asis. This was

despite negative growth in agriculture.

Page | 2"



IN'USTRY ANA!YSIS

PHAR&ACEUTICA! IN'USTRY

This diagram provides a summary positional analysis of the pharmaceutical industry using

Porter:s Aive Aorces model %

Page | 2&



Aigure% Porter:s Aive Aorces "odel for Industry $nalysis

• #arrier to entry% (igh >Pharmaceuticals?. *ost of -& and patent limitations

• Industry *ompetition% (igh. $dvantages gained y first mover advantage >patents?

• Suppliers% supplier power is low

• #uyers% uyer power is low

• Sustitutes% low >with patents? medium >after patent e)piry?

=verall, the pharmaceutical industry shows an upward trend in its core markets. The industry

remains highly valued, has a favourale market position with strong financial make5up and

strong earnings growth. Its future potential demand trend is positive and despite increased

competition the industry still shows a continuing upward growth momentum. Aorecast of the

leading 14 pharmaceutical companies for /001 to /00K suggests that comined sales will grow at

a minimum rate of 3./ percent ased on the potential of their product pipeline.

*ipla 2aoratories continues to e the largest pharmaceutical company in the domestic market.

*ipla has topped the =-G5I"S rankings for the month of Eovemer with a market share of 3.O/

per cent and sales of -s 1O4.6/ crore >-s 1.O46 million?, edging out -ana)y which stood at

second position with 3.0K per cent market share and -s 16.OK crore >-s 1.6O million? sales.

Page | 2*



In =ctoer, *ipla topped with -s 13/.0O crore >-s 1.3/0 illion? sales and a market share of 3./6

per cent, ahead of -ana)y, which garnered -s 1OJ.O0 crore >-s 1.OJO million? sales and 3.11

per cent market share, said sources.

*ipla overtook -ana)y and Gla)oSmithQline India to ecome the largest pharmaceuticalcompany in the domestic market for the first time in "ay /00.

I*"ia,s To) 6 #ru- Cos

Ra*( Com)a*y

1 *ipla

/ -ana)y

6 Gla)oSmithQline

O ydus *adila

3 $lkem 2aoratories

4 Sun Pharma

Eicholas Piramal

9hile GSQ has maintained its numer three position in Eovemer, ydus *adila >fourth?,

$lkem 2aoratories >fifth? and Sun Pharma >si)th? have moved one rank up from =ctoer.

Eicholas Piramal, which faced raw material shortages for its largest selling codiene ased

formulations, like Phensydyl, in recent months, slipped three positions to numer seven in

Eovemer.

=-G5I"S, the largest market intelligence company in India focusing on the healthcare sector,

tracks sales of Indian pharmas on a monthly asis, through over 6,000 stockists and 4,000

doctors.

Indian companies are increasing their share in the domestic market mainly due to increased

numer of high value new introductions, though the numer of new introductions has reduced

recently.

Page | 2-



-ana)y<s growth has een largely driven y new introductions such as 8oli), an anti5diaetes

drug launched recently, =frama)5Aorte and anti5asthmatic drug Synasma, which it in5licensed

from urodrug 2aoratories.

-ana)y<s antiiotic "o) >amo)yllin?, which was not among the top ten rands a year ago, hasgrown to ecome the fourth largest rand in the domestic market with monthly sales at -s K.J

crore >-s KJ million? in Eovemer, sources said.

*ipla<s growth was powered y positive growth in their e)isting portfolio, especially its

respiratory products.

(owever, GSQ has lost market share mainly in its main portfolios such as anti5 infectives,

dermatologicals and pain management drugs which grew slower than the market for these

products.

$E3 2IN#IIN!'45

Page | 2



The Indian pharmaceutical market was valued at N,O6m in /00J, an increase of O.0H over

/00. #usiness Insights anticipates that Indian pharmaceutical market will grow at a faster pace

than the gloal pharmaceutical market, appro)imately at a *$G- of 16./H during /00K51O to

reach a total value of N13,OK0m in /01O.

India has emerged as a key destination for gloal pharmaceutical companies due to its high

growth prospects led y ageing population, changing disease profile, and improving patent

regime and socio5economic conditions.

The Indian pharmaceutical market is highly competitive and fragmented with the top 10 players

accounting for 64.1H of the total -( sales in /00J.

CONC&U'ION45

The Pharmaceutical industry has a lot of yet untapped potential and it will e interesting to see

how the industry matures over the long term. Undoutedly, the long history and gloal e)pertise

of firms like cipla, GSQ and rana)y will stand them in good stated to create and enefit from

emerging gloal opportunities. Eotwithstanding its strengths, complacency must e guarded

against ecause smaller, agile and innovative firms are on the prowl and all it takes for the small

upstarts is a superdrug that can change the entire face of the industry. 9e:ve seen it in happen

in the Information *ommunications industry, for all we know pharmaceuticals may just e

ne)t.

CONSTRUCTION IN'USTRY:)

India is on the verge of witnessing a sustained investment in infrastructure uild up. 9ith

construction component accounting for O/H of the total investment in infrastructure, the

construction industry has een witness to a strong growth wave powered y large spends in

Page | 35



housing, road, ports, water supply and airports development. The construction sector has grown

at a *$G- of 14.3H during the last seven years and now accounts for 4.KH of India:s G&P

compared to 3.H in A;00. The Planning *ommission of India has proposed an investment of

around USN 300 n in the leventh five5year plan >/005/01/?, which is nearly /.6 times more

than the previous five5year plan.

• Arom a policy perspective, there has een a growing consensus that

a private5pulic partnership is re!uired to remove difficulties

concerning the development of infrastructure in the country. &uring

the tenth five5year plan >/00/50?, the share of private players in

the total investment was 1JH, which has increased to 60H during

the eleventh five5year plan. The alance will e orne y the pulic

sector.

• • The real estate industry comprising of construction and

development of properties has grown from family ased entities

with focus on single products and having one market presence into

corporate entities with multi5city presence having differentiated

products. The industry has witnessed considerale shift from

traditional financing methods and limited det support to an era of

structured finance, private e!uity and pulic offering.

• The construction sector is a major employment driver, eing the

second largest employer in the country, ne)t only to agriculture.

This is ecause of the chain of ackward and forward linkages that

the sector has with other sectors of the economy. $out /30

ancillary industries such as cement, steel, rick, timer and uilding

material are dependent on the construction industry. $ unit increase

in e)penditure in this sector has a multiplier effect and the capacity

to generate income as high as five times.

$E3 POINT'45

Page | 31



'u))+y Past /56 years have seen a sustantial increase in the

numer of contractors and uilders, especially in the

housing and road construction segment.

#ema*" &emand e)ceeds supply y a large margin. &emand

for !uality infrastructure construction is mainly

emanating from the housing, transportation and uran

development segments.

7arriers to e*try 2ow for road and housing construction. (owever,

high working capital re!uirements can create growth

prolems for companies with weak financial muscle.

7ar-ai*i*-

)oer of

su))+iers

2ow. &ue to the rapid increase in the numer of

contractors and construction service providers,

margins have een stagnant despite strong growth in

volumes.

7ar-ai*i*-

)oer of

customers

2ow. The country still lacks ade!uate infrastructure

facilities and citi7ens have to pay for using pulic

services.

Com)etitio* 8ery high across segments like road construction,

housing and uran infrastructure development.

-elatively less in airport and port development.

'HARE TO !#P45

The Indian construction industry has een playing a vital role in overalleconomic development, as its contriution to G&P at current market

prices has gone up from 3.6H in A;0/ to around .JH during A;0J. In

fact, during A;0/5A;0J, the sector grew at *$G- of /0.6H.

Page | 32



*=E*2USI=E%

-eal estate investments account for aout 40H of the total construction

investments. &emand5supply gap for residential housing, favourale

demographics, rising affordaility levels, availaility of financing

options as well as fiscal enefits availale on availing of home loan are

the key drivers supporting the demand for residential construction. In

addition to this, demand for office space from ITL#P= segment is

e)pected to continue due to emergence of India as a preferred

outsourcing destination. $lso, oom in organi7ed retail is e)pected to

result in huge demand for real estate construction. $ccording to industry

estimates, the Indian real estate industry is e)pected to grow at a

compounded rate of 66H etween A;03 to A;10, mainly driven y the

residential segment.

Page | 33



TE!ECO& IN'USTRY:)

The Indian telecommunications industry is one of the fastest growing in the world and India is

projected to ecome the second largest telecom market gloally y /010.India added 116./4

million new customers in /00J, the largest gloally. The country:s cellular ase witnessed close

to 30 per cent growth in /00J, with an average K.3 million customers added every month.

$ccording to the Telecom -egulatory $uthority of India >T-$I?, appro)imately 1O./3 million

telephone connections, including wireline and wireless, were added during uly /00K, taking the

total numer of telecom suscrier ase at the end of uly /00K to OK.0 million from O4O.J/

million a month efore.

$ccording to #usiness "onitor International, India is currently adding J510 million moile

suscriers every month. It is estimated that y mid /01/, around half the country<s population

will own a moile phone. This would translate into 41/ million moile suscriers, accounting

for a tele5density of around 31 per cent y /01/. It is projected that the industry will generate

revenues worth USN O6 illion in /0010511.

"oreover, according to a study conducted y Eokia, the communications sector is e)pected toemerge as the single largest component of the country:s G&P with 13.O per cent y /01O. The

Indian e!uipment market is estimated at USN /O illion in A;0K.

G-=9T(

$ccording to a Arost Sullivan industry analyst, y /01/, fi)ed line revenues are e)pected to

touch USN 1/./ illion while moile revenues will reach USN 6K.J illion in India.

India has ecome the second country in the world to have more than 100 million *&"$5ased

>code division multiple access? moile phone suscriers after the US, which has 13 million

*&"$ users.

-I8$2-; $"=EG FISTIEG *="PTIT=-S

Page | 34



*ompetition in the Indian telecommunications industry is concentrated in the moile segment,

where there are up to si) operators in some circles. &espite intense competition, the rapid growth

of the market has allowed these players to e)pand their suscrier ases even as they lose market

share.

There are three types of players in telecom services%

• State owned companies >#SE2 and "TE2?.

• Private Indian owned companies >-eliance Infocomm, Tata Teleservices.

• Aoreign invested companies >8odafone, #harti Tele58entures, Idea *ellular, Spice

*ommunications?.

Qey companies are%

7'N&4

• Incument service provider and world:s th largest telecommunication company, state

owned.

• =perates asic, cellular >GS" and *&"$? moile, Internet and long distance services.

• =perates in /1 circles>e)cept &elhi and "umai?

MTN&4

• State owned

• =perates in two circles &elhi and "umai

• =perates asic, cellular >GS" and *&"$? moile, Internet and long distance services

7HARTI AIRTE&4

• 2eads the moile segment in the country

• =perates in 1 circles.

RE&IANCE COMMUNICATION'4

• =ffers moile and fi)ed line telephony including roadand, national and international

long distance services, data services and a wide range of value added services and

applications, new entrant in GS".

Page | 3"



• Pan India presence

TATA TE&E'ER8ICE'4

• =ffers moile and fi)ed line telephony including roadand, national and international

long distance services, data services and a wide range of value added services and

applications, new entrant in GS".

• Pan India presence.

I#EA CE&&U&AR4

• =ffers moile, national and international long distance services, data services and a wide

range of value added services and applications, uses GS" technology.

• Pan India presence

*ompetition has intensified with the entry of new cellular players in select circles. -educing

tariffs will hurt the new entrants as they will e unale to recover their high capital investments.

The 9ireless Industry crossed 6K1million suscriers mark at the end of the financial year /00J5

0K. The total suscrier ase of 6K1.4 million comprise of /K./4 >3.JJH? million GS" and

KO.30 >/O.1/H? million of *&"$ suscriers. The market share of various service providers is

depicted in the figure%

Page | 3&



"/2e 1: &a2et S4a2e of */2ele Oe2ato2 /n 78 a on 31t &a24 .009

It is clear that no service provider has a major share and there is intense rivalry among the

e)isting players in the market. Thus competitive rivalry is due to%

• -ush of new entrants

• Swift technology osolescence due to new product innovations

• "argin pressures due to fierce competition

• (igh e)it arriers due to speciali7ed instruments making it a risky usiness.

Thus companies have to change their strategies, need to provide good services and penetrate the

market with low prices to survive in the cut throat competition.

CONC&U'ION45

Telecom stocks have undergone major value erosion on the ourses after the tariff war started in

late Septemer last year. The scrip of sector leader #harti $irtel has fallen y 64H since =ctoer

1, /00K. The market capitali7ation of -eliance *ommunications >-*="?, the second5largest ,

has nearly halved, while that of Idea *ellular has fallen y /6H during the same period.

Aurther, the customer loyalty has een reduced due to the entry of large numers of players into

the market. Govt. policies stiff competition has made the growth of this sector very slow.

Though there is still hope that the sectors will revive its full potential, it is etter to invest in

other sectors if it is not a long term investment.

Page | 3*



CO&PANY ANA!YSIS

*ompany analysis commences from ratio analysis which is e)plained through the telecom

companies. $ll the ratios, their interpretations, and the rationale have een e)plained through the

telecom companies which simultaneously analy7es these companies as well.

RATIO ANA!YSIS

-atio analysis tool is used to analy7e the financial performance of the companies. Its

performance is also compared against prominent private market players like, #harti

$irtel, -eliance *ommunications, and Idea *ellular for /00K. 8arious ratio analysis will

help to judge the, li!uidity, solvency, profitaility and overall efficiency of the firm.

CURRENT RATIO

The *urrent -atio formula is%

The ratio is mainly used to give an idea of the company<s aility to pay ack its short5

term liailities >det and payales? with its short5term assets

>cash, inventory, receivales?. The higher the current ratio, the more capale the

company is of paying its oligations

Page | 3-



$ ratio

under 1

suggests

that the

company would e unale to pay off its oligations if they came due at that point.

Ratio*a+e4 The higher the current ratio, the larger is the amount of rupees availale per rupee of

current liaility, the more is the firm:s aility to meet current oligations and greater is the safety

of firms of short term creditors. The need to safety margin arises from the inevitale unevenness

in the flow of funds. The limitation of current ratio arises from the fact that it is quantitative

rather than qualitative.

I*ter)retatio*4 -eliance communication has /./ rupees to meet every one rupee of current

liaility, thus having sufficient safety margin ,and is good in short term li!uidity. #harti $irtel

has low short term li!uidity .*urrent ratio of Idea cellular is appropriate as it is not too high and

has a right alance. Since the companies are all service oriented, they do not have much

inventories and hence the li!uid ratios are almost similar to the current ratios calculated aove

#E7T' TO E9UIT3 RATIO4

It is a measure of a company<s financial leverage.

#e:t5Equity ratio ; &o*- term "e:t<'hareho+"er=s Equity

Page | 3

http://www.businessdictionary.com/definition/measure.html

http://www.investorwords.com/1952/financial_leverage.html

http://www.investorwords.com/1952/financial_leverage.html

http://www.businessdictionary.com/definition/measure.html



The relationship etween orrowed funds and owners capital is a popular measure of the longterm financial solvency of the company.

"/2e .: 'ebt E/t; Rat/o

Ratio*a+e4 if the ratio is greater than 1, the majority of assets are financed through det. If it is

smaller than 1, assets are primarily financed through e!uity. Aor instance the det e!uity ratio is

1%/,it implies that for every rupee of outside liaility ,the firm has / rupees .If the &L ratio is

high ,the owners are putting up relatively less money of their own, it is a danger signal for

creditors. ven a high proportion of det leads to infle)iility in operation.

I*ter)retatio*4 Tata Teleservices has a det ratio of 0.O6%1 that is for every 0.O6 rupee of

outside liaility there is 1 rupee of owners fund and assets are primarily financed y owners

fund. -eliance and #harti $irtel have low det e!uity ratio this is ecause of the company is

reinvesting the Profits into the usiness. This shows the strong confidence on the future outlook

of the usiness.

INTERE'T CO8ERA!E RATIO4

Interest Coverage Ratio = PBIT / Interest Expense

$ ratio used to determine how easily a company can pay interest on outstanding det.

Page | 45

http://www.businessdictionary.com/definition/majority.html

http://www.investorwords.com/273/asset.html

http://www.businessdictionary.com/definition/majority.html

http://www.investorwords.com/273/asset.html



The lower the ratio, the more the company is urdened y det e)pense. 9hen a company<s

interest coverage ratio is 1.3 or lower, its aility to meet interest e)penses may e !uestionale.

$n interest coverage ratio elow 1 indicates the company is not generating sufficient revenues to

satisfy interest e)penses.

"/2e 3: Inte2et Co<e2ae Rat/o

Ratio*a+e4 This ratio uses the concept of net profits efore ta)es ecause interest is ta)deductile .It indicates the e)tent to which a fall in #IT is tolerale in that of the aility of the

firm to service its interest payments would not e adversely affected.

I*ter)retatio*4 Tata Teleservices has negative interest coverage ratio, that is firm is not making

profits to cover its fi)ed charges. The firm also has high fi)ed income charges. The firm needs to

look after its finances to increase earnings. #harti $irtel and Idea have apt interest coverage

capacity. -eliance high Interest coverage ratio signifies that it has unused det capacity.

E7IT#A MAR!IN

E:it"a Mar-i* ; E7IT#A< Tota+ Re1e*ue

Page | 41



#IT&$ margin measures the e)tent to which cash operating e)penses use up revenue. #IT&$

margin is often more useful than operating margin as it e)cludes non5cash items such

as depreciation.

"/2e =: EBIT'A &a2/n

Ratio*a+e4 $n appro)imate measure of a company<s operating cash flow ased on data from

the company<s income statement ,it is calculated y looking at earnings efore the deduction of

interest e)penses, ta)es, depreciation, and amorti7ation. This earnings measure is of particular

interest in cases where companies have large amounts of fi)ed assets ,high investments and

significant amount of det financing.. This measure is also of interest to a company<s creditors,

since #IT&$ is essentially the income that a company has free for interest payments

I*ter)retatio*4 Telecom industry is e)panding and thus has huge investments@ it is

characteri7ed y more of det financing. #IT&$ margin =f #harti $irtel, Idea and -eliance

is good enough ut Tata Teleservices #IT&$ margin is not satisfactory. *ompany needs to

enhance its revenues and keep a watch on its e)penses.

RETURN ON CAPITA& EMP&O3E#4

$ test of profitaility related to the sources of long term funds.

Page | 42

http://moneyterms.co.uk/depreciation/


http://www.investorwords.com/1207/creditor.html


http://www.investorwords.com/1207/creditor.html



ROCE P#IT L >*apital -eserve 2ong Term 2iaility?

-=* should always e higher than the rate at which the company orrows@ otherwise any

increase in orrowing will reduce shareholders< earnings

"/2e 5: Ret2n on Ca/tal E>lo;e?

Ratio*a+e4 -eturn on *apital mployed >-=*? is used in finance as a measure of

the returns that a company is reali7ing from its capital employed. It is commonly used as a

measure for compare assessing whether a usiness generates enough returns to pay for its cost of

capital. -=* compares earnings with capital invested in the company. The higher the ratio the

more efficient is the use of capital employed.

I*ter)retatio*4 #harti $irtel is market leader and has high -=*. Tata Teleservices is not

generating revenues from the capital invested in the company. $s the company is late entrant inthe market and that also with *&"$ technology and cut throat competition presently its

financial health is not good ut with tie up with ETT &ocomo it is e)pected to do well in future.

T=T$2 $SST TU-E=8- -$TI=%

Page | 43

http://en.wikipedia.org/wiki/Finance

http://en.wikipedia.org/wiki/Returns_(economics)

http://en.wikipedia.org/wiki/Capital_employed


http://en.wikipedia.org/wiki/Finance

http://en.wikipedia.org/wiki/Returns_(economics)




Page | 44

Com)a*y

Name

I*"ustry &ast

Price

Cha*-e >

Ch-

M(t Ca)

?Rs cr@

%ei-ht

ACC *ement 5 "ajor JJ/.03 54./0 50.0 14,3./3 0.43

7harti

Airte+

Telecommunications 5Service

/J4.O0 5.K3 5/.0 10J,41./4

O./

7HE& ngineering 5 (eavy /,O0/.10

56J.K0 51.3K 11,3J.40

O.41

Ci)+a Pharmaceuticals 616.60 54.33 5/.03 /3,133.36 0.KK

#&2 *onstruction *ontracting 5-eal state

/K3.10 5K.00 5/.K4 30,0K0.01 1.K

!rasim &iversified /,411.33

534./0 5/.11 /6,KO6.4/ 0.KO

H#2C Ainance 5 (ousing /,41.10

561.63 51.1/ K,30/./K 6.1/

H#2C 7a*( #anks 5 Private Sector 1,K6.10

6./0 0.1 JJ,44K.O3 6.OJ

Hero Ho*"a $uto 5 / 6 9heelers 1,JKO.00

J.03 0.O6 6,J/0.J1 1.OJ

Hi*"a+co $luminium 11.03 5O.O0 5/.31 6/,/K.J 1./J

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=C&compname=Cipla

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=D04&compname=DLF

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=GI01&compname=Grasim

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=HDF&compname=HDFC

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=HDF01&compname=HDFC%20Bank

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=HHM&compname=Hero%20Honda

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=HI&compname=Hindalco

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=C&compname=Cipla

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=D04&compname=DLF

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=GI01&compname=Grasim

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=HDF&compname=HDFC

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=HDF01&compname=HDFC%20Bank

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=HHM&compname=Hero%20Honda

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=HI&compname=Hindalco



Tota+ Asset Tur*o1er ; Tur*o1er< Tota+ Assets

The asset turnover ratio simply compares the turnover with the assets that the usiness has used

to generate that turnover.

"/2e 6: Total Aet T2no<e2

Ratio*a+e4 The total assets turnover ratio measures the use of all assets in terms of sales, y

comparing sales with total assets .In capital5intensive industries Total $sset Turnover ratio is

typically less than 1. $ high Total $sset Turnover ratio might imply that the firm does not

generate a sufficient volume of usiness >sales? given its total asset investment . $lso, a high

Total $sset Turnover might e the result of using outdated, osolete and fully depreciated assets

which does not generate high sales volumes.

I*ter)retatio*4 Telecom industry is capital intensive and thus its total asset to turnover ratio is

not high .Tata Teleservices has consideraly fair turnover ratio.

Page | 4"

HU& Persona *are /64.10 50.K3 50.O0 31,30K.4/ /.0/

ICICI 7a*( #anks 5 Private Sector K16.K0 5.O3 50.J1 101,JJ3.1

O.00

I*fosys *omputers 5 Software /,43K.0

0

514.10 50.40 13/,3J0.1

/

3.KK

ITC *igarettes /3K./3 5/.40 50.KK KJ,KJ4./6 6.JJ

ai)ra(ash

Asso

*onstruction *ontracting 5*ivil

166.J3 50.33 50.O1 /J,O00.JO 1.11

&arse* ngineering 5 (eavy 1,3OO.10

56.00 50.1K K/,KJO.KK 6.43

Mah a*"

Mah

$uto 5 *ars eeps 340.30 4.J0 1./6 61,64.K4 1./6

Maruti

'uBu(i

$uto 5 *ars eeps 1,/O.K0

51K.J0 51.36 64,J66.1O 1.O3

NTPC Power 5GenerationL&istriution

/06.40 51.O0 50.4J 14,J.44

4.3K

ON!C =il &rilling $nd )ploration 1,061.00

5/0.O0 51.KO //0,31.4

J.43

Re+ia*ce -efineries 1,04.13

516.03 51./1 6OJ,KKJ.00

16.4K

Re+ia*ce

Comm

Telecommunications 5Service

1O./0 5.30 5O.J3 60,6J/.OJ 1.1K

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=MS24&compname=Maruti%20Suzuki


http://www.articlesbase.com/investing-articles/understanding-the-total-asset-turnover-ratio-854159.html




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http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=LT&compname=Larsen



http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=NTP&compname=NTPC

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=ONG&compname=ONGC

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=RI&compname=Reliance




SNAPSHOT O" THE &AR(ET

#S T=P G$IE-S =A SESF

'cri)

Co"eCom)a*y

'cri)

!rou)

O)e*

Price

Hi-h

Price

&o

Price

&ast

Tra"e"

Price

&ast

C+osi*-

Price

Cha*-e

.r.t. &ast

C+osi*-

Price

?Rs.@ ?>@

3003/0 "ahindra "ahindra

$ 333.00 344.03 331.00 33J.00 336.0 O.60 0.J

3001J0 (&A* #ank $ 1,KO0.00 1,K30.00 1,K1.00 1,KO./0 1,K66.K0 16.60 0.4K

36/333 ETP* $ /03.10 /04.00 /0/.63 /03.40 /03.00 0.40 0./K

#S T=P 2=S-S =A SESF

'cri)

Co"e

Com)a*y 'cri)

!rou)

O)e*

Price

Hi-h

Price

&o

Price

&ast

Tra"e"

Price

&ast

C+osi*-

Price

Cha*-e

.r.t. &ast

C+osi*-

Price

?Rs.@ ?>@

3006K0 -eliance Infra $ 1,043./0 1,04.13 1,004.00 1,010.13 1,04/.J3 53/.0 5O.K4

36/1/-eliance*omm

$ 133.00 134.00 1O4./3 1O.03 13O.0 5.43 5O.K3

300O0 Tata Steel $ 403.40 40J.J0 3K.00 3J1.J3 401.3 51K.K0 56.61

300OO0 (indalco Inds $ 1J.00 1J.00 14J.0 14K.0 13.O3 53.3 56./J

36/O3O #harti $irtel $ /K3.00 /K4.00 /JO.0 /J3./0 /KO.63 5K.13 56.11

Page | 4&

Re+ia*ce

I*fra

Power 5GenerationL&istriution

1,013.3

5O.10 5O.O6 /O,J/.0 0.KJ

'7I #anks 5 Pulic Sector /,/K6.03

516.43 50.3K 1O3,3J1.4

3.1

'ter+ite I*" "etals 5 Eon Aerrous 63.33 5/0.30 5/.1 41,J13.43 /.O6

Tata Motors $uto 5 2*8sL(*8s J00.30 516./3 51.46 O6,3OO.00 1.1

Tata Poer Power 5GenerationL&istriution

1,6/J.00

54.K0 50.3/ 61,31O.O0 1./O

Tata 'tee+ Steel 5 2arge 3J3.43 514.10 5/.4J 31,K1.1 /.0O

TC' *omputers 5 Software 3.00 51/.0 51.43 1OJ,141.46

3.J1

%i)ro *omputers 5 Software 444.13 53.O3 50.J1 K,J0O.JK 6.JO

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http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=TM03&compname=Tata%20Motors

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=TPC&compname=Tata%20Power

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http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=SBI&compname=SBI






http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=TIS&compname=Tata%20Steel

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=TCS&compname=TCS

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=W&compname=Wipro


http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=SBI&compname=SBI




http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=TIS&compname=Tata%20Steel

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=TCS&compname=TCS

http://finance.indiamart.com/cgi-bin/pricechart_bse30.cgi?sc_did=W&compname=Wipro













36/J4J &2A $ 606.00 60K.00 /K6.03 /K3.00 60O.10 5K.10 5/.KK

INTERPRETATION O" %ARIOUS PARA&ETERS

I&PORTANT IN ANA!YSIN# A STOC(

EP'45

The portion of a company<s profit allocated to each outstanding share of common stock. arnings

per share serves as an indicator of a company<s profitaility.

*alculated as%

arnings per share is generally considered to e the single most important variale in

determining a share<s price. It is also a major component used to calculate the price5to5earnings

Page | 4*





valuation ratio. $n important aspect of PS that<s often ignored is the capital that is re!uired to

generate the earnings >net income? in the calculation. Investors also need to e aware of earnings

manipulation that will affect the !uality of the earnings numer. It is important not to rely on any

one financial measure, ut to use it in conjunction with statement analysis and other measures.

P<E RATIO45

$ valuation ratio of a company<s current share price compared to its per5share earnings.

*alculated as%

In general, a high PL suggests that investors are e)pecting higher earnings growth in the future

compared to companies with a lower PL. (owever, the PL ratio doesn<t tell us the whole story

y itself. It<s usually more useful to compare the PL ratios of one company to other companies

in the same industry, to the market in general or against the company<s own historical PL. It

would not e useful for investors using the PL ratio as a asis for their investment to compare

the PL of a technology company >high PL? to a utility company >low PL? as each industry has

much different growth prospects.

The PL is sometimes referred to as the DmultipleD, ecause it shows how much investors are

willing to pay per rupee of earnings. If a company were currently trading at a multiple >PL? of

/0, the interpretation is that an investor is willing to pay rs./0 for rs.1 of current earnings.

7ETA45

$ measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the

market as a whole. #eta is used in the capital asset pricing model >*$P"?, a model that

calculates the e)pected return of an asset ased on its eta and e)pected market returns..

#eta is calculated using regression analysis, and one can think of eta as the tendency of a

security<s returns to respond to swings in the market. $ eta of 1 indicates that the security<s

price will move with the market. $ eta of less than 1 means that the security will e less volatile

Page | 4-



than the market. $ eta of greater than 1 indicates that the security<s price will e more volatile

than the market. Aor e)ample, if a stock<s eta is 1./, it<s theoretically /0H more volatile than the

market.

#E7T<E9UIT3 RATIO45

$ measure of a company<s financial leverage calculated y dividing its total

liailities y stockholders< e!uity. It indicates what proportion of e!uity and det the company is

using to finance its assets.

$ high detLe!uity ratio generally means that a company has een aggressive in financing its

growth with det. This can result in volatile earnings as a result of the additional interest

e)pense.

If a lot of det is used to finance increased operations >high det to e!uity?, the company could

potentially generate more earnings than it would have without this outside financing. If this were

to increase earnings y a greater amount than the det cost >interest?, then the shareholders

enefit as more earnings are eing spread among the same amount of shareholders. (owever, the

cost of this det financing may outweigh the return that the company generates on the det

through investment and usiness activities and ecome too much for the company to handle.

This can lead to ankruptcy, which would leave shareholders with nothing.

The detLe!uity ratio also depends on the industry in which the company operates. Aor e)ample,

capital5intensive industries such as auto manufacturing tend to have a detLe!uity ratio aove /,

while personal computer companies have a detLe!uity of under 0.3.

#I8I#EN# PA3OUT RATIO45

The percentage of earnings paid to shareholders in dividends.

*alculated as%

Page | 4



The payout ratio provides an idea of how well earnings support the dividend payments. "ore

mature companies tend to have a higher payout ratio.

MAR$ET CAPITA&IZATION45

The total market value of all of a company<s outstanding shares. "arket capitali7ation is

calculated y multiplying a company<s shares outstanding y the current market price of one

share. The investment community uses this figure to determining a company<s si7e, as opposed to

sales or total asset figures. *ompany si7e is a asic determinant of asset allocation and risk5

return parameters for stocks and stock mutual funds. The term should not e confused with a

company<s Dcapitali7ation,D which is a financial statement term that refers to the sum of a

company<s shareholders< e!uity plus long5term det.

D %EE$ HI!H<&O%45

The highest and lowest price at which a stock has traded in the past 1/ months, or 3/ weeks.

"any investors see the 3/5week high or low as an important indicator.

Page | "5



ANA!YSIS O" CIP!A:)

PS K.KK

PL -$TI= /6.K/

#T$ 0.OJ

&#TLRUIT; -$TI= 0.//

"$-QT *$P /3JJ41.J3

&I8I&E& P$;=UT

-$TI=

/6.O1

S$2S OK404.00

*U--ET P-I* 616.03

3/ 9Q (IG(L2=9 646L/11

Page | "1



PRICE CHART O2 CIP&A45

Aor a medium to longer term investor, *ipla is still a decent and safe et. The stock is at a 3/

week high ut there is lot of positive news flow that can come still into the stock. It is going to

commission a new factory ne)t year. It has had a very ig capital e)penditure plan, which is

finally coming through. It is launching its inhaler in urope and US and that is a very margin

usiness again for the company.

It has had good revenue growth over the last few years and it has done !uite a lot etter than

some of the other companies in its peer group. So from a fundamental prospective, one should

hold on and if one is looking to uy, so now is a good time as any considering there is lot of

positive news flow in pharma stocks as a whole. "arket capitali7ation stands at -s /3JJ41.J3

crore. The company<s PS was at -s K.KK per share> an increase from last year at rs. K.0/?. The

stock<s price5to5earnings >PL? ratio was /6.K/. The latest ook value of the company is -s 3O.1O per share. $t current value, the price5to5ook value of the company was 4.6. The dividend yield

of the company was 0.3JH.

The company touched its 3/ week high -s 646.00 and 3/ week low -s /11.

ANA!YSIS O" B4a2t/ A/2tel :)

PS /O.J/

PL -$TI= 11.0

#T$ 0.K6

&#TLRUIT; -$TI= 0./J

Page | "2



"$-QT *$P 110/41/.J4

&I8I&E& P$;=UT

-$TI=

3.6

S$2S 6O01O/.K0

*U--ET P-I* /J3./0

3/ 9Q (IG(L2=9 OK3L/60

PRICE CHART O2 7HARTI AIRTE&45

#harti $irtel has resistance at -s 6/05660. #harti $irtel fell a lot, so it has gone through a normal

correction on the upside. There is a significant and of resistance at -s 6/05660 area and #harti

$irtel could not cross it. That was only to e e)pected. It is now resuming its downtrend. #hartiwill see much lower levels and the telecom sector is going to see a lot of mayhem. It has not

even started. So one would e etter off switching from #harti to maye a anking or even

technology or metals. Telecom is not a good idea.

#asically it has ought growth y going into $frica@ it was going into a phase where the growth

was not likely to happen. So yes, it has got the new suscrier addition ut at the end of the day,

Page | "3



it is going to take aout two5three years for it to make money for it to e PS accretive and that

also if they are ale to ring down the operating cost sustantially. So one should wait efore

entering into the stock and let all the ups and downs happen and maye si) months time is a

good time to re5look at the story and enter into it.

ANA!YSIS O" '!" !T' :)

PS J.41

PL -$TI= 6O

#T$ 1.41

&#TLRUIT; -$TI= 0.J

"$-QT *$P 31146.63

&I8I&E& P$;=UT

-$TI=

/6.K

S$2S /J//3.K6

*U--ET P-I* /K3

3/ 9Q (IG(L2=9 OK1L//1

PRICE CHART O2 #&2 &T#.

Page | "4



In a tough economic environment over the last few !uarters, the company saw demand evaporate

in all segments of real estate usiness ' residential and commercial, sale or leasing. In order to

weather the turulent times, the *ompany affected a strategy which allowed itself to e li!uid,

whilst it tested the right market conditions where it could attract significantly larger numer of

end customers. 8alue proposition eing a key element of this strategy, the *ompany launched /

different projects across India in the residential space and demonstrated leadership position

within the industry to ring ack demand.

The result of the aove was that the *ompany made notale sales in its affordale housing

segment. In continuation of this strategy in $pril /00K, &2A also launched its +city5centre

residential project in &elhi, which saw e)uerant response with all 1,634 units ooked in just one

day.

The share price has seen a 3/5week high of -s OK0.J0 and a low of -s //1 on #S. *urrent PS

PL ratio stood at J.41 and 6O respectively.

&2A has increased rates of its inaugural project in #angalore named as &2A 9estend (eights.

&2A has increased price to -s 6000Ls! ft from its previous price of -s 1J30s!Lft, which was set

up in $pril.

Page | ""



Increasing input costs was the cause of the price increase e)plains a company representative.

The project is eing formulated in a land region of /.3 acres.

The project comprises 1KJ0 units spread across 1K towers, which are 1J floors high. 9estend(eights is the initial segment of Eew Town, with high5rise apartments.

ANA!YSIS O" !@T:)

PS 3.1

PL -$TI= /6.13

#T$ 1./

&#TLRUIT; -$TI= 0.36

"$-QT *$P K6K60.OO

&I8I&E& P$;=UT

-$TI=

/0.3J

S$2S 66K/46.0

*U--ET P-I* 133K.J0

3/ 9Q (IG(L2=9 1J00LK46.J0

PRICE CHART O2 &T45

Page | "&



&arse* Tou:ro &imite" >2T? is a technology5driven engineering and construction

company with a strong presence in manufacturing, services and IT. The company has a presence

in more than 30 countries, and the revenues e)ceed US NJ.3 illion.

2T is one of the most widely held listed companies in India with AII5holding of 14.O. It has an

uninterrupted &ividend payment record since 1KO4. In A; 0K it gave a dividend of -s. 10.3 per

share.

Shares of engineering major 2arsen Touro were eaten adly after its !uarterly sales declined

4 per cent.

2T<s net sales fell to -s J16K crore in the &ecemer !uarter, lower than the corresponding

period a year ago. Its net profit grew 13 per cent to -s 4K4 crore over the same period a year

ago.

(owever, the 9ater Technology #usiness Unit of construction major 2arsen Touro secured

an international order of -s J305crore from Pulic 9orks $uthority, Ratar, for advanced waste

water treatment and uran reuse which makes it an interesting stock to watch.

ANA!YSIS O" ,AIPRA(ASH ASSOCIATES:)

PS .3J

Page | "*



PL -$TI= 16.43

#T$ 1.44

&#TLRUIT; -$TI= /.00

"$-QT *$P /J6K3.O/

&I8I&E& P$;=UT

-$TI=

13.K0

S$2S 34O1.J0

*U--ET P-I* 161.0

3/ 9Q (IG(L2=9 1J0LJ

PRICE CHART O2 AIPRA$A'H A''OCIATE'45

P $ssociates looks very interesting. It has spent one year in hiernation, so it seems to e

making all the right noises of reaking out upwards from here though it hasn:t yet roken out. It

will proaly have a uy on the stock.

The share closed at -s 13.13, up -s O.30, or /.K3H. "arket capitali7ation stands at -s

66,6OO.6 crore.

Page | "-



The company touched its 3/ week high -s 1J0.00 and 3/ week low -s JO.J6 on /1 =ct, /00K

and /O $pr, /00K, respectively. *urrently, it is trading 51/.4KH elow its 3/5week high and

J3./3H aove its 3/5week low.

The company<s trailing 1/5month >TT"? PS was at -s J./ per share. >&ec, /00K?. The stock<s

price5to5earnings >PL? ratio was 1J.0/. The latest ook value of the company is -s /K.6K per

share. $t current value, the price5to5ook value of the company was 3.63. The dividend yield of

the company was 0.4OH.

"IN'IN#S AN' CON!USION

Investors have een taking shelter with defensive stocks of fast5moving consumer goods

>A"*G? and pharmaceutical companies as the market turns weak in reaction to concerns that

Greece:s grave financial crisis could spread to the rest of the euro 7one.

The strategy, according to analysts, is to cushion the fall in value of their portfolios y uying

A"*G and pharma stocks which are relatively less volatile. Shares of Gla)oSmithQline Pharma

>GSQ?, 2upin and $ott India scaled new highs while *ipla and (industan Unilever >(U2?

were the top gainers among Sense) stocks in a choppy market on Thursday. The uying in someof these stocks could have also een driven y the fact that they vastly underperformed the

roader market during the recent ull run, analysts say.

9hen risk5aversion increases in the market, investors tend to move away from high eta stocks

to defensive stocks. Institutional investors usually uy defensive stocks as part of a reshuffling of

their portfolios to minimise losses in a choppy market.

The stock of GSQ pharma has gained 16H in the past months, compared to a 3H decline in the

enchmark Sense). 2upin and *ipla are the other e)amples of outperformers in the pharma

sector.

Page | "

http://uniurs.com/stocks/category/jp-associates/





$ few leading A"*G stocks led y (U2 also outperformed the market though analysts are of

the view it is more ecause of technical factors ecause, fundamentally, there have een some

concerns aout the prospects of the industry.

Aactors like growing price competition and high raw material prices have een putting pressure

on margins. -ural demand for consumer goods is also not picking up as e)pected.

&alal Street is likely to see a sudued trade for sometime in the asence of any positive trigger

from domestic front and on weak cues from gloal markets.

Investor sentiment is low at this moment following the det crisis in urope that has spooked

markets across the gloe. The domestic market has een under pressure in past few trades and in

coming days also the trend is likely to continue.

$ccording to S"* *apitals !uity (ead agannadham Thunuguntla

DThere are a lot of pressure points in market and after a recent rally that has taken the e!uity

markets ahead of their valuations a correction was due. In the coming period, we will see

downward trading,D

Page | &5



RE"ERENCES

.mo*eyco*tro+.com

.yahoofi*a*ce.com

.eco*omictimes.i*"iatimes.com

.stoc(mar(etti)si*"ia.com

.+i1emi*t.com

.eco*omyatch.com

Page | &1

http://www.moneycontrol.com/

http://www.yahoofinance.com/

http://www.economictimes.indiatimes.com/

http://www.stockmarkettipsindia.com/

http://www.livemint.com/

http://www.economywatch.com/

http://www.moneycontrol.com/

http://www.yahoofinance.com/

http://www.economictimes.indiatimes.com/

http://www.stockmarkettipsindia.com/

http://www.livemint.com/

http://www.economywatch.com/



ANNE$URES

Sample report of #harti airtel

Page | &2



$E$2;SIS =A

#($-TI $I-T2

Page | &3



COMPAN3 #ETAI&'45

Price Target% -s.630

"arket *ap% 11664.03

PL % 11.4K

3/ week highLlow% OK3L//K.30

#S code % 36/O3O

'HAREHO&#IN! PATTERN45

PROMOTER=' HO&#IN!4

IE&I$E P-="=T-S ' O3.60H

A=-IGE P-="=T-S ' //.11H

NON PROMOTER=' HO&#IN!4

IESTITUTI=E$2 IE8ST=-S

#$EQS AIE.IEST. $E& IESU-$E* ' O.OOH

AII:S ' 1K.3JH

PU7&IC IN8E'TOR' ' 1.//H

OTHER IN8E'TOR' ' 6.K0H

Page | &4



PRICE CHART4

Page | &"



2INANCIA& PER2ORMANCE 45

PARTICU!ARS "Y .00)0B "Y .00B)09 CO((!+TS

C$STO(!%S &4E2&-E54 &E&4E4-*#rowt9 of "5 )0o0)

#%OSS %!V!+$! 2*5E122?n 3*3E"21?n #rowt9 of 3- )0o0)

!IT,A 114E51-?n 1"2E-"-?n #rowt9 of 34 )0o0)

PAT &3E"4?n *-E"5?n #rowt9 of 23 )0o0)

#%OSS ASS!TS 423E224?n "-&E&1&?n In>rease bB %s 1&3E32?n

CAPITAL !'P!+,IT$%! 21-E543?n 1&&E4"?n ,e>line of 2" )0o0)

CAPITAL P%O,$CTIVIT) &3.-2 &3.&*

&I9UI#IT345

$s on march 61,/00K, the company has cash and ank alance of -s. /,440mn and marketale

securities of -s. /6,O// mn. The company actively manages its short term li!uidity to generate

optimum returns via investments made in det and money market instruments including ank

fi)ed deposits certificates of deposits, li!uid and income det fund schemes, fi)ed maturity

plans and other similar instruments.

#I8I#EN#45

*ompany paid a final dividend of -s. / per e!uity share of -s.10 each>/0H of face value? for the

A; /00J50K. The total dividend payout will amount to -s OOO/ mn, including -s. 4O3mn as ta)

on dividend.

Page | &&



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COMPAN3 7AC$!ROUN#45

7harti Airte+ formerly known as 7harti Te+e58e*tures &T# >#T82? is the largest cellular

service provider in India, with more than 1/1 million suscriers as of anuary /010. 9ith this,

#harti is now the world<s third5largest, single5country moile operator and si)th5largest

integrated telecom operator. It also offers fi)ed line services and roadand services. It offers itsT2*=" services under the Airte+ rand and is headed y Sunil #harti "ittal. The company

also provides telephone services and roadand Internet access >&S2? in top K3 cities in India. It

also acts as a carrier for national and international long distance communication services. The

company has a sumarine cale landing station at *hennai, which connects the sumarine cale

connecting *hennai and Singapore.

$E3 POINT'45

• IN#IA=' MO'T INNO8ATI8E COMPAN34

$ccording to a survey conducted y the 9all Street ournel $sia, #harti $irtel is rated as themost innovative company in India.

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$s part of the journal:s efforts to determine /00 most admired firms in $sia, 9all Street journalreleased list of top 10 Innovative companies in the region. #harti $irtel holds Oth position in theregion and stood first among the Indian companies in the innovative firms category.

The our*a+ comme*te" 7harti Airte+=s -roth as a c+ear ref+ectio* of co*sumer :oom i*

the cou*try a*" a))reciate" the com)a*y for creati*- u*ique )ro"ucts for the mar(et a*"im)orti*- smart i"eas from o1erseas/ e0te*"i*- their reach i*to I*"ia* society a*" raisi*-

sta*"ar"s of ser1ice.

• AC9UI'ITION 73 7RITI'H TE&ECOM4

In 1KK, #ritish Telecom ac!uired a /1.03H e!uity interest in harti cellular. #harti Telecomand #ritish Telecom formed a 31H % OKH joint venture, #harti #T Internet for providing Internetservices.

• In /00/, harti came out with issue of 1J.36 crore e!uity shares through ook uilding

route with a floor price of -s O3 per share, received id for 1J.33 crore shares. Throughthe issue, it ecomes the first com)a*y i* I*"ia to come out ith FGG> :oo( :ui+"i*-

issue.

IN#U'TR3 ANA&3'I'45

Last Price Market Cap.(Rs. cr.)

SalesTurnover

Net Profit Total Asse

Barti Airtel !"#.$% &$#'%#. *+'$&+.!# '+*."+ *%'*%.

Reliance Comm 163.05 33,653.96 13,610.5 !,35!.93 !,593.9

I"ea Cell#lar 6!.30 19,315.91 9,916.$5 1,00.!1 1,%3.%

Tata Comm !9$.%0 ,39.95 3,%$9.$3 515.95 9,1!5.9

&T'( %$.00 $,66!.00 $,5%6.53 !1$.3 1!,059.3

TataTeleser)ice !$.15 $,51.%3 !,0$1. *159.60 !,%$3.9

+pice Comm 5%.!0 3,9$6.3% 1,55.3$ *1,015.!! 1,%5.9

T#lip Telecom 919.95 !,66%.6 1,60.! !$9.5 1,0!.

'# Te In"ia 33.!5 11$.%% 159.09 1$.$ 1%1.9

-ol"stone Inra !%.%5 100.1! $5.61 6.!% 110.5

Page | &-



The Indian telecom sector has seen a phenomenal growth and currently has close to O60mntelecom customers. The market surpassed the US$ to ecome the second largest market in the

world after china.

Eotwithstanding this, the telecom penetration is only 6H with a wireless penetration of 66.Hand roadand penetration of 0.3OH,therey offering a good growth potential.

#harti airtel ,with over K4mn customers as on march 61,/00K, is the largest integrated telecomoperator in India with investment of -s /6,OJKmn, revenues of -s66,3/1mn and -s J,3K0mnin net profits. It is among the top 3 companies in terms of market capitali7ation in India.

IN8E'TMENT PO'ITI8E'45

The Indian growth story continues and the revival of the economy is on its way. There are no

douts that telecom sector will lead the economic revival and #harti airtel will e at the

forefront. #harti airtel is the first private moile GS" operator to have an all india footprint and

operations in Sri 2anka.

'TRON! 'U7'CRI7ER !RO%TH CONTINUE'45

The company continues to focus on suscrier additions in order to increase its market

penetration. The company is currently adding aout O4 suscriers every minute. This takes the

company:s total suscrier ase to just under K0 million which is aout /3H of the country:s

wireless users. The opportunity to increase this ase is immense as the country:s tele density

currently is just over 60H as compared to developed countries where teledensity ranges around

J0H. This approach y telecom companies to gain market share will oost top line growth as

well as profitaility and is also the major growth driver in the industry.

2ORA3 INTO E&ECTRONIC ME#IA 7ROA#CA'TIN!45

The company provides &S2 and telephone services in 13 circles spanning over K3 cities with

growing focus on new media and entertainment solutions such as &T( and IPT8. $s on march

Page | &



61,/00K, the company had /,/4,/6K customers , a growth of 1K.6H , of which 6K.6H were

suscriing to roadandLinternet services. The revenue from the telemedia services were

-s.66,O/4mn, a growth of 1H over the revenues in the previous financial year.

'TRATE!IC A&&IANCE' TO IMPRO8E 9UA&IT345

The company is constantly looking forward at providing value added services in order to retain

its suscriers. The company has entered into contracts and strategic alliances with several

market leaders in their respective areas of concentration. The company has a strategic alliance

with Infosys in order to manage its recently launched &T( service. The company has also an

alliance with I#E in order to service its operations in Sri 2anka.

OUT&OO$ AN# 8A&UATION45

*onsidering the aove mentioned investment rationale, the company can e rated an

outperformer. The stock currently trades at a PL of 11.4K.

!&O7A& EPAN'ION45

The telecom sector continues to play an important part in India:s growth story. #harti airtel with

100 million customers is eminently placed to leverage the enefits of the strong customer trust

that they have een ale to uild. The addition of new services like &T( and IPT8 will ensure

airtel retains and further strengthens its rand leadership.

$s a first step towards pursuing the international aspirations, airtel commenced operations in Sri

2anka. The run away success of the launch has justified the conviction that the airtel usiness

model can e effectively and profitaly replicated in other countries.

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134343865 Equity Research