Upload
cjvicky
View
1.091
Download
2
Tags:
Embed Size (px)
DESCRIPTION
Citation preview
A STUDY ON SHARE PRICES OF RELATED STOCKS USING FUNDAMENTAL & TECHNICAL ANALYSIS
Presented by
Vignesh c j
8uta45
STOCK EXCHANGE
• Mumbai stock exchange established in 1875.
• Next Ahmedabad stock exchange was set up
in 1894.
• Regulated by SEBI (securities & exchange
board of India).
• It was set up in 1988 ,but came into force
during 1992.
FEATURES OF STOCK EXCHANGE
• Control by the governing body .
• Rules & regulations.
• Listed securities.
• Quick disposal.
• Good security for loan.
SECURITIES & EXCHANGE BOARD OF INDIA
FEATURES:-
• To protect investors .
• To safeguard rights of investors in securities.
• Compulsory registration & issue of certificates
to the intermediaries.
• Chairman and five members are appointed by
the central government.
• Ensure a market place to rise funds at low cost.
INVESTORS
FUNCTIONS OF SEBI
• Regulating the business in stock exchange.
• Prohibiting frauds and malpractices in
market.
• Inspection, enquiry and audit of stock
exchange.
• Registering and regulating the working of
intermediaries.
• Prohibiting insider trading in securities.
SHARES
• A share in a company is one of the units in which
the total capital of the company is divided.
• Example:
If the capital of a company is 10000 and is
divided into 1000 units of Rs10 each, each unit
of Rs.10 shall be called a share of the company.
OBJECTIVE OF THE STUDY
PRIMARY OBJECTIVE
• To give better insight to the investor in deciding the investment in share of the selected companies scrip’s.
SECONDARY OBJECTIVE
• To compute the future value of the shares of the selected companies.
• To understand trends and patterns in share price movements.
• To analyze price movements using candle stick.
FINANCIAL ANALYSIS
• The primary objective is to judge profits and
financial soundness of the company.
• Better understanding of a firm’s position
and performance.
• It consist of various ratios.
TECHNICAL ANALYSIS
• The examination of the past price.
• To forecast future price.
• Technical analysis can be analyzed by
Bar chart
Line chart
Point and figure chart etc..
RATIOS USED• INVENTORY TURNOVER RATIO
Every firm has to maintain a certain level of inventory of finished goods to be able to meet requirement of business.
Cost of goods sold * 100
Average inventory at cost
• CURRENT RATIO
The ratio indicates the company’s ability to meet current obligations, i.e. the current assets must be sufficient to pay current liabilities
Current assets *100 Current liability
Cont….
• DEBTOR TURNOVER RATIO
Debtor’s turnover ratio indicates the velocity of debt collection of firm.
Total sale Debtors
• RETURN ON INVESTMENT
Return on shareholders investment popularly known as ROI.
Net profit (after interest &tax) *100Shareholders funds
Cont…• Operating profit margin
Indicates the operating profit margin after taking into account
all indirect costs and expenses of manufacturing,
administrative and distribution activities. Operating profit *100
Net sales
• Dividend yield ratio
Is calculated to evaluate the relationship between dividend
per share paid and the market value of share.
Dividend per share
Market value per share
INTRODUCTION TO THE COMPANY
ELGI EQUIPMENTS LTD
• Public Limited Company commenced in 1975.
• Manufactures Air - Compressors, Hydraulic lift, Lubricating
Equipment, Horns, Power brakes, etc..
• Technical collaborations with Pumpen Fabrik Urach,
Landweher and Gobel .
• Specializes in custom-built solutions.
RATIO ANALYSIS OF ELGI
Particulars 2002 2003 2004
Net profit margin 5.02 5.14 7.55
Operating profit margin 11.85 11.59 15.02
Gross profit margin 10.75 10.88 14.68
Dividend Yield 1.36 1.5 0.6
Return On Net worth 14.16 15.93 27.61
Current Ratio 1.58 1.46 1.47
Debt Equity Ratio 0.32 0.07 0.03
Debtors Turnover Ratio 8.06 8.44 10.12
Fixed Assets Turnover Ratio2.41 2.63 3.23
Inventory turnover Ratio 7.87 8.33 8.18
0
5
10
15
20
25
30
Net profit margin
Operating profit
margin
Gross profit
margin
Dividend Yield
Return On Net worth
Current Ratio
Debt Equity Ratio
Debtors Turnover
Ratio
Inventory turnover
Ratio
Chart Showing The Ratio Analysis Of ELGI Company
2002 2003 2004
TECHNICAL ANALYSIS OF ELGI
• Bullish market
on 23rd, 27th, 29th of Dec , July 1st, 13th, & 14th of
Jan month .(white candle in chart, buying is best)
• Bearish market
on 16th, 17th, 20th, 21st, 22nd, 24th, 28th, 30th, 31st,
of Jan and from march 1st to July first.(black candle
in chart, selling is best)
INTRODUCTION TO THE COMPANY
RANBAXY LABORATORIES LIMITED
• India’s largest pharmaceutical Company.
• It is ranked amongst the top ten generic companies in
worldwide.
• The Company was incorporated in 1961 and went public in
1973.
• The Company has a strong Brand marketing team and
distribution network in India
• Largest investor on R&D in the Indian pharmaceutical
industry with an R&D spend of 7% of its sales during 2004.
• It has joined hands with GlaxoSmithKline Plc for a global
alliance in the area of drug discovery and development.
RATIO ANALYSIS OF RANBAXY
Particulars 2002 2003 2004
Net profit margin 10.24 20.65 21.42
Operating profit margin 15.81 25.91 27.49
Gross profit margin 13.59 25.22 27.27
Return On Net worth 13.73 35.88 37.91
Current Ratio 1.76 1.80 1.93
Debt Equity Ratio 0.12 0.04 0.01
Debtors Turnover Ratio 4.60 4.96 6.26
Fixed Assets Turnover Ratio 2.43 3.10 3.42
Inventory turnover Ratio 4.87 5.64 5.64
0
5
10
15
20
25
30
35
40
Net profit margin
Operating profit
margin
Gross profit
margin
Return On Net worth
Current Ratio
Debt Equity Ratio
Debtors Turnover
Ratio
Fixed Assets
Turnover Ratio
Inventory turnover
Ratio
Chart Showing The Ratio Analysis Of Ranbaxy
2002 2003 2004
1180
1200
1220
1240
1260
1280
1300
1320
PRIC
ES IN
RS
DECEMBER 16/12/04 -31/12/04
PRICE FLUCTUATIONS OF RANBAXY LABORATORIES LIMITED
0
200
400
600
800
1000
1200
1400
PR
ICES
IN
RS
JANUARY 3/1/05 -14/1/05
PRICE FLUCTUATIONS OF RANBAXY LABORATORIES LIMITED
TECHNICAL ANALYSIS OF RANBAXY
• Bull market on 28th, 31st of Dec & 1st of June month of 2005
(white candle in chart, buying is best).
• Bear market on 16th, 17th, 20th, 21st to 24th, 27th, 29th, 30th, of
Dec & 1st of march, April, may, July, Oct, Nov, Dec (black candle in chart, selling is best).
FINDINGS & SUMMARY
• Findings & conclusions were drawn from the financial
and technical analysis.
• Share prices of Elgi was 56.69.
• Share prices of Ranbaxy was 1256.86.
• Uses of stop loss order of shares.
• Requirements' to buy and sell the shares.
CONCLUSION
• Elgi were mostly bearish in mood and so the investor
can sell these shares in a short term and can buy
them when the price decreases.
• Same as Elgi, Ranbaxy also mostly in bearish mood
and so the investor can sell these shares in a short
term and can buy them when the price decreases
Thank You!