Stock Returns of Sensex 20

KARNATAK UNIVERSITYDHARWAD

A PROJECT REPORT ON

“STOCK RETURNS OF SENSEX 20”

SUBMITTED TO KARNATAK UNIVERSITY IN PARTIAL FULFILMENT FOR REQUIREMENT OF THE DEGREE OF

MASTER OF COMMERCE

Submitted by Under the Guidance ofMahesh M. Agasimani DR. S. G. HundekarReg No: 10c01171

Department of Commerce , Karnatak University Dharwad Page 1

KARNATAK UNIVERSITY DHARWAD

Reg.No: 10c01171 Date: 09-07-2012

This is to certify that this project entitled “Stock Returns of Sensex 20"

Submitted by Mr Mahesh M. Agasimani for the partial

fulfillment of the Degree of Master of Commerce is based on the result of

experiment carried out by him at P.G.Department of studies in

Commerce,

Karnatak University, Dharwad, for the academic year 2011-2012.

GUIDE Chairman

Dr. S. G. Hundekar Dr. S. S. Hugar


Certificate

CONTENTS

SL.N

oTITLES PAGE NO

01

Chapter-1

1) EXECUTIVE SUMMARY

2) OBJECTIVES OF THE STUDY

3) SCOPE OF THE STUDY

4) METHODOLOGY

5) LIMITATIONS OF THE STUDY

1-4

02 Chapter -2

SENSEX AND THE COMPANIES5-26

03Chapter-3

CONCEPTUAL FRAMEWORK OF STOCK

RETURNS

27-35

04 Chapter-4

ANALYSIS AND INTERPREATION36-61

05Chapter-5

FINDINGS, SUGGESTIONS AND CONCLUSION62-64

06 BIBILOGRAPHY 65

Abbreviation


Particulars Abbreviation

Airtel AIR

Bajaj BJJ

Cipla CPL

DLF DLF

Housing Development Financial

CorpHDFC

HindalCo HIND

Hindustan Unilever Limited HUL

Industrial Development Bank of

IndiaIDBI

Infosys INFY

Indian Tobacco Company ITC

Jaiprakash Associates JAP

Jindal Steel Works JSW

Larsen and Toubro L&T

Mahindra and Mahindra M&M

Maruti Suzuki MSZ

National Thermal Power Corp NTPC

Oil and Natural Gas Company ONGC

Reliance Industries RIL

State Bank of India SBI

Tata Motors TM

Sensex SX


Chapter 1

INTRODUCTION


1.1 Executive Summary

Stock Returns can provide insight into the structure of the financial market.

It is generally believed that the relationship between stock return and Market

return can provide an insight into the structure of capital market. The main

objectives of study to ascertain the Stock Return changes in the Bombay Stock

Exchange. Second the correlation between Stock Returns and Market Returns.

Pricing of stock is an issue heavily discussed in the areas of finance, economics,

and accounting. Generally it is known that pricing react to the arrival of new

information. Investors in the stock markets frequently revise their expected

prices of stocks depending on the flow of information relating to the returns.

The current study is on Stock Returns of Sensex 20 Companies and Market

Returns, calculated for Weekly, Monthly, Quarterly, Half Yearly, and Annual

Period from closing prices of 20 companies in the Bombay Stock Exchange.

1.2 Objective of the Study

The objectives of the study is

To know the stock performance of Sensex 20 Companies.

To determine the Volatility of Sensex 20 Companies.

To know the market performance in the FY 2011-12.

To know the Excess Stock returns.

1.3. Need for Study

There exists a considerable amount of evidence both for and against various

level of efficiency for developed capital market. However, the capital market

of the developing world such as that of India has been less subjected to

efficiency Work. Therefore, further investigations on individual stock return

data would provide more conclusive evidence. The knowledge of stock return

in stock market can prove useful for investors.

By properly timing their buy and sell decisions, they can enhance their

adjusted profit, altering the time of routinely scheduled transaction in the


light of trading volume changes can enhancing one‘s return on investment.

The proposed study provides a useful insight into the behaviour of return

changes in the Indian capital market.

1.3 Scope of the study

The Scope of the study is exclusively conducted for Sensex 20 Companies.

The data sets include the opening and closing prices of the BSE Sensex 20

companies’ taken after adjusting to the dividends. The returns are calculated

for a period from April 2011 to March 2012 to maintain homogeneity in the

data.

1.4 Methodology

The project is an analytical work, where in the work, has to use the available

facts as information and analyze these to make a critical evaluation of

material. The Information furnished in this report has been calculated from

secondary Data only.

This study comprises a period of a year starting from April -1-2011 to March-

31-2011 i.e., for financial year 2011-2012. The units of analysis include 20

companies at the end of March 2012 that are listed on Bombay Stock

Exchange. The filtering process of companies includes 3 criteria.

First, the company must be listed on the Bombay Stock Exchange

before 1 April 2011.

Second, the stocks of companies must not be suspended for more than

12 months at any time Period.

Third, the stocks of companies must not be delisted during the period

of study.

Therefore, this study employs a data set of 20 Companies that are selected

based on five criteria and also BSE Sensex.

Secondary Data


The Secondary data is obtained from internet and respective companies’

website.

There are four approaches of calculating the stock returns viz:-

i. Open to Open method

ii. Open to Close Method

iii. Close to Close Method

iv. Close to Open Method

This work is based on Close to Close approach of calculating the stock

returns.

1.5 Limitations of the Study

The Good report interprets the result of the study. But every project has its

own limitations. The following are some of the limitations of the study.

1. The Study is done on basis of stock prices of the companies.

2. There is no hard and fast rule of calculating the stock returns.

3. The study is limited to only Sensex 20 companies out of all sensex listed

companies.

4. The Study is limited to only for the financial year 2011-12, i.e., April 2011 to

March 2012.

5. This study doesn’t consider the fundamental factors effecting the stock

returns.


Chapter 2

BSE SENSEX & COMPANIES

2.1 Introduction to BSE Sensex


BSE Limited is the oldest stock exchange in Asia What is now popularly known as

the BSE was established as "The Native Share & Stock Brokers' Association" in

1875.

Over the past 135 years, BSE has facilitated the growth of the Indian corporate

sector by providing it with an efficient capital raising platform.

Today, BSE is the world's number 1 exchange in the world in terms of the number of

listed companies (over 4900). It is the world's 5th most active in terms of number of

transactions handled through its electronic trading system. And it is in the top ten of

global exchanges in terms of the market capitalization of its listed companies

In the year of 1986, Bombay Stock Exchange Limited introduced the Stock Index that

eventually became the most important stock index of the country.

The SENSEX was based on the market-capitalization-weighted method and it

included the stocks of large and financially well established companies. From


September 2003, the SENSEX is measured on the method of free-float market

capitalization.

Apart from maintaining BSE SENSEX, the Bombay Stock Exchange also maintains

some other stock indices like:

SENSEX

MIDCAP

SMLCAP

BSE-100

BSE-200

BSE-500

Vision

"Emerge as the premier Indian stock exchange by establishing global benchmarks"

Timing

Trading on the BOLT System is conducted from Monday to Friday between 9:15 a.m.

and 3:30 p.m. normally. Refer Notice No. 20101014-8 for call auction.

Heritage

The first ever stock exchange in Asia (established in 1875) and the first in the

country to be granted permanent recognition under the Securities Contract

Regulation Act, 1956, BSE Limited has had an interesting rise to prominence over

the past 133 years

While BSE Limited is now synonymous with Dalal Street, it was not always so. The

first venues of the earliest stock broker meetings in the 1850s were in rather natural

environs - under banyan trees - in front of the Town Hall, where Horniman Circle is

now situated.


A decade later, the brokers moved their venue to another set of foliage, this time

under banyan trees at the junction of Meadows Street and what is now called

Mahatma Gandhi Road. As the number of brokers increased, they had to shift from

place to place, but they always overflowed to the streets.

At last, in 1874, the brokers found a permanent place, and one that they could, quite

literally, call their own. The new place was, aptly, called Dalal Street (Brokers'

Street).

In 2002, the name "The Stock Exchange, Mumbai" was changed to Bombay Stock

Exchange. Subsequently on August 19, 2005, the exchange turned into a corporate

entity from an Association of Persons (AoP) and renamed as Bombay Stock

Exchange Limited.

Several Firsts

At par with the international standards, BSE Limited has in fact been a pioneer in

several areas. It has several firsts to its credit even in an intensely competitive

environment.

First in India to introduce Equity Derivatives.

First in India to launch a Free Float Index.

First in India to launch US$ version of BSE Limited.

First in India to launch Exchange Enabled Internet Trading Platform.

First in India to obtain ISO certification for a stock exchange.

'BSE On-Line Trading System' (BOLT) has been awarded the globally

recognised Information Security Management System standard Award.

First to have an exclusive facility for financial training.

First in India in the financial services sector to launch its website in Hindi and

Gujarati.

Shifted from Open Outcry to Electronic Trading within just 50 days.

First bell-ringing ceremony in the history of the Indian capital markets

(listing ceremony of Bharti Televentures Ltd. on February 18, 2002)


2.2 Functions of BSE

i. Ideal Meeting Place: It provides an ideal and convenient platform for

meeting of both the parties ready to invest and parties with profitable

projects.

ii. Mobilization of Savings: It provides an ample opportunities for the

investors, both individuals and institutions to invest their surplus

funds into various financial instruments and thus directs the flow of

savings towards the deficit units.

iii. Safety to investors: It provides adequate safety to the investors from

fraud and manipulation caused due to activities of speculators,

member, brokers etc, under the Securities Contract (Regulation) Act

1956.

iv. New Securities Market: It helps in the distribution of new securities

by providing a good platform for the companies to sell their securities.

v. Ready Market: It provides continuous, ready, open, broad market for

securities.

vi. Liquidity: It is possible for the investors to sell their securities at the

best quoted price and thus, convert their investment into cash almost

immediately and without much effort.

vii. Capital Formation: It provides an arrangement for the collection of

savings, in terms of investments in securities and channelizes such

savings to the industries as capital.

viii. Price Determination: It helps to determine the current market price

of the securities by the means of demand and supply, free cash flow

etc associated with the securities.

ix. Economic Barometer: The price movement of the securities in BSE,

determines the level of savings and investment activities in India, thus,

indicating the state of health of the economy of the nation.

x. Seasoning of Securities: The temporarily holding of stock by players

such as underwriters, dealers, brokers and speculators etc is called

seasoning of securities. This helps in better absorption of market for

new issues.


xi. Business Information: The business information supplied by the

corporate entities is allowed to be exchanged between the investors

and the issuers by the BSE.

xii. Investor Education: BSE provides the various information to the

investors about the principles and advantages of investing in

securities, which helps in designing their own portfolio.

xiii. Regulation: The requirement of listing on BSE, makes it possible for

the BSE to rein in on the corporate enterprises.

Settlement

Compulsory Rolling Settlement

All transactions in all groups of securities in the Equity segment and Fixed

Income securities listed on BSE are required to be settled on T+2 basis

(w.e.f. from April 1, 2003). The settlement calendar, which indicates the dates

of the various settlement related activities, is drawn by BSE in advance and is

circulated among the market participants.

Under rolling settlements, the trades done on a particular day are settled

after a given number of business days. A T+2 settlement cycle means that the

final settlement of transactions done on T, i.e., trade day by exchange of

monies and securities between the buyers and sellers respectively takes

place on second business day (excluding Saturdays, Sundays, bank and

Exchange trading holidays) after the trade day.

The transactions in securities of companies which have made arrangements

for dematerialization of their securities are settled only in demat mode on

T+2 on net basis, i.e., buy and sell positions of a member-broker in the same

scrip are netted and the net quantity and value is required to be settled.

However, transactions in securities of companies, which are in "Z" group or

have been placed under "trade-to-trade" by BSE as a surveillance measure

("T" group) , are settled only on a gross basis and the facility of netting of buy


and sell transactions in such scrips is not available.

The transactions in 'F' group securities representing "Fixed Income

Securities" and " G" group representing Government Securities for retail

investors are also settled at BSE on T+2 basis.

In case of Rolling Settlements, pay-in and pay-out of both funds and securities

is completed on the same day.

Members are required to make payment for securities sold and/ or deliver

securities purchased to their clients within one working day (excluding

Saturday, Sunday, bank & BSE trading holidays) after the pay-out of the funds

and securities for the concerned settlement is completed by BSE. This is the

timeframe permitted to the Members to settle their funds/ securities

obligations with their clients as per the Byelaws of BSE.

The Annual Reports and Accounts of BSE for the year ended March 31, 2006

and March 31, 2007 have been awarded the ICAI awards for excellence in

financial reporting.

The Human Resource Management at BSE has won the Asia - Pacific HRM

awards for its efforts in employer branding through talent management at

work, health management at work and excellence in HR through technology


2.3 Board Composition

Sl No Name DesignationOther

Designation Held

1 Mr. S. RAMADORAI ChairmanVice chairman TCS. Ltd

2 Mr. SUDHAKAR RAO Public Interest Director IAS

3 Dr. SANJIV MISRA Public Interest Director IAS

4 Mr. ANDREAS PREUSS Shareholder Director Deputy CEODeutsche Borse AG

5 Mr. KEKI M. MISTRY Shareholder Director Vice-Chairman & CEO HDFC Ltd.

6 Mr. UTTAM BAGRITrading Member Director

Designated Dir,BCB Brokerage Private Ltd.

7 Ms. DEENA A. MEHTATrading Member Director

Designated Dir,Asit C Mehta Investment Intermediates Ltd.

8 Mr. ANIL M. SHAHTrading Member Director

Designated DirSpan Caplease Private Ltd.

Management Team

(As of May 2012)

Sl. No. Name Designation

1 Mr. ASHISHKUMAR CHAUHAN Interim Chief Executive Officer

2 Mr. BALASUBRAMANIAM V Chief Business Officer

3 Mr. NEHAL VORA Chief Regulatory Officer

4 Mr. NAYAN MEHTA Chief Financial Officer

5 Mr. KERSI TAVADIA Chief Information Officer

6 Mr. VIJAY AGRAWAL Officer on Special Duty

7 Mr. LAKSHMAN GUGULOTHU CEO - SME Platform


2.4 About Companies

1. Bharti Airtel Limited

Bharti Airtel Limited is a leading integrated telecommunications company

with operations in 20 countries across Asia and Africa.

Established on July 07, 1995, as a Public Limited Company

Headquartered in New Delhi, India, the company ranks amongst the top

5 mobile service providers globally in terms of subscribers. In India, the

company's product offerings include 2G, 3G and 4G services, fixed line,

high speed broadband through DSL, IPTV, DTH, enterprise services

including national & international long distance services to carriers. In the

rest of the geographies, it offers 2G, 3G mobile services. Bharti Airtel had

over 246 million customers across its operations at the end of February

2012.

The Market Capitalization of the company is Rs 113,223.36 Crores.

CEOs: Mr. Sanjay Kapoor (India & South Asia), Mr. Manoj Kohli

(International) Chairman: Mr. Sunil Bharti Mittal

2. BajaJ Autos Ltd

Bajaj Auto Limited is an Indian motorized vehicle-producing company.

Bajaj Auto is a part of Bajaj Group. Its founded by Jamnalal Bajaj at

Rajasthan in the 1930s. It is based in Pune, Maharashtra, with plants in

Chakan (Pune), Waluj (near Aurangabad) and Pantnagar in Uttaranchal.

The oldest plant at Akurdi (Pune) now houses the R&D centre Ahead.

Bajaj Auto makes and exports automobiles, scooters, motorcycles and the

auto rickshaw.

Bajaj Auto came into existence on 29 November 1945 as M/s Bachraj

Trading Corporation Private Limited. It started off by selling imported

two- and three-wheelers in India. In 1959, it obtained license from the

Government of India to manufacture two- and three-wheelers and it went

public in 1960.


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

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

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

http://en.wikipedia.org/wiki/Scooter_(motorcycle)

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

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

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

http://en.wikipedia.org/wiki/Aurangabad,_Maharashtra

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

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

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

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

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

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

In 2010, Bajaj Auto announced the cooperation with Renault and Nissan

Motor to develop of a US$ 2,500 car, aiming at a fuel-efficiency of

30 kilometres per litre or twice an average small car, and carbon dioxide

emissions of 100 g/km. On 3 January 2012.

Bajaj auto unveiled the Bajaj RE60, a mini car for intra-city urban

transportation. The target customer group will be Bajaj's three-wheeler

customers.


CEO: Mr. Rajiv Bajaj Chairman: Mr. Rahul Bajaj

3. CIPLA (Chemical Industrial & Pharmaceutical Labs) Ltd

Established 1935 by Khwaja Abdul Hamied, the Chemical, Industrial &

Pharmaceutical Laboratories, which came to be popularly known as Cipla.

He gave the company all his patent and proprietary formulas for several

drugs and medicines, without charging any royalty. On August 17, 1935,

Cipla was registered as a public limited company with an authorised

capital of Rs 6 lakhs.

Apart from its presence in the Indian market, Cipla also has an export

market and regularly exports to more than 185 countries in all corners of

the world.

Cipla cooperates with other enterprises in areas such as consulting,

commissioning, engineering, project appraisal, quality control, know-how

transfer, support, and plant supply.

Cipla is the world's largest manufacturer of Antiretroviral drugs (ARVs)

to fight HIV/AIDS, as measured by units produced and distributed

(multinational brand-name drugs are much more expensive, so in money

terms Cipla medicines are probably somewhere down the list). Roughly

40 percent of HIV/AIDS patients undergoing antiretroviral therapy

worldwide take Cipla drugs


CEO: Mr. S. Radhakrishan Chairman: Dr Y. K . Hamied


http://en.wikipedia.org/wiki/HIV/AIDS

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

http://en.wikipedia.org/wiki/Bajaj_RE60

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

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

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

4. DLF Ltd

The DLF Group was founded in 1946. It developed some of the first

residential colonies in Delhi such as Krishna Nagar in East Delhi, which

was completed in 1949. Since then it has been responsible for the

development of many of Delhi’s other well known urban colonies,

including South Extension, Greater Kailash, Kailash Colony and Hauz

Khas.

DLF's primary business is development of residential, commercial and

retail properties. The company has a unique business model with

earnings arising from development and rentals. Its exposure across

businesses, segments and geographies, mitigates any down-cycles in the

market. From developing 22 major colonies in Delhi, DLF is now present

across 18 states-28 cities in India.

DLF is credited with introducing and pioneering the revolutionary

concept of developing commercial complexes in the vicinity of residential

areas and bringing about a paradigm shift in the industry by redefining

shopping, recreation and leisure experiences with the launch of City

Centre in Gurgaon in 2000.

The Market Capitalization of the Company is Rs 30,834.19 Crores.

CEO: Mr. T.C Goyal Chairman: Mr. Kushal Pal Singh

5. HDFC (Housing Development Finance Corporation) Ltd

HDFC Ltd was established in 1977 with the primary objective of meeting

a social need of encouraging home ownership by providing long-term

finance to households.

Pioneer and leader in housing finance in India, since inception, HDFC has

assisted more than 4.02 million customers to own a home of their own,

through cumulative housing loan approvals of over Rs. 4.63 trillion and

disbursements of over Rs. 3.74 trillion as at March 31, 2012.

HDFC has a wide network of 311 offices (which includes 74 offices of

HDFC's wholly owned distribution company HDFC Sales Private Limited)

catering to over 2,400 towns & cities spread across the country.


HDFC also has offices in Dubai, London and Singapore and service

associates in the Middle East region, to provide housing loans and

property advisory services to Non-Resident Indians (NRIs) and Persons of

Indian Origin (PIOs).


Founder: Mr. Hasmukh. T. Parekh CEO: Mr. Keki Mistry

Chairman: Mr. Deepak. S. Parekh

6. HindalCo Industries Ltd

Hindalco Industries Limited was established in 1968. The metals flagship

company of the Aditya Birla Group is the world's largest aluminium

rolling company and one of the biggest producers of primary aluminium

in Asia. Its copper smelter is the world’s largest custom smelter at a single

location.

The acquisition of Novelis Inc. in 2007 positioned it among the top five

aluminium majors worldwide and the largest vertically integrated

aluminium company in India.

Today Hindalco Industries are a metals powerhouse with high-end rolling

capabilities and a global footprint in 13 countries.

Hindalco is one of the leading producers of aluminium and copper. Our

aluminium units across the globe encompass the entire gamut of

operations, from bauxite mining, alumina refining and aluminium

smelting to downstream rolling, extrusions, foils, along with captive

power plants and coal mines.

Its copper unit, Birla Copper, produces copper cathodes, continuous cast

copper rods and other by-products, such as gold, silver and DAP

fertilisers.


CEO: Mr. Debnarayan Bhattachary

Chairman: Mr. Kumar Mangalam Birla


7. HUL Ltd

Hindustan Unilever Limited (HUL) is India's largest consumer goods

company based in Mumbai, Maharashtra. It is owned by the British-Dutch

company Unilever which controls 52% majority stake in HUL. Its

products include foods, beverages, cleaning agents and personal care

products.

HUL was formed in 1933 as Lever Brothers India Limited and came into

being in 1956 as Hindustan Lever Limited through a merger of Lever

Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd.

The Company has an annual turnover of around Rs. 21,736 crores (FY

2011 - 2012). HUL is a subsidiary of Unilever, one of the world’s leading

suppliers of fast moving consumer goods with strong local roots in more

than 100 countries across the globe. Unilever has about 52%

shareholding in HUL.


CEO: Mr. Nitin Paranjpe Chairman: Mr. Harish Manwani

8. IDBI Ltd

IDBI Bank Ltd. headquartered in Mumbai is today one of India's largest

commercial Banks. For over 40 years, IDBI Bank has essayed a key nation-

building role, first as the apex Development Financial Institution (DFI)

(July 1, 1964 to September 30, 2004) in the realm of industry and

thereafter as a full-service commercial Bank (October 1, 2004 onwards).

As a DFI, the erstwhile IDBI stretched its canvas beyond mere project

financing to cover an array of services that contributed towards balanced

geographical spread of industries, development of identified backward

areas, emergence of a new spirit of enterprise and evolution of a deep and

vibrant capital market. On October 1, 2004, the erstwhile IDBI converted

into a Banking company (as Industrial Development Bank of India

Limited) to undertake the entire gamut of Banking activities while

continuing to play its secular DFI role.


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

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

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

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

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

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

http://en.wikipedia.org/wiki/Mumbai,_Maharashtra

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

As on March 31, 2012, IDBI Bank has a balance sheet of Rs.2.91 lakh crore

and business size (deposits plus advances) of Rs.3.92 lakh crore. As an

Universal Bank, IDBI Bank, besides its core banking and project finance

domain, has an established presence in associated financial sector

businesses like Capital Market.

The Market Capitalization of the bank is Rs 11,422.34 Crores.

CEO: Mr. G. V. Nageshwar Rao Chairman: Mr. R. M. Malla

9. Infosys Technologies Limited

Infosys was co-founded in 1981 by N. R. Narayana Murthy, Nandan

Nilekani, N. S. Raghavan, S. Gopalakrishnan, S. D. Shibulal, K Dinesh

and Ashok Arora with US$250. Today, Infosys is a global leader in the

"next generation" of IT, consulting. and outsourcing with revenues of US$

6.994 billion (FY12).

Infosys has a global footprint with 65 offices and 74 development centers

in US, India, China, Australia, Japan, Middle East, UK, Germany, France,

Switzerland, Netherlands, Poland, Canada and many other countries.

Infosys and its subsidiaries have 149,994 employees as on March 31,

2012.

Infosys ranked among the most innovative companies in a Forbes survey,

leading technology companies in a report by The Boston Consulting

Group and top ten green companies in Newsweek's Green Rankings.

Infosys was voted India's most admired company in The Wall Street

Journal Asia 200 every year since 2000. The corporate governance

practices were recognized by The Asset Platinum award and the IR Global

Rankings.


CEO: Mr. S. D. Shibulal Chairman: Mr. V. K. Kamat


http://www.infosys.com/contact/pages/index.aspx

http://en.wikipedia.org/wiki/S._D._Shibulal

http://en.wikipedia.org/wiki/S._Gopalakrishnan

http://en.wikipedia.org/wiki/N._S._Raghavan

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

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

http://en.wikipedia.org/wiki/N._R._Narayana_Murthy

10. ITC Ltd

ITC was incorporated on August 24, 1910 under the name Imperial

Tobacco Company of India Limited. As the Company's ownership

progressively Indianised, the name of the Company was changed from

Imperial Tobacco Company of India Limited to India Tobacco

Company Limited in 1970 and then to I.T.C. Limited in 1974.

In recognition of the Company's multi-business portfolio encompassing a

wide range of businesses - Cigarettes & Tobacco, Hotels, Information

Technology, Packaging, Paperboards & Specialty Papers, Agri-business,

Foods, Lifestyle Retailing, Education & Stationery and Personal Care - the

full stops in the Company's name were removed effective September 18,

2001. The Company now stands rechristened 'ITC Limited'.

ITC is one of India's foremost private sector companies with a turnover of

US $ 7 billion.

The Market Capitalisation of the company is Rs 178,299.17 Crore.

CEO and Chairman: Mr. Yogesh. C. Deveshwar

11. Jaiprakash Associates Ltd

Jaiprakash Associates Ltd. (JAL), the flagship company of the Jaypee Group, was

incorporated in 1996. In 2003 JAL was formed due to merger of Jaiprakash

Industries (JIL) and Jaiprakash Cement (JCL).

The company is currently executing various projects in hydropower /

irrigation / other infrastructure fields and has had the distinction of

executing simultaneously 13 hydropower projects spread over six states

and the neighbouring country Bhutan for generating 10,290 MW of

power. The Jaypee Group undertakes projects involving;

Large quantities of rock excavation (both surface and

underground) Controlled earth/rock fill

Concrete manufacture and placement (including chilling)

Hydro-mechanical equipment procurement and erection


http://www.itcportal.com/about-itc/itc-profile/ad.aspx

Steel Structures Expressway Construction and Real Estate

Development


Executive Chairman: Mr. Sunny Gaur

12. Jindal Steet Works ltd

JSW Steel Ltd. is an Indian steel company owned by the JSW Group based

in Mumbai, Maharashtra. JSW Steel is among India's largest steel

producers, with a capacity of 10 MT as of 2011.

As part of the US$10 billion O. P. Jindal Group, JSW Group has diversified

interests in Steel, Energy, Minerals and Mining, Aluminium, Infrastructure

and Logistics, Cement and Information Technology.

JSW Steel has also formed a many joint ventures in countries like Georgia,

Japan and acquired mining license in Chile, USA and Mozambique. JSW

Steel has recently acquired a majority stake in Ispat Industries Ltd.

making it India’s largest steel producer with a combined capacity of 14.3

MTPA by March 2011.

By 2020, the Company aims to produce 34 million tons of steel annually

with Greenfield integrated steel plants coming up in West Bengal near

Salboni about 35 km from Kharagpur and Barenda in Ranchi district of

Jharkhand.


CEO: Dr. V. K. Nowal Chairman: Mr. Sajjan Jindal

13. Larsen and Toubro Ltd

L&T was founded in Bombay (Mumbai) in 1938 by two Danish engineers,

Henning Holck-Larsen and Soren Kristian Toubro. Both of them were

strongly committed to developing India's engineering capabilities to meet

the demands of industry.


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

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

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

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

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

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

L&T is India's largest engineering and construction company, with a

dominant presence in India's infrastructure, power, hydrocarbon,

machinery and railway related projects.

In recent years, L&T has expanded its global presence and international

projects contributed 9% of its overall order book for the 2010–11.

L&T has diversified businesses designated as ‘Independent Companies’ or

‘ICs’ in the fields such as Hydrocarbon, heavy Engineering, Construction,

Power, Electrical and Automation, Machinery and Industrial Products,

Information Technology, Financial Services.

The Company has 119 subsidiaries and 23 associates.


CEO: Mr. A. M . Nayak Chairman: Mr. K. Venkatramanan

14. Mahindra and Mahindra Ltd

Founded in 1945 as a steel trading company, we entered automotive

manufacturing in 1947 to bring the iconic Willys Jeep onto Indian roads.

Over the years, it has diversified into many new businesses in order to

better meet the needs of customers. It follows a unique business model of

creating empowered companies by the principle of entrepreneurial

independence and Group-wide synergies which has led the company to

grow into a US $15.4 billion multinational group with more than 144,000

employees in over 100 countries across the globe.

Today, its operations span 18 key industries that form the foundation of

every modern economy: aerospace, aftermarket, agribusiness,

automotive, components, construction equipment, consulting services,

defense, energy, farm equipment, finance and insurance, industrial

equipment, information technology, leisure and hospitality, logistics, real

estate, retail, and two wheelers.


CEO: Mr. Anand Mahindra Chairman: Mr. Keshub Mahindra


http://www.mahindra.com/What-We-Do/Two-Wheelers

http://www.mahindra.com/What-We-Do/Information-Technology

http://www.mahindra.com/What-We-do/Finance-and-Insurance

http://www.mahindra.com/What-We-do/Farm-Equipment

http://www.mahindra.com/What-We-Do/Automotive

http://www.mahindra.com/What-We-Do/Agribusiness

http://www.mahindra.com/What-We-Do/Aerospace

http://www.mahindra.com/What-We-Do/Automotive

15. Maruti Suzuki Ltd

Maruti Suzuki India Limited (MSIL, formerly known as Maruti Udyog

Limited) is a subsidiary of Suzuki Motor Corporation, Japan. Maruti

Suzuki has been the leader of the Indian car market for over two and a

half decades.

The company has two manufacturing facilities located at Gurgaon and

Manesar, south of New Delhi, India. Both the facilities have a combined

capability to produce over a 1.5 million (1,500,000) vehicles annually. The

company plans to expand its manufacturing capacity to 1.75 million by

2013.

The Company offers 15 brands and over 150 variants ranging from

people's car Maruti 800 to the latest Life Utility Vehicle, Ertiga.

In terms of number of cars produced and sold, the Company is the largest

subsidiary of Suzuki Motor Corporation. Cumulatively, the Company has

produced over 10 million vehicles since the roll out of its first vehicle on

14th December, 1983.

Maruti Suzuki is the only Indian Company to have crossed the 10 million

sales mark since its inception. In 2011-12, the company sold over 1.13

million vehicles including 1,27,379 units of exports.


CEO: Mr. Shinzo Nakanishi Chairman: Mr. R. C. Bhargava

16. NTPC Ltd

India’s largest power company, NTPC was set up in 1975 to accelerate

power development in India. NTPC is emerging as a diversified power

major with presence in the entire value chain of the power generation

business. Apart from power generation, which is the mainstay of the


http://www.marutisuzuki.com/board-of-directors-shinzo.aspx

company, NTPC has already ventured into consultancy, power trading,

ash utilisation and coal mining. NTPC ranked 341st in the ‘2010, Forbes

Global 2000’ ranking of the World’s biggest companies. NTPC became a

Maharatna company in May, 2010, one of the only four companies to be

awarded this status.

The total installed capacity of the company is 39,174 MW (including JVs)

with 16 coal based and 7 gas based stations, located across the country. In

addition under JVs, 7 stations are coal based & another station uses

naptha/LNG as fuel.

The company has set a target to have an installed power generating

capacity of 1,28,000 MW by the year 2032. The capacity will have a

diversified fuel mix comprising 56% coal, 16% Gas, 11% Nuclear and

17% Renewable Energy Sources(RES) including hydro. By 2032, non

fossil fuel based generation capacity shall make up nearly 28% of NTPC’s

portfolio.

The Company has Market Capitalization of Rs 116,343.50 Crores.

Chairman cum CEO: Mr. Arup Roy Choudhury

17. ONGC Ltd

ONGC was founded on 14 August 1956 by the Indian state, which currently holds

a 74.14% equity stake. It is involved in exploring for and exploiting

hydrocarbons in 26 sedimentary basins of India, and owns and operates over

11,000 kilometers of pipelines in the country.

It is an Indian state-owned oil and gas company headquartered in Dehradun,

India. It is one of the largest Asia-based oil and gas exploration and production

companies, and produces around 77% of India's crude oil (equivalent to around

30% of the country's total demand) and around 81% of its natural gas. ONGC is

one of the largest publicly traded companies by market capitalization in India. It

is ranked 361st in the 2011 Fortune Global 500 list and is among the Top 250

Global Energy Company by Platts.

ONGC Videsh Limited (OVL) is the international arm of ONGC. It was

rechristened on 15 June 1989. It currently has 14 oil and projects across 15

countries. Its oil and gas production reached 8.87 MMT of O+OEG in 2010,


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

http://en.wikipedia.org/wiki/Fortune_Global_500

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

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

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

http://en.wikipedia.org/wiki/Dehradun,_India

http://en.wikipedia.org/wiki/Dehradun,_India

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

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

In 2011, ONGC applied to purchase of 2000 acres of land at Dahanu to process

offshore gas. ONGC Videsh, along with Statoil ASA (Norway) and Repsol SA

(Spain), has been engaged in deepwater drilling off the northern coast of Cuba in

2012.


CMD: Mr. R. S. Sharma

18. State Bank of India (SBI)

The origin of the State Bank of India goes back to the first decade of the

nineteenth century with the establishment of the Bank of Calcutta in

Calcutta on 2 June 1806. A unique institution, it was the first joint-stock

bank of British India sponsored by the Government of Bengal.

The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July

1843) followed the Bank of Bengal. These three banks remained at the

apex of modern banking in India till their amalgamation as the Imperial

Bank of India on 27 January 1921.

State Bank of India (SBI) is the largest banking and financial services

company in India by revenue, assets and market capitalization. It is a

state-owned corporation with its headquarters in Mumbai, Maharashtra.

It has 14097 branches and 27286 ATMs across country (as on May 2012).

The bank has made its international presence with 174 office in 34

countries.

For the FY2011-12 the bank has reported Net Profit of Rs 11707 Crores

and has market capitalization of Rs 122,747.52 Crores.

Chairman: Mr. Pratip Choudhari

19. Reliance Industries Ltd

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is

India's largest private sector enterprise, with businesses in the energy

and materials value chain. Group's annual revenues are in excess of US$

66 billion. The flagship company, Reliance Industries Limited, is a

Fortune Global 500 company and is the largest private sector company in

India.


http://www.ril.com/

http://en.wikipedia.org/wiki/Mumbai,_Maharashtra

http://en.wikipedia.org/wiki/Government-owned_corporation

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

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

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

Backward vertical integration has been the cornerstone of the evolution

and growth of Reliance. Starting with textiles in the late seventies,

Reliance pursued a strategy of backward vertical integration - in

polyester, fibre intermediates, plastics, petrochemicals, petroleum

refining and oil and gas exploration and production - to be fully integrated

along the materials and energy value chain.

The Group's activities span exploration and production of oil and gas,

petroleum refining and marketing, petrochemicals (polyester, fibre

intermediates, plastics and chemicals), textiles, retail, infotel and special

economic zones.

RIL continues to be featured, for the sixth consecutive year, in the Fortune

Global 500 list of the World's Largest Corporations, ranking for 2010 is as

follows:

Ranked 175 based on Revenues

Ranked 100 based on Profits

RIL is ranked 68th in 2010, in the Financial Times' FT Global 500 list of

the world's largest companies (up from previous year's 75th rank).

The RIL consists of 130 subsidiaries and 1 associate.


CEO cum Chairman: Mr. Mukesh. D. Ambani

20. TATA Motors Ltd

Tata Motors Limited is India's largest automobile company, with

consolidated revenues of INR 1,65,654 crores (USD 32.5 billion) in

2011-12.

Tata Motors is the leader in commercial vehicles in each segment, and

among the top three in passenger vehicles with winning products in the

compact, midsize car and utility vehicle segments. It is the world's fourth

largest truck and bus manufacturer.

Established in 1945, Tata Motors' presence indeed cuts across the length

and breadth of India. Over 6.5 million Tata vehicles ply on Indian roads,

since the first rolled out in 1954. The company's manufacturing base in


India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra),

Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand), Sanand (Gujarat) and

Dharwad (Karnataka).

Following a strategic alliance with Fiat in 2005, it has set up an industrial

joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra)

to produce both Fiat and Tata cars and Fiat powertrains.

The company's dealership, sales, services and spare parts network

comprises over 3,500 touch points.

Tata Motors is also expanding its international footprint, established

through exports since 1961. The company's commercial and passenger

vehicles are already being marketed in several countries in Europe, Africa,

the Middle East, South East Asia, South Asia, CIS, Russia and South

America. It has franchisee/joint venture assembly operations in

Bangladesh, Ukraine, and Senegal.

Tata Motors, the first company from India's engineering sector to be listed

in the New York Stock Exchange (September 2004), has also emerged as

an international automobile company. Through subsidiaries and associate

companies, Tata Motors has operations in the UK, South Korea, Thailand,

Spain and South Africa. Among them is Jaguar Land Rover, a business

comprising the two iconic British brands that was acquired in 2008.

Tata Motors with TATA NANO was able to produce world’s cheapest Car


CEO: Mr. Harish Batt Chairman: Dr. Ratan Tata


Chapter 3

CONCEPTUAL BACKGROUND OF

STOCK RETURNS


3.1 Introduction

The market often takes long time to reward stockholder with Stock Return

that corresponds to company’s Return on Capital. To better understand these

concepts it is crucial to differentiate Stock Returns from Return on capital.

The return on capital is the measure of company’s profitability where as

Stock Returns represents the combination of Dividends and Changes in

Stock Price (better known as capital gains).

The market often forgets the important relationship between Stock Returns

and Return of capital. The company can earn high Return of capital but still

the stockholder may suffer if the market price of the stock decreases over the

same period. On the contrary the company with low Return on capital may

experience its stock price increase if the firm performed less terribly than the

market had expected. Or maybe the company currently losing lots of money,

or investors had bid up its stock in anticipation of future profits.

3.2 Meaning of Stock Returns

To understand the meaning of stock returns, first, it is essential to know the

meaning of Investment, Stock and Return.

Investment

Investment refers to purchase of an asset or item with the hope that it

will generate income or appreciate in the future. In an economic sense, an

investment is the purchase of goods that are not consumed today but are

used in the future to create wealth.


Investment is a process of deferring current consumption for the sake of

future consumption.

What is Stock?

Stock is An instrument that signifies an ownership position (called equity) in

a corporation, and represents a claim on its proportional share in

the corporation's assets and profits.

Ownership in the company is determined by number of share the person

owns divided by the total number of shares outstanding. For example, if a

company has 1000 shares of stock outstanding and a person owns 50 of

them, then he/she owns 5% of the company.

Most stock also provides voting rights, which give shareholders a

proportional vote in certain corporate decisions. Only a certain type of

company called a corporation has stock; other type of companies such as sole

proprietorships and limited partnerships do not issue stock also called equity

or securities or corporate stocks.

What is Return?

Return is a primary motivating force that drives investment. It represents the

reward for the undertaking investment. The returns of an investment

consists of two components namely

i) Current returns

ii) Capital returns

Current Returns: The current returns is related to periodic cash inflows

such as dividends or interests generated by the investment. Current return is

measured as with periodic income in relation to the beginning price of the

investment.


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Capital Returns: The capital returns is reflected in the price change. It is

simply the price appreciation or depreciation divided by the beginning price

of the asset.

Stock Returns

So Stock Returns refers the reward for investing in the stocks. This reward

includes the current returns and capital returns.

In another, sense stock returns is the measure of performance of a stock.

Total Stock Returns = Current Returns on stock + Capital Returns on stock

3.3 Types of Stock Returns

The Stock Returns are of two types

i. Historical Stock Returns

ii. Expected (Ex Ante) Stock Returns

Historical Stock Returns is the measure of past performance of a security or

index. Historical returns are a reflection of the performance of a particular

security or index in the past. They are used in the development of informed

investing decisions where risks and potential returns are balanced to create a

portfolio with a probability of strong returns.

Expected Stock Returns are the anticipated future returns on the stock. It is

the weighted average of all the possible returns adjusted to their respective

probabilities.

3.4 Measuring Stock Returns

Historical Stock Returns


The total stock returns, for given period of time, is determined by the

following formula:

Dividends received Price change

during the period + during the period

Total Stock Return =

Price at the beginning of the Period

That is in formula terms

D + (P1 – P0) D = Divided for the period

R = P1 = Price at end of the period

P0 P0 = Price at beginning of period

Expected Stock Returns

The expected stock returns is calculated on basis of the possible returns and

probability of getting such returns.

The expected Stock returns is calculated using the formula

Where

E(R) = Expected Stock Return

Ri = Possible Returns

Pi = Probability

This project is based on the historical stock returns calculated for the Financial

Year 2011-2012.

Excess Returns

The returns from a Stock that exceeds a benchmark or index with a similar

level of risk is called as excess returns. It is widely used as a measure of the


value added by the portfolio or investment manager, or the manager's ability

to "beat the market."

Excess Returns = Stock Returns – Index Returns

3.5 Risk

What is Risk?

The chance that actual returns will be different than expected is called as

risk. The Risk includes the possibility of losing some or all of the original

investment. Different versions of risk are usually measured by calculating

the standard deviation of the historical returns or average returns of a

specific investment. A high standard deviations indicates a high degree of

risk.

There are two types of risk namely:

i. Unique risk

ii. Market Risk

Total Risk = Unique Risk + Market Risk

Unique risk refers to that portion of total risk which is arises from specific

factors like development of new product, labour strike etc. It is considered to

be firm level risk and can be reduced.

Market Risk is that portion of total risk which is attributable to economic

factors like GDP, monetary policy etc.

Measuring Risk

The risk is usually measured in terms of standard deviations which is

calculated as follow:


http://www.investopedia.com/terms/a/averagereturn.asp

http://www.investopedia.com/terms/h/historical-returns.asp

http://www.investopedia.com/terms/s/standarddeviation.asp

http://www.investopedia.com/terms/r/return.asp

Where

S = Standard Deviation

Ri = Returns for ith period

= Average returns

3.5 Approaches of measurements

The stock returns, as seen above, are based on the price at the beginning and

closing period. There are two types of prices for each period i.e., Opening

price and Closing price.

The opening price is the price at which the security first trades upon the

opening of the stock exchange, on a given trading day or period.

The closing price is the final price at which the stock is traded on a given

trading day, on a stock exchange.

For the period of the one Financial Year, there exists as many as opening and

closing prices, as much as days the working of stock exchange in an financial

year. So, which prices are to be considered, for purpose of calculating stock

returns is a big dilemma. So for this purpose, the experts have recommended

four approaches. These four approaches of measuring the stock returns are;

a. Open to Open approach

b. Open to Close approach

c. Close to Open approach

d. Close to Close approach

Open to Open Approach:

In this approach of calculating stock returns, only Opening Prices of the

stock is considered. i.e.,


D + (OP1 – OP0)

R =

OP0

D = Divided for the period

OP1 = Opening Price at end of the period

OP0 = Opening Price at beginning of period

Open to Close Approach:

In this approach of calculating stock returns, the opening price and the

closing price of the stock is considered. i.e., the Closing Price of the stock at

the end of the period and opening price of the stock at beginning of the

period are taken and stock return is measured as follows:

D + (CP1 – OP0)

R =

OP0


CP1 = Closing Price at end of the period

OP0 = Opening Price at beginning of period

Close to Open Approach:

In this approach of calculating stock returns, the closing price and opening

price of the stock is considered. i.e., the Closing Price of the stock at the

beginning of the period and Opening Price of the stock at closing of the

period are taken and stock return is measured as follows:

D + (OP1 – CP0)

R =

CP0



OP1 = Opening price at end of the period

CP0 = Closing Price at beginning of period

Close to Close Approach:

In this approach of calculating stock returns, the only Closing Prices of the

stock is considered. i.e.,

D + (CP1 – CP0)

R =

CP0


CP1 = Closing Price at end of the period

CP0 = Closing Price at beginning of period

This project is based on the Close to Close approach.

1. Weekly Stock Returns

The stock returns determined for the period of a week is called as weekly

stock returns.

2. Monthly Stock Returns

The stock returns determined for the period of a month is called as monthly

stock returns.

3. Quarterly Stock Returns

The stock returns determined for the period of a quarter consisting of 3

months is called as quarterly stock returns.


4. Half Yearly Stock Returns

The stock returns determined for the period of a half year consisting of 6

months or 2 quarters is called as half-yearly stock returns.

5. Yearly Stock Returns

The stock returns determined for the period of a year is called as yearly stock

returns.

Chapter 4

ANALYSIS AND INTERPRETATION


1. In the below table numbered 1.1, 1.2, 2.1, 2.2, 3.1 and 3.2, the weekly stock

returns of the Sensex 20 companies has been calculated for the financial year

2011-12.

The weekly stock returns is calculated as follows:-

D + CPL - CPO

R =

CPO


CPL = Closing Price at Last working day of the week.

CPF = Closing Price at First working day of the week.

For the first week of FY 2011-12

CPL = Closing Price as on 8 April 2011.

CPF = Closing Price as on 1 April 2011.

Similarly, the stock returns for all 52 weeks in the year are calculated.

The dividends are adjusted for the closing price of the respective week of

realization of dividends.

Tables 1.1, 1,2, 2.1, 2.2, 3.1, 3.2 depicts (from the calculations) average

weekly stock returns of 20 companies, where in, it is, from the


calculations found that, 14 out of 20 companies show negative returns

and rest 6 shows positive.

Companies like Mahindra and Mahindra, HUL, ITC, Bajaj Autos, Tata

Motors etc have shown positive results.

And Companies like DLF, HindalCo, RIL, IDBI, SBI etc including BSE

Sensex have shown negative results.

Table 1.1

Showing Weekly Stock Returns for FY 2011-12

Weekly Returns (in %)Week

↓AIR BJJ CPL DLF HDFC HIND SX

1 1.89 (3.13) (0.47) (4.37) 0.44 (2.38) 0.16

2 2.79 (0.13) 0.50 (5.55) (1.08) 0.38 (0.33)

3 1.20 3.64 0.28 0.82 4.13 5.00 1.11

4 0.58 0.72 (3.40) (9.78) (3.41) (1.95) (2.38)

5 (7.40) (10.51) (1.40) (1.62) (6.00) (7.18) (3.23)

6 4.69 1.38 2.08 5.88 (2.99) (0.75) 0.07

7 1.77 (0.51) 1.23 (1.96) 1.90 (3.37) (1.11)

8 (0.39) (1.16) 1.09 (1.08) (0.19) 3.38 (0.33)

9 1.67 4.33 2.05 3.73 0.39 (4.53) 0.60

10 (1.20) (3.38) 1.89 (1.16) (1.24) (2.74) (0.59)

11 1.73 0.95 (0.90) (2.82) (1.71) (7.80) (2.18)

12 2.89 3.33 (1.05) (3.52) 4.49 1.73 2.07

13 (2.02) 2.74 0.45 1.78 5.00 8.20 2.86

14 3.82 2.56 1.65 7.49 1.50 0.35 0.51

15 (1.38) (2.62) (2.38) (1.60) (2.72) (6.01) (1.57)

16 4.67 2.03 (0.62) 3.24 2.29 0.23 0.86

17 6.34 0.96 (4.81) (4.03) (2.42) (4.69) (2.80)

18 (5.00) (4.19) 0.10 (8.94) (3.19) (2.96) (4.90)

19 (6.23) 4.07 (4.82) (4.45) 0.16 (8.73) (2.69)

20 (1.49) (1.79) (2.05) (6.97) (4.77) (6.09) (4.14)

21 3.98 5.08 (2.62) (5.91) (2.71) (0.89) (1.81)


22 2.48 7.96 0.61 18.28 6.38 11.53 6.14

23 (2.03) 0.13 2.39 (4.04) (0.17) (3.54) 0.27

24 (3.62) (0.01) (1.70) 4.93 0.23 (3.67) 0.40

25 (2.85) (4.90) 0.37 (5.47) (5.41) (7.21) (4.56)

26 0.87 (0.75) 0.16 10.43 2.56 (2.62) 1.80

Table 1.2

Showing Weekly Stock Returns for FY 2011-12 (Cont…)


↓AIR BJJ CPL DLF HDFC HIND SX

27 (6.16) (1.99) 0.07 (0.09) 0.60 (3.22) (1.34)

28 8.16 8.40 1.81 6.34 3.27 1.59 5.24

29 (1.52) 0.64 (0.81) (3.12) (4.51) (5.04) (1.74)

30 3.69 6.94 3.75 10.06 7.96 16.73 6.07

31 1.56 (0.65) (1.29) (100.00) (0.52) (2.04) (1.36)

32 (0.62) (0.18) (2.04) (7.48) (2.55) (7.48) (2.11)

33 0.54 (2.64) 8.72 (10.51) (3.03) (3.92) (4.78)

34 (5.72) (3.03) 1.12 (0.20) (4.87) (8.37) (4.13)

35 4.07 4.25 4.33 9.54 8.69 19.51 7.34

36 (8.06) (2.29) (1.53) (4.16) (2.15) (2.36) (3.76)

37 (6.24) (1.16) 1.18 (8.97) (3.27) (5.14) (4.45)

38 (1.74) (3.24) 0.35 (0.49) 4.65 (3.03) 1.60

39 3.77 (0.47) (3.33) (5.62) (1.99) (5.18) (1.80)

40 (3.70) (8.39) 6.20 (4.53) 3.58 3.21 2.67

41 1.32 (2.03) (0.50) 12.50 1.77 12.48 1.81

42 2.21 8.97 0.82 8.83 0.94 7.28 3.62

43 8.95 (1.26) 1.35 (1.12) 1.11 0.45 2.96

44 4.31 4.70 (0.03) 8.86 (0.01) 5.65 2.15

45 (9.96) 7.83 1.41 0.17 (0.76) (0.13) 0.82

46 (0.10) 3.69 (7.57) 10.03 3.31 (0.76) 3.05

47 (2.07) (1.86) (2.88) (10.62) (5.53) (2.12) (2.00)

48 2.31 (1.01) 0.35 (10.16) (0.33) (0.30) (1.60)


49 (3.23) 0.01 (1.81) (0.05) 1.16 (8.79) (0.76)

50 (3.51) (1.58) (2.30) (3.68) (2.30) 4.54 (0.21)

51 2.66 (0.62) (0.26) (0.03) (0.65) (6.30) (0.60)

52 0.31 (1.95) 1.21 2.70 1.88 (1.75) 0.24

Ave (0.02) 0.34 (0.06) (2.28) (0.04) (0.78) (0.17)

SD 4.10 3.94 2.66 15.31 3.39 6.18 2.88

Table 2.1



↓HUL IDBI INFY ITC JPEE JSW L&T SX

1 (2.71) (0.03) 0.27 1.12 (0.84) 3.12 1.50 0.16

2 (0.22) 1.59 (7.38) 3.00 1.59 (2.13) 3.11 (0.33)

3 4.73 1.87 (2.66) (0.24) 3.91 1.50 (1.38) 1.11

4 (1.25) (4.40) (0.11) 1.08 (14.74) (2.48) (6.22) (2.38)

5 (3.68) (4.88) (0.66) (4.63) 1.76 (5.28) (3.35) (3.23)

6 11.56 0.88 (0.24) 3.54 (4.10) 4.09 (1.01) 0.07

7 1.17 (3.09) (1.02) (1.74) (3.55) (1.84) 8.05 (1.11)

8 (2.45) (2.81) (2.20) 1.39 8.06 1.98 (0.82) (0.33)

9 5.24 (0.04) 0.92 2.40 (2.37) 0.27 4.49 0.60

10 (2.42) 1.23 1.71 (1.19) (0.30) (4.15) (1.06) (0.59)

11 3.36 (1.98) (3.40) (0.03) (9.86) (3.71) (0.82) (2.18)

12 0.95 1.09 3.53 1.83 3.89 0.51 3.52 2.07

13 3.90 3.96 2.52 3.44 3.99 1.26 3.95 2.86

14 (0.82) 0.67 1.49 (0.74) (7.44) 0.05 1.52 0.51

15 (1.35) (1.03) (8.31) 0.77 2.31 (2.44) (0.93) (1.57)

16 1.34 0.26 3.47 2.60 (3.67) 0.98 0.41 0.86

17 (2.98) (4.77) (2.07) 0.75 (13.84) (10.92) (5.45) (2.80)

18 (1.71) (6.96) (6.37) (5.83) (4.73) (9.52) (4.98) (4.90)

19 (0.86) (1.04) (8.34) 1.12 (5.70) (6.36) 0.20 (2.69)

20 (0.19) (10.17) (6.28) (0.05) 8.46 1.44 (5.98) (4.14)

21 1.24 (2.49) (0.94) (0.65) (2.55) (8.61) (0.88) (1.81)


22 0.42 2.12 5.04 2.97 8.25 18.50 5.09 6.14

23 4.04 3.40 (1.92) (2.49) (3.09) (4.55) 5.01 0.27

24 2.04 (1.78) 5.38 0.15 12.77 (0.61) (4.75) 0.40

25 (2.66) (4.04) (2.23) (3.08) 1.10 (7.44) (9.78) (4.56)

26 2.79 (0.48) 8.28 2.86 (6.22) (6.55) (6.48) 1.80

Table 2,2

Showing Weekly Stock Returns for FY 2011-12 (Cont…)


↓HUL IDBI INFY ITC JPEE JSW L&T SX

27 (3.25) (3.75) (1.06) 0.56 8.16 (4.54) 2.60 (1.34)

28 0.88 7.18 9.48 3.12 (4.85) 6.59 1.03 5.24

29 (1.81) (1.89) (0.80) (0.22) 2.34 (3.52) (5.10) (1.74)

30 7.16 9.38 5.03 5.55 5.26 14.39 5.78 6.07

31 8.41 1.41 (1.07) (2.69) 2.96 7.12 (1.44) (1.36)

32 4.57 (7.24) (1.89) 1.26 (10.40

)(5.43) (4.47) (2.11)

33 (1.30) (9.53) (1.30) (5.78) (9.69) (9.15) (6.59) (4.78)

34 (4.04) (5.48) (5.07) (4.37) (0.39) (8.89) 1.83 (4.13)

35 5.26 6.45 3.70 7.98 11.24 14.28 3.55 7.34

36 (2.39) (4.83) 0.35 (4.90)(13.88

)(7.66) (6.39) (3.76)

37 1.70 (7.01) 0.41 (0.76)(11.32

)(13.23) (12.32) (4.45)

38 4.99 (4.64) (0.82) 4.48 0.65 0.70 (6.24) 1.60

39 (0.92) (5.35) 2.60 (1.69) 1.11 (1.22) (1.35) (1.80)

40 (2.65) 6.94 2.37 0.97 4.12 11.68 8.39 2.67

41 (1.20) 9.31 (8.66) 2.34 11.79 12.61 8.72 1.81

42 (0.37) 5.50 (0.08) (3.54) 10.70 1.61 8.63 3.62

43 (0.20) 4.74 5.30 1.05 (0.71) 2.15 8.46 2.96

44 2.74 (0.50) 2.18 (0.72) 6.51 7.06 (2.02) 2.15

45 (3.23) 5.25 0.10 1.59 6.79 15.24 (0.25) 0.82

46 (0.64) 12.07 6.03 0.59 0.69 4.65 7.28 3.05


47 0.00 (7.33) (0.11) 2.22 (6.37) (4.44) (6.82) (2.00)

48 (0.70) 2.79 (3.42) (1.79) (7.08) (3.77) (3.75) (1.60)

49 (0.13) (0.76) 0.47 1.17 19.76 (4.90) 0.22 (0.76)

50 2.20 (3.72) 0.22 4.78 (6.12) 0.04 1.36 (0.21)

51 3.28 0.47 0.15 2.13 3.83 (1.75) (1.33) (0.60)

52 1.65 (2.92) (0.19) 1.48 0.43 (1.78) 0.35 0.24

Ave 0.76 (0.51) (0.15) 0.45 (0.03) (0.29) (0.33) (0.17)

SD 3.30 4.93 3.97 2.85 7.44 7.05 5.00 2.88

Table 3.1



↓M&M MSZ NTPC ONGC RIL SBI TM SX

1 1.97 (1.58) (2.78) (2.13) (1.07) 2.19 0.97 0.16

2 (1.73) 0.33 0.93 (0.40) (0.57) 0.87 (3.75) (0.33)

3 (0.98) 3.83 0.84 5.99 2.12 2.04 2.89 1.11

4 (1.03) 1.01 (2.65) 0.99 (5.58) (1.91) (1.15) (2.38)

5 9.08 (3.86) (3.87) (0.20) (2.70) (5.80) (4.10) (3.23)

6 9.13 (3.51) 0.09 (0.33) (0.71) 0.23 2.55 0.07

7 0.60 (0.27) (0.97) (9.97) (2.87) (12.34) (6.51) (1.11)

8 0.98 (0.44) (2.60) 3.46 2.70 (3.77) (4.55) (0.33)

9 (4.74) 1.48 3.29 (1.37) (1.07) 3.50 (4.95) 0.60

10 (1.13) (0.31) 0.97 (4.73) 0.84 (3.02) (1.17) (0.59)

11 0.15 (5.07) 1.48 (0.54) (8.01) (1.42) (8.15) (2.18)

12 2.75 (3.95) 1.87 2.88 0.23 3.48 5.06 2.07

13 6.64 1.99 2.17 1.25 (0.95) 5.81 3.55 2.86

14 1.81 3.56 2.10 0.14 (0.90) 2.38 4.20 0.51

15 (1.45) (0.82) (0.39) 0.40 2.21 (0.31) (3.65) (1.57)

16 1.73 (1.06) (3.07) 0.38 0.03 0.93 (1.20) 0.86

17 (5.34) 3.94 (3.85) (3.49) (5.25) (6.10) (4.34) (2.80)


18 (8.07) (1.22) (2.50) 2.97 (4.36) (4.66) (13.41) (4.90)

19 (3.73) 4.50 1.89 1.06 (3.90) (1.76) (6.28) (2.69)

20 (9.28) (6.77) (0.80) (1.86) (3.89) (7.00) (6.44) (4.14)

21 7.42 (7.07) (4.35) 0.62 (1.60) (7.41) 1.72 (1.81)

22 1.85 0.07 0.42 (4.54) 11.94 5.57 3.26 6.14

23 (0.75) 2.04 (2.10) (0.98) 2.45 (1.96) (8.83) 0.27

24 10.21 0.33 5.26 5.20 0.28 (0.48) 18.94 0.40

25 (7.64) (1.82) (3.23) (6.47) (6.85) 0.51 (6.26) (4.56)

26 2.73 (0.47) 0.48 3.56 4.87 (2.27) (5.43) 1.80

Table 3.2

Showing Weekly Returns for FY 2011-12 (Cont..)

Weekly Returns (in %)

Week ↓

M&M MSZ NTPC ONGC RIL SBI TM SX

27 2.39 2.93 (0.39) (0.54) (0.85) (8.33) 20.03 (1.34)

28 8.57 (7.60) 3.84 0.62 8.15 7.46 5.60 5.24

29 1.98 6.21 (2.17) (0.49) (3.62) 3.51 2.92 (1.74)

30 5.43 3.27 5.52 7.01 7.49 (2.13) (0.03) 6.07

31 (0.32) (0.41) 0.53 (2.52) (2.05) 3.00 (5.39) (1.36)

32 (0.70) (5.71) (3.26) (3.74) 0.48 (8.48) 0.25 (2.11)

33 (2.50) (11.19) (6.28) (1.31) (8.58) (4.01) (7.49) (4.78)

34 (3.00) 0.99 (3.59) (4.45) (6.69) (2.02) 2.34 (4.13)

35 10.49 4.40 9.72 6.84 7.53 11.58 9.45 7.34

36 0.77 (0.62) (3.51) (2.68) (6.83) (1.20) (6.28) (3.76)

37 (5.37) (5.67) (3.07) (3.92) (4.30) (9.84) 3.84 (4.45)

38 3.77 4.80 (1.58) 4.16 3.24 (1.91) (2.42) 1.60

39 (0.06) (5.58) 1.32 (1.95) (7.17) (1.75) 12.44 (1.80)

40 7.40 3.16 (2.30) (0.21) 3.46 3.50 1.54 2.67

41 (0.41) 2.87 5.77 1.74 2.11 6.03 6.18 1.81

42 2.79 12.57 5.06 5.92 8.37 8.70 2.19 3.62

43 (4.41) 9.92 (0.34) 1.38 3.06 5.74 9.71 2.96

44 6.80 2.18 1.47 0.54 2.46 2.96 2.73 2.15


45 (1.22) 0.87 2.01 0.78 0.53 3.30 7.05 0.82

46 1.60 6.00 4.34 (0.41) (2.88) 11.24 (0.06) 3.05

47 2.23 (2.70) (2.21) 0.71 0.30 (8.69) 1.83 (2.00)

48 3.37 3.02 (2.67) (1.11) (0.73) 1.76 0.29 (1.60)

49 3.55 1.42 (2.80) 0.28 (5.00) (1.04) 3.68 (0.76)

50 0.15 2.37 (0.52) (3.80) (0.21) 0.25 0.02 (0.21)

51 0.28 (4.74) (0.67) (1.16) (3.62) (2.81) (3.74) (0.60)

52 (0.28) 3.09 (5.16) 0.19 0.57 (3.24) 1.01 0.24

Ave 1.05 0.21 (0.24) (0.12) (0.53) (0.37) 0.40 (0.17)

SD 4.58 4.43 3.22 3.31 4.45 5.19 6.46 2.88

INTERPRETATION:

The average weekly returns of the 14 companies out if 20 companies was

found to be negative.

The average weekly returns of BSE Sensex was also found to be negative

i.e., -0.17 %.

Out of the 20 companies, DLF was the worst performing stock with

average weekly returns of -2.28 %, where as the Mahindra and Mahindra

was the best performing one with average weekly returns of 1.05 %.

The stocks of DLF is considered to be more risky as the Standard

Deviation of the weekly returns of the DLF found to be 15.31% which is

more than any other company or BSE Sensex.

On the other hand, Cipla’s stock was found to be least risky.

The banking companies performed almost in similar passion with same

level of average returns ranging from -0.37% to -0.04% and risk at 3% to

5%.

The automobile industries, surprisingly performed better, all four

companies viz Bajaj Autos, Mahindra and Mahindra, Maruti Suzuki and

Tata Motors, yielded positive returns.


Both the FMCG companies, i.e., HUL and ITC performed well by providing

positive average weekly returns.

All construction and real estate companies’ stock found to be more risky.

The metal industry companies i.e., JSW and HindalCo found to be risky

and also yielded negative returns at almost same level of risk.

The average weekly returns of petrochemical companies namely RIL and

ONGC were also negative.

The telecommunication and IT companies namely Airtel and Infosys

respectively found to be almost same risky but yielded negative returns.

2. In the below tables numbered 4.1, 4.2, and charts numbered 1, 2, 3 and 4, the

monthly stock returns of the Sensex 20 companies has been calculated for the

financial year 2011-12.

In this context the monthly stock returns are calculated as follows:

D + (CPL – CPF)

R =

CPF

Where


CPL = Closing Price at Last working day of the month.

CPF = Closing Price at First working day of the month.

For the Month of April

CPL = Closing Price as on 29th April 2011

CPF = Closing Price as on 1st April 2011.

Similarly, the stock returns for all 12 Months in the year are calculated.

The dividends are adjusted for the closing price of the respective month of



Tables numbered 4.1, 4.2, and charts numbered 1, 2, 3 and 4 tells us that

average monthly stock returns of 20 companies, where in, it is, from the

calculations found that, 15 out of 20 companies show negative returns and

rest 5 shows positive.

Here also the Companies like Mahindra and Mahindra, HUL, ITC, Bajaj Autos,

Tata Motors have yielded positive returns, which also showed similar

performance in weekly periods.

And Companies like HindalCo, RIL, L&T, and SBI etc have provided negative

returns.

Table 4.1

Showing Monthly Returns for FY 2011-12

Monthly Returns (in %)

Apl May June July Aug Sept

AIR 6.60 (2.55) 3.62 13.97 (8.19) (7.48)

BJJ 0.99 (6.13) 5.03 2.88 5.69 (5.49)

CPL (3.09) 3.48 1.01 (6.12) (8.79) 1.18

DLF (3.60) 5.27 (10.93) 4.79 (14.91) 5.12

HDFC (0.07) (2.01) 1.95 (1.44) (4.27) (2.93)

HIND 0.89 (7.25) (8.62) (9.90) (10.41) (16.04)

HUL 0.40 8.43 10.58 (3.80) (0.57) 6.23

IDBI (1.10) (4.11) 1.30 (4.88) (14.16) (3.02)

INFY (9.70) (4.50) 3.39 (5.71) (16.60) 9.43

ITC 5.02 0.97 4.61 3.40 (3.93) (2.63)

JPEE (10.76) 1.17 (2.48) (21.40) 0.00 3.62

JSW (0.11) 4.82 (8.60) (12.20) (2.40) (17.94)

L&T (3.21) 2.47 8.34 (4.52) (8.68) (15.61)

M&M (1.81) 19.44 3.39 (3.38) (10.35) 3.79

MSZ 3.56 (4.93) (7.24) (7.24) (9.63) 0.03

NTPC (3.68) (6.86) 6.92 (5.22) (4.15) 0.21

ONGC 4.34 (6.67) (2.77) (2.60) (3.65) (3.65)


RIL (5.15) (1.34) (5.19) (4.00) (5.95) 0.36

SBI 3.17 (14.63) 3.28 (3.27) (15.77) (4.15)

TM (1.15) (7.22) (5.20) (5.11) (21.18) (3.86)

SX (1.46) (2.60) 1.27 (3.01) (8.94) (2.19)

Table 4.2

Showing Monthly Returns for FY 2011-12 (Cont…)

Monthly Returns (in %)

Oct Nov Dec Jan Feb Mar Ave SD

AIR 2.85 (2.38) (9.51) 5.80 (3.28) (2.67) (0.27) 6.98

BJJ 14.33 (2.45) (6.49) 8.54 11.80 (5.58) 1.93 7.30

CPL 3.27 13.36 (3.27) 9.35 (9.31) (3.61) (0.21) 6.91

DLF 20.09 (12.52) (16.09) 20.51 4.28 (6.13) (0.34) 12.53

HDFC 8.43 (5.80) (1.24) 7.17 (3.96) 0.72 (0.29) 4.37

HIND 9.75 (8.96) (12.35) 32.13 (2.97) (13.59) (3.94) 13.34

HUL 12.20 1.97 4.30 (5.73) (1.27) 7.83 3.38 5.77

IDBI 15.36 (18.61) (17.32) 28.63 8.05 (4.34) (1.18) 13.56

INFY 16.11 (8.09) 4.23 (2.19) 5.14 0.57 (0.66) 9.01

ITC 9.71 (3.86) (1.64) 2.93 3.38 9.46 2.28 4.67

JPEE 7.43 (13.94) (20.81) 36.35 (1.64) 15.99 (0.54) 16.11

JSW 18.75 (6.80) (18.10) 30.07 13.71 (7.44) (0.52) 14.90

L&T 7.21 (8.73) (23.14) 29.92 (2.76) 2.26 (1.37) 13.40

M&M 20.34 7.55 0.06 3.47 11.71 2.27 4.71 8.97

MSZ 4.50 (14.32) (4.36) 26.07 3.50 2.63 (0.62) 10.33

NTPC 8.89 (8.45) (3.43) 8.66 5.92 (7.69) (0.74) 6.59


ONGC 3.25 (3.30) (3.41) 6.67 7.26 (6.82) (0.95) 4.96

RIL 11.36 (9.50) (13.22) 15.35 (1.40) (1.40) (1.67) 8.02

SBI 2.36 (7.33) (10.98) 26.47 8.01 (5.62) (1.54) 11.52

TM 28.02 1.91 5.39 21.14 7.86 2.93 1.96 13.00

SX 9.62 (7.76) (6.24) 10.80 2.61 (2.99) (0.91) 6.17

Chart 1


1 2 3 4 5 6 7 8 9 10 11 12

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AIRBJJCPLDLFHDFCSX

Chart 2



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HINDHULIDBI INFYITCSX

Chart 3


1 2 3 4 5 6 7 8 9 10 11 12

(30.00)

(20.00)

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JPEEJSWL&TM&MMSZSX

Chart 4



1 2 3 4 5 6 7 8 9 10 11 12

(30.00)

(20.00)

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NTPCONGCRILSBITMSX

INTERPRETATION:

The average monthly returns of BSE Sensex was also found to be negative.

HindalCo was the worst performing stock, where as the Mahindra and

Mahindra was the best performing one even for the monthly returns.

The stock of JaiPrakash Associates, with Standard deviation of monthly

returns being 16.11%, found to be more volatile than any other company or

even BSE Sensex . On the contrary, HDFC stock was found to be least volatile

with SD of monthly returns being 4.37%.

The banking companies performed same but level of risk was low with HDFC

and was high with IDBI.

The automobile industry, overall showed the promising performance.


positive average monthly returns.


All the construction and real estate companies’ stocks found to be more risky.

The metal industries’ companies i.e., JSW and HindalCo found to be risky and

also yielded negative returns with almost same level of risk.

The average monthly returns of petrochemical companies namely RIL and

ONGC were disappointing.

The telecommunication industry was less risky than IT industry and also

yielded better than IT comparatively.

All the companies including BSE Sensex provided positive returns in the

month of October and almost all companies did well in the month of January

except Infosys. The month of June was also good, as most companies gave

positive results.

On the other hand, July was worst month, as maximum number of companies

including BSE Sensex reduced the shareholders wealth.

3. Here the following table numbered 5 and charts numbered 5, 6, 7 and 8,

shows the quarterly returns of the Sensex 20 companies for the financial year

2011-12.

In this context the quarterly stock returns are calculated as follows:

D + (CPL – CPF)

R =

CPF


CPL = Closing Price at Last working day of the quarter.

CPF = Closing Price at First working day of the quarter.

For the first quarter of FY 2011-12

CPL = Closing Price as on 30th June 2011.

CPF = Closing Price as on 1st April 2011


Similarly, the stock returns for all 4 Quarters in the year are calculated.

The dividends are adjusted for the closing price of the respective Quarter of


Table numbered 5, and charts numbered 5, 6, 7 and 8 gives us the

information about quarterly stock returns of 20 companies, where in, it is,

from the calculations found that, 15 out of 20 companies show negative

returns and rest 5 shows positive.

It can be determined, from the table, that, almost all companies did well in

the in fourth quarter i.e., the period from January to March.

Almost all the companies performed worst in the second quarter i.e., the

period from October to December.

In the Odd quarters, the DLF, L&T, Jaiprakash Associates, HindalCo, IDBI etc

were the great losers.

On the other hand, Mahindra and Mahindra ITC, HUL Tata Motors and Bajaj

Autos continued the top run.

Table 5

Showing Quarterly Returns for FY 2011-12

Quarterly Returns (in %)

April-June July-Sept Oct-Dec Jan-Mar Ave SD

AIR 11.23 (1.395) (9.89) (2.363) (0.606) 8.756

BJJ (3.67) 8.007 5.07 13.756 5.791 7.267

CPL 2.84 (13.150) 11.57 (5.062) (0.949) 10.598

DLF (22.39) (0.771) (9.18) 12.476 (4.967) 14.643

HDFC (0.85) (8.560) 2.19 3.200 (1.006) 5.323

HIND (15.79) (30.451) (7.09) 15.022 (9.577) 19.023

HUL 20.67 1.039 21.93 1.864 11.375 11.475

IDBI (6.27) (24.030) (23.16) 32.952 (5.127) 26.670

INFY (9.66) (13.649) 11.66 2.143 (2.376) 11.511


ITC 10.81 (1.983) 3.11 14.131 6.516 7.309

JPEE (13.27) (16.280) (23.42) 50.554 (0.606) 34.371

JSW (7.07) (32.944) (7.72) 34.376 (3.339) 27.881

L&T 10.40 (24.868) (24.51) 29.551 (2.357) 26.948

M&M 20.08 (11.914) 26.84 22.021 14.258 17.678

MSZ (9.09) (5.435) (14.58) 44.012 3.724 27.120

NTPC (1.09) (10.081) (2.49) 2.877 (2.695) 5.423

ONGC (6.66) (3.599) (4.90) 3.770 (2.845) 4.585

RIL (13.30) (6.246) (12.09) 5.842 (6.449) 8.754

SBI (11.53) (21.065) (13.06) 28.555 (4.274) 22.282

TM (19.99) (27.248) 36.74 35.713 6.304 34.679

SX (2.96) (12.306) (4.31) 9.928 (2.412) 9.203

Chart 5


Apl-June July-Sept Oct-Dec Jan-Mar

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AIRBJJCPLDLFHDFCSX


Chart 6



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Chart 7



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JPEEJSWL&TM&MMSZSX


Chart 8



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NTPCONGCRILSBITMSX

INTERPRETATION:

The average quarterly returns of BSE Sensex was also found to be negative

again.

While the HindalCo again dominated the, top loser position, where as the

Mahindra and Mahindra continued to be winner even for the quarterly

results.

In the quarterly analysis, the stock of Tata Motors found to be more risky

than any other company and BSE Sensex with Standard deviation of quarterly

returns being 34.68%. On the other hand, ONGC stock was found to be least

risky in terms of standard deviations of monthly returns, being 4.60%.

The banking companies still showed negative results but level of risk was low

with HDFC and was high with SBI.

The automobile industry, was good as usual with positive returns and with

bit higher risk.



positive average quarterly returns.

All the construction and real estate companies’ stocks found to be moderate

in terms of risk.


also had negative stock returns.

The average quarterly returns of petrochemical companies namely RIL and

ONGC were not upto the mark.

The telecommunication industry was found to be less risky than IT industry

and also yielded better than IT comparatively.

The stock returns of pharmaceutical and telecommunication industries were

positive in the first quarter, but were negative in the fourth quarter where all

other industries including BSE Sensex did well.

4. In the below table numbered 6 and charts numbered 9, 10, 11, and 12, the half –

yearly stock returns of the Sensex 20 companies has been calculated for the

financial year 2011-12.

So in this context the half-yearly stock returns are calculated as follows:

D + (CPL – CPF)

R =

CPF


CPL = Closing Price at Last working day of the half year.

CPF = Closing Price at First working day of the half year.

For the First half of FY 2011-12

CPL = Closing Price as on 30th September 2011 .



Similarly, the stock returns for other half of the year is calculated.

The dividends are adjusted for the closing price of the respective half of


5. In the below table numbered 6 and yearly stock returns of the Sensex 20 companies

has been calculated for the financial year 2011-12.

So in this context the yearly stock returns are calculated as follows:

D + (CPL – CPF)

R =

CPF


CPL = Closing Price at Last working day of the year.

CPB = Closing Price at First working day of the year.

For the FY 2011-12

CPL = Closing Price as on 31st March 2012.


Analysis table 6, and charts 9, 10 11 and 12 shows that returns of 14

companies, out of 20 companies show negative returns and rest 6 shows

positive.

It can be determined, from the table, that, majority of the companies did well

in the in second half of the year i.e., the period from October to March.

Almost all the companies performed worst in the first half of the year i.e., the

period from April to September including the Market.

In the Half yearly analysis, the Mahindra and Mahindra, Tata Motors, Bajaj

Autos, HUL ITC etc were the big gainers.


In the FY 2011-12, the stock of Mahindra and Mahindra did well with good

positive returns upto 63.16%

The HindalCo stock was worst performer of the FY 2011-12 with annual

returns of -39.56%.

The ITC and HUL companies did nice in the FY 2011-12 by yielding 23.44%

and 44.31% respectively.

Table 6

Showing Half-Yearly and Yearly Returns for FY 2011-12


Chart 9

Showing Half-Yearly Returns for FY 2011-12


Half Yearly Returns (in %)

Yearly Returns(in %)

Apl-Sept Oct-Mar Ave SD Apl-Mar

11.23 (11.51) (0.14) 16.08 (5.23)

5.13 10.69 7.91 3.93 14.96

(11.22) 6.54 (2.34) 12.56 (4.74)

(19.41) (0.02) (9.72) 13.70 (25.73)

(9.39) 6.16 (1.61) 10.99 (4.87)

(39.14) 4.27 (17.43) 30.70 (39.56)

19.79 22.56 21.17 1.96 44.31

(29.21) 3.41 (12.90) 23.06 (27.87)

(21.27) 15.69 (2.79) 26.13 (10.98)

7.91 16.21 12.06 5.87 23.44

(27.96) 14.45 (6.76) 29.99 (14.38)

(37.73) 31.32 (3.21) 48.83 (24.01)

(17.73) (0.86) (9.30) 11.93 (20.84)

8.09 56.60 32.35 34.30 63.16

(15.14) 25.25 5.05 28.56 5.87

(11.46) (1.21) (6.34) 7.25 (13.87)

(9.28) (0.46) (4.87) 6.23 (8.65)

(21.93) (5.07) (13.50) 11.92 (27.73)

(29.73) 12.47 (8.63) 29.84 (22.96)

(40.76) 87.04 23.14 90.37 10.91

(15.28) 5.62 (4.83) 14.77 (12.16)

AIR

BJJ

CPL

DLF

HDFC

HIND

HUL

IDBI

INFY

ITC

JPEE

JSW

L&T

M&M

MSZ

NTPC

ONGC

RIL

SBI

TM

SX

Apl-Sept Oct-Mar

(25.00)

(20.00)

(15.00)

(10.00)

(5.00)

0.00

5.00

10.00

15.00

AIRBJJCPLDLFHDFCSX

Chart 10

Showing Half –Yearly Returns for FY 2011-12

Apl-Sept Oct-Mar

(50.00)

(40.00)

(30.00)

(20.00)

(10.00)

0.00

10.00

20.00

30.00


Chart 11



Apl-Sept Oct-Mar

(60.00)

(40.00)

(20.00)

0.00

20.00

40.00

60.00

80.00

JPEEJSWL&TM&MMSZSX

Chart 12


Apl-Sept Oct-Mar

(60.00)

(40.00)

(20.00)

0.00

20.00

40.00

60.00

80.00

100.00

NTPCONGCRILSBITMSX

INTERPRETATION:

The Market remained down throughout the year.

While the HindalCo was worst performer in term of half yearly and Yearly

returns is considered, Mahindra and Mahindra emerged winner.


In the half-yearly analysis, the stock of Tata Motors found to be more risky

than any other company and BSE Sensex with Standard deviation of half-

yearly returns being hopping 90.37% On the other hand, HUL stock was

found to be least risky in terms of standard deviations of half-yearly returns,

being 1.96%.

The banking companies still showed negative results but level of risk was low

with HDFC and was high with SBI even in half-yearly analysis.

The automobile industry did well throughout the year with positive returns

for with higher risk.


positive returns throughout the year.

All the construction and real estate companies’ stocks found to be moderate

in terms of risk and return in comparison with other industries.


also had negative stock returns throughout the year.

The of petrochemical companies namely RIL and ONGC were not dependable

even though having high demand for petrol.

The telecommunication industry was found to be less risky than IT industry

and also yielded better than IT comparatively.

The stock telecommunication industries were positive in the first half but

was negative to same extent in second half of the year. But was reverse in

case with Pharmaceutical industry.


Chapter 5

FINDINGS AND SUGESTIONS

The analysis of stocks of 20 companies of Bombay Stock Exchange was made

for the Financial year 2011-12. The analysis was done in terms of weekly,

monthly, quarterly, half-yealy and yearly returns of the stock.


The findings for the study are as follows:-

FINDINGS:

1. The banking companies performed moderate throughout the year.

2. The FMCG companies were found to be safe ones.

3. The Construction industry suffered lot and yielded negative throughout

the year.

4. The Market was not good for the inter week trading as there was more

volatility.

5. The Market was at downward trend in the FY 2011-12.

6. For long term investment upto an year or more, the returns would be

better with low risk.

7. The good portfolio would reduce the risk.

8. The automobile industries emerged as positive yielding industry

throughout the year.

9. Even though, there was high demand for energy resources and petrol

throughout the year, the companies like RIL, ONGC, NPTC etc did not

perform upto the mark.

10. The Construction industry found to be risky in the FY 2011-12.

11. The European Market Crisis, the annual budget plan of Central

government, Monitory policy of Reserve Bank of India (RBI) contributed

to downward trend of market. There was less support form RBI and the

government.

SUGGESSIONS:

1. The automobile industries are to be watched ones


2. It is safe to invest in the Pharmaceutical Companies being low risky in

nature.

3. The construction companies need to be supported to perform better.

4. The inflation must be taken care more rationally to make the investment in

stocks more attractive.

CONCLUSION:

The focus of this study was on investigating the existence of seasonality in stock

returns in India. We used the monthly returns data of the BSE’s Sensex for the

period from April 20111 to March 2012. The analysis of descriptive statistics

showed that the maximum average return (positive) occurred in the month of

October and lowest (negative) in the month of July. The positive average returns

arose for six months and negative for the remaining six months. The standard

deviation results confirmed the risk factors of stock returns in Sensex 20 companies.

As a consequence, perhaps investors can improve their returns by timing their

investments. We would, however, like to caution that more work is needed before

making any firm conclusion in this regard. In the future, one could study other stock

indices (like the BSE’s National Index, the NSE’s Nifty etc.) in India and also

investigate the weekly and the intra-month effects.

Bibliography

1. Books

Name of the Book Author


Security Analysis and Portfolio Management Prasanna Chandra

Security Analysis and Portfolio Management Fisher and R Jordon

Financial Markets and Institutions M K Bhole

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