project report on "funda mental and technical analysis of stock market

FUNDAMENTAL AND TECHNICAL ANALYSIS
EXECUTIVE SUMMARY:
In the recent past, the bank interest rates have been increased steadil! "#t the
rate $% In%lati$n has als$ been increased! There is n$ bi& di%%erence bet'een the
interest rate and In%lati$n rate! "eca#se $% in%lati$n, val#e $% ($ne has been
decreased and c$st $% livin& has been increased! This has created panic a($n& l$'er,
(iddle and #pper (iddle class %a(ilies 'h$ c$nsidered keepin& their savin&s in banks
as sa%e as 'ell as re(#nerative! S$, the invert$rs are searchin& %$r pr$per invest(ent
aven#es! Here, an atte(pt is (ade t$ predict the %#t#re ($ve(ent $% scrips! This
st#d helps the invest$rs t$ invest in shares!
India has re&istered a &r$'th rate $% )!* percent in FY +,,-.,) and is
e/pected t$ &r$' at the rate $% 0,1 pl#s in this %iscal ear, and is $ne $% the %astest
&r$'in& ec$n$(ies in the '$rld! It is $ne $% the (a2$r attracti$ns %$r FI3s and FII3s!
FII3s invest in India thr$#&h sec$ndar Markets! There is a &reat sc$pe %$r India %$r
bec$(in& (e(ber $% 4.) nati$ns c$((ittee!
The st$ck e/chan&e c$(es in the sec$ndar (arket! St$ck e/chan&e per%$r(s
activities s#ch as tradin& in share, sec#rities, b$nds, (#t#al %#nd 5 c$(($dities!
St$ck "r$kin& ind#str is &r$'in& at an en$r($#s rate, as ($re and ($re pe$ple are
attracted t$'ards st$ck e/chan&es 'ith the h$pe $% (akin& pr$%its!
"#t d#rin& this peri$d the c$#ntr als$ re&istered a %airl hi&h ind#strial
&r$'th! The $ld ind#stries and b#siness establish(ents 'h$ 'anted t$ e/pand the
activities as 'ell as the ne' ind#stries and the b#siness establish(ents %l$ated shares
in the (arket t$ raise capital %$r their activities! The c$(panies, 'hich re&istered
stead &r$'th, earned c$n%idence $% the pe$ple and their shares, 'ere rated hi&h in
the (arket!
BSPATIL 0
FUNDAMENTAL AND TECHNICAL ANALYSIS
This pr$2ect rep$rt helps the reader t$ #nderstand the techni6#es $% investin&
in the st$ck (arket partic#larl in the sec$ndar (arket! S$(e $% the pr$ven
techni6#es have been #sed in this rep$rt t$ help the reader $r invest$r!
Fundamental Analysis is the st#d $% everthin& %r$( the $verall ec$n$(
and ind#str c$nditi$ns, t$ the %inancial c$nditi$n and (ana&e(ent $% speci%ic
c$(panies 7i!e!, #sin& real data t$ eval#ate a st$ck3s val#e8!
Technical analysis is the e/a(inati$n $% past price ($ve(ents t$ %$recast
%#t#re price ($ve(ents! Technical analsts are s$(eti(es re%erred t$ as chartists
beca#se the rel al($st e/cl#sivel $n charts %$r their analsis!
!"ecti#es $% the study:
T$ kn$' the %#t#re ($ve(ent $% selected c$(panies shares thr$#&h %#nda(ental and
technical analsis!
S#b $b2ectives
o T$ predict the %#t#re price $% the selected c$(panies shares!
o T$ st#d the strate&ies t$ be ad$pted b the retail invest$rs based $n the technical
and %#nda(ental analsis!
o T$ kn$' the %l$$r and cap price $% the st$ck!
o T$ anal9e individ#al c$(pan scrips b c$nsiderin& the %act$rs relatin& t$ the
ec$n$(, ind#str and the respective c$(pan!
o T$ predict invest$r p$siti$ns 7"#, sell 5 h$ld8 based $n hist$rical price trends
and the likel c$(pan pr$spects!
BSPATIL +
FUNDAMENTAL AND TECHNICAL ANALYSIS
Findings and suggestion:
EXPECTED MARKET PRICE OF BHEL
particulars
year
2008 200 20!0
F"#DAME#TAL A#ALI$I$ 2!%2&%0 2'0'&(2 %(2&)2
TECH#ICAL A#AL*$I$ +:,, ;-:,
curre+t ,ar-et price.%!/0%/080 210)!&%2

EXPECTED MARKET PRICE OF L3T
Particulars
year
2008 200 20!0
F"#DAME#TAL A#ALI$I$ 2%22&%% 2(2!&%8 228(&(!
TECH#ICAL A#AL*$I$ <<:, 2800
curre+t ,ar-et price %102(&80
INDIAN ST=C> MA?>ET
VERVIE& F E'UITY MAR(ET I) I)*IA
BSPATIL ;
FUNDAMENTAL AND TECHNICAL ANALYSIS
"SE 7"$(ba St$ck E/chan&e8
SENSEX - THE BAROMETER OF INDIAN CAPITAL MARKETS
Int+$ducti$n:
F$r the pre(ier St$ck E/chan&e that pi$neered the st$ck br$kin& activit in India,
0+) ears $% e/perience see(s t$ be a pr$#d (ilest$ne! A l$t has chan&ed since 0)-:
'hen ;0) pers$ns beca(e (e(bers $% 'hat t$da is called @The St$ck E/chan&e,
M#(bai@ b pain& a princel a($#nt $% ?e0!
Since then, the c$#ntrAs capital (arkets have passed thr$#&h b$th &$$d and bad
peri$ds! The 2$#rne in the +,th cent#r has n$t been an eas $ne! Till the decade $%
ei&hties, there 'as n$ scale t$ (eas#re the #ps and d$'ns in the Indian st$ck (arket!
The St$ck E/chan&e, M#(bai 7"SE8 in 0B)* ca(e $#t 'ith a st$ck inde/ that
s#bse6#entl beca(e the bar$(eter $% the Indian st$ck (arket!
SENSEC is n$t $nl scienti%icall desi&ned b#t als$ based $n &l$ball
accepted c$nstr#cti$n and revie' (eth$d$l$&! First c$(piled in 0B)*, SENSEC is a
basket $% ;, c$nstit#ent st$cks representin& a sa(ple $% lar&e, li6#id and
representative c$(panies! The base ear $% SENSEC is ,-./0.- and the base val#e is
,11! The inde/ is 'idel rep$rted in b$th d$(estic and internati$nal (arkets thr$#&h
print as 'ell as electr$nic (edia!
The Inde/ 'as initiall calc#lated based $n the @F#ll Market Capitali9ati$n@
(eth$d$l$& b#t 'as shi%ted t$ the %ree.%l$at (eth$d$l$& 'ith e%%ect %r$(
Septe(ber 0, +,,;! The @Free.%l$at Market Capitali9ati$n@ (eth$d$l$& $% inde/
c$nstr#cti$n is re&arded as an ind#str best practice &l$ball! All (a2$r inde/
pr$viders like MSCI, FTSE, ST=CC, S5D and D$' E$nes #se the Free.%l$at
(eth$d$l$&!
D#e t$ its 'ide acceptance a($n&st the Indian invest$rs, SENSEC is re&arded
t$ be the p#lse $% the Indian st$ck (arket! As the $ldest inde/ in the c$#ntr, it
pr$vides the ti(e series data $ver a %airl l$n& peri$d $% ti(e 7Fr$( 0B-B $n'ards8!
S(all '$nder, the SENSEC has $ver the ears bec$(e $ne $% the ($st pr$(inent
brands in the c$#ntr!
BSPATIL <
FUNDAMENTAL AND TECHNICAL ANALYSIS
The &r$'th $% e6#it (arkets in India has been phen$(enal in the decade
&$ne b! ?i&ht %r$( earl nineties the st$ck (arket 'itnessed hei&htened activit in
ter(s $% vari$#s b#ll and bear r#ns! The SENSEC capt#red all these events in the
($st 2#dicial (anner! =ne can identi% the b$$(s and b#sts $% the Indian st$ck
(arket thr$#&h sense/!
)SE 2)ATI)AL STC( EXC3A)4E5
The +6ani7ati$n:
The Nati$nal St$ck E/chan&e $% India Li(ited has &enesis in the rep$rt $% the
Hi&h D$'ered St#d 4r$#p $n Establish(ent $% Ne' St$ck E/chan&es, 'hich
rec$((ended pr$($ti$n $% a Nati$nal St$ck E/chan&e b %inancial instit#ti$ns 7FIs8
t$ pr$vide access t$ invest$rs %r$( all acr$ss the c$#ntr $n an e6#al %$$tin&! "ased
$n the rec$((endati$ns, NSE 'as pr$($ted b leadin& Financial Instit#ti$ns at the
behest $% the 4$vern(ent $% India and 'as inc$rp$rated in N$ve(ber 0BB+ as a ta/.
pain& c$(pan #nlike $ther st$ck e/chan&es in the c$#ntr!
=n its rec$&niti$n as a st$ck e/chan&e #nder the Sec#rities C$ntracts 7?e&#lati$n8
Act, 0B:* in April 0BB;, NSE c$((enced $perati$ns in the Fh$lesale Debt Market
7FDM8 se&(ent in E#ne 0BB<! The Capital Market 7E6#ities8 se&(ent c$((enced
$perati$ns in N$ve(ber 0BB< and $perati$ns in Derivatives se&(ent c$((enced in
E#ne +,,,!
)IFTY:
The Ni%t is relativel a ne' c$(er in the Indian (arket! S5D CNC Ni%t is a
:, st$ck inde/ acc$#ntin& %$r +; sect$rs $% the ec$n$(! It is #sed %$r p#rp$ses s#ch
as bench(arkin& %#nd p$rt%$li$sG inde/ based derivatives and inde/ %#nds! The base
peri$d selected %$r Ni%t is the cl$se $% prices $n N$ve(ber ;, 0BB:, 'hich (arked
the c$(pleti$n $% $ne.ear $% $perati$ns $% NSEAs capital (arket se&(ent! The base
val#e $% inde/ 'as set at 0,,,! S5D CNC Ni%t is $'ned and (ana&ed b India
Inde/ Services and Dr$d#cts Ltd! 7IISL8, 'hich is a 2$int vent#re bet'een NSE and
C?ISIL! IISL is a speciali9ed c$(pan %$c#sed #p$n the inde/ as a c$re pr$d#ct! IISL
BSPATIL :
FUNDAMENTAL AND TECHNICAL ANALYSIS
have a c$ns#ltin& and licensin& a&ree(ent 'ith Standard 5 D$$rAs 7S5D8, 'h$ are
'$rld leaders in inde/ services!
FII in Indian st$ck (arket
As part $% its initiative t$ liberali9e its %inancial (arkets, India $pened her
d$$rs t$ %$rei&n instit#ti$nal invest$rs in Septe(ber, 0BB+! This event represents a
land(ark event since it res#lted in e%%ectivel &l$bali9in& its %inancial services
ind#str!
*ear +et i+4est,e+t 5y FII
!2/% (&2'
!%/( 2(((&)
!(/2 ('')&)
!2/) )'20&
!)/' '%8)&2
!'/8 208&(2 /
!8/ '2&!!
!/00 ')2&!%
2000/0! )82&22
200!/02 82'2&
2002/0% 2))8&
200%/0( ((000&0%
200(/02 (!(!)&(2
2002/0) )'(%2&%(
200)/0' (%2'&8'
Fhat d$es India Need . FDI $r FII
FDI #s#all is ass$ciated 'ith e/p$rt &r$'th! It c$(es $nl 'hen all the
criteria t$ set #p an e/p$rt ind#str are (et! That incl#des, red#ced ta/es, %av$rable
lab$r la', %reed$( t$ ($ve ($ne in and $#t $% c$#ntr, &$vern(ent assistance t$
ac6#ire land, %#ll &r$'n in%rastr#ct#re, red#ced b#rea#cratic inv$lve(ent etc! IT,
"D=, A#t$ Darts, Dhar(ace#ticals, #ne/pl$red service sect$rs incl#din& acc$#ntin&G
dr#& testin&, (edical care etc are ke sect$rs %$r %$rei&n invest(ent! Man#%act#rin&
is a brick and ($rtar invest(ent! It is per(anent and stas in the c$#ntr %$r a ver
l$n& ti(e! H#&e invest(ents are needed t$ set this ind#str! It pr$vides e(pl$(ent
p$tential t$ se(i skilled and skilled lab$r! =n the $ther hand the service sect$r
re6#ires %e'er b#t hi&hl skilled '$rkers! "$th are needed in India! C$nventi$nal
'isd$( is that China 'ill have an #pper hand in (an#%act#rin& %$r a l$n& ti(e! I%
BSPATIL *
FUNDAMENTAL AND TECHNICAL ANALYSIS
India plas its cards ri&ht India (a be the h#b %$r the service sect$r! Still hi&h end
(an#%act#rin& in a#t$ parts and phar(ace#ticals sh$#ld be India3s tar&et!
The FII 7F$rei&n Instit#ti$nal Invest$r8 is ($nies, 'hich chases the st$cks in
the (arket place! It is n$t e/actl brick and ($rtar ($ne, b#t in the l$n& r#n it (a
translate int$ brick and ($rtar! S#dden in%l#/ $% this drives the st$ck (arket #p as t$$
(#ch ($ne chases t$$ little st$ck! In last %$#r ($nths an in%l#/ $% ab$#t H0!: "illi$n
has driven the Indian st$ck (arket +,1 hi&her!
Fhere FDI is a bit $% a per(anent nat#re, the FII %lies a'a at the sh$rtest
p$litical $r ec$n$(ical dist#rbance! The late nineties ec$n$(ic disaster $% Asian
Ti&ers is a ke e/a(ple $% the latter! =nce this ($ne leaves, it leaves r#ined
ec$n$( and r#ined lives behind! Hence FII is t$ be 'elc$(ed 'ith strict p$litical
and ec$n$(ical discipline!
China receives (ainl the FDI! The d$ n$t have instr#(ents t$ receive the FII i!e!
la's, instit#ti$ns and p$litical and 2#dicial %ra(e'$rk! =n the c$ntrar, India sh$#ld
'elc$(e b$th and '$rk hard t$ retain b$th!
I)TR*UCTI) T (TA( SECURITIES
BSPATIL -
FUNDAMENTAL AND TECHNICAL ANALYSIS
T3E (TA( MA3I)*RA 4RUP:
The >$tak Mahindra 4r$#p 'as b$rn in 0B): as >$tak Capital Mana&e(ent
Finance Li(ited! This c$(pan 'as pr$($ted b Uda >$tak, Sidne A! A! Dint$
and >$tak 5 C$(pan! Ind#strialists Harish Mahindra and Anand Mahindra t$$k a
stake in 0B)*, and thatAs 'hen the c$(pan chan&ed its na(e t$ >$tak Mahindra
Finance Li(ited!
>$tak Mahindra is $ne $% IndiaAs leadin& %inancial instit#ti$ns, $%%erin&
c$(plete %inancial s$l#ti$ns that enc$(pass ever sphere $% li%e! Fr$( c$((ercial
bankin&, t$ st$ck br$kin&, t$ (#t#al %#nds, t$ li%e ins#rance, t$ invest(ent bankin&,
the &r$#p caters t$ the %inancial needs $% individ#als and c$rp$rates!
As $n Dece(ber ;0, +,,*, the &r$#p has a net '$rth $% $ver ?s!;, 0,, cr$re,
and the AUM acr$ss the &r$#p is ar$#nd ?s! ++: billi$n and e(pl$s $ver B,*,,
e(pl$ees in its vari$#s b#sinesses! Fith a presence in +)+ cities in India and $%%ices
in Ne' Y$rk, L$nd$n, D#bai and Ma#riti#s, it services a c#st$(er base $% $ver
ar$#nd +!+ (illi$n!
The &r$#p speciali9es in $%%erin& t$p class %inancial services, caterin& t$ ever
se&(ent $% the ind#str! The vari$#s &r$#p c$(panies incl#deI
0! >$tak Mahindra Capital C$(pan Li(ited
+! >$tak Mahindra Sec#rities Li(ited
;! >$tak Mahindra Inc
<! >$tak Mahindra 7Internati$nal8 Li(ited
:! 4l$bal Invest(ents =pp$rt#nities F#nd Li(ited
*! >$tak Mahindra 7U>8 Li(ited
-! >$tak Sec#rities Li(ited
)! >$tak Mahindra =ld M#t#al Li%e Ins#rance C$(pan Li(ited
B! >$tak Mahindra Asset Mana&e(ent C$(pan Li(ited
0,! >$tak Mahindra Tr#stee C$(pan Li(ited
00! >$tak Mahindra Invest(ents Li(ited
0+! >$tak F$re/ "r$kera&e Li(ited
0;! >$tak Mahindra Drivate.E6#it Tr#stee Li(ited
0<! >$tak Mahindra Dri(e Li(ited
BSPATIL )
FUNDAMENTAL AND TECHNICAL ANALYSIS
>$tak Mahindra has internati$nal partnerships 'ith 4$ld(an Sachs 7$ne $%
the '$rldAs lar&est invest(ent banks and br$kera&e %ir(s8, F$rd Credit 7$ne $% the
'$rldAs lar&est dedicated a#t$($bile %inanciers8 and =ld M#t#al 7a lar&e ins#rance,
bankin& and asset (ana&e(ent c$n&l$(erate8!
($ta8 Secu+ities, an a%%iliate $% >$tak Mahindra "ank, is the st$ck.br$kin&
and distrib#ti$n ar( $% the >$tak Mahindra 4r$#p! The instit#ti$nal b#siness
divisi$n, 'hich pr$vides A>SESS, pri(aril c$vers sec$ndar (arket br$kin&! It
caters t$ the needs $% %$rei&n and Indian instit#ti$nal invest$rs in Indian e6#ities 7b$th
l$cal shares and 4D?s8! The divisi$n als$ has a c$(prehensive research cell 'ith
sect$ral analsts c$verin& all the (a2$r areas $% the Indian ec$n$(!
>$tak Sec#rities Ltd! is IndiaAs leadin& st$ck br$kin& h$#se 'ith a (arket
share $% ar$#nd )!: 1 as $n ;0st March! >$tak Sec#rities Ltd! has been the lar&est in
ID= distrib#ti$n!
The acc$lades that >$tak Sec#rities has been &raced 'ith incl#deI
0! Dri(e ?ankin& A'ard 7+,,;.,<8. Lar&est Distrib#t$r $% ID=As
+! Finance Asia A'ard 7+,,<8. IndiaAs best E6#it H$#se
;! E#r$ ($ne A'ard 7+,,:8."est E6#ities H$#se In India
<! Finance Asia A'ard 7+,,:8."est "r$ker In India
:! Finance Asia A'ard 7+,,*8. "est "r$ker In India
*! E#r$ ($ne A'ard 7+,,*8 . "est Dr$vider $% D$rt%$li$ Mana&e(entI E6#ities
The c$(pan has a %#ll.%led&ed research divisi$n inv$lved in Macr$
Ec$n$(ic st#dies, Sect$rial research and C$(pan Speci%ic E6#it ?esearch
c$(bined 'ith a str$n& and 'ell net'$rked sales %$rce 'hich helps deliver c#rrent
and #p t$ date (arket in%$r(ati$n and ne's!
>$tak Sec#rities Ltd is als$ a dep$sit$r participant 'ith Nati$nal Sec#rities
Dep$sit$r Li(ited 7NSDL8 and Central Dep$sit$r Services Li(ited 7CDSL8,
pr$vidin& d#al bene%it services 'herein the invest$rs can #se the br$kera&e services
$% the c$(pan %$r e/ec#tin& the transacti$ns and the dep$sit$r services %$r settlin&
BSPATIL B
FUNDAMENTAL AND TECHNICAL ANALYSIS
the(!
>$tak Sec#rities has 0B: branches servicin& ($re than +,+,,,,, c#st$(ers
and a c$vera&e $% +;0 Cities! >$taksec#rities!c$(, the $nline divisi$n $% >$tak
Sec#rities Li(ited $%%ers Internet "r$kin& services and als$ $nline ID= and M#t#al
F#nd Invest(ents!
>$tak Sec#rities Li(ited (ana&es assets $ver +:,, cr$res $% Assets Under
Mana&e(ent 7AUM8 !The p$rt%$li$ Mana&e(ent Services pr$vides t$p class service,
caterin& t$ the hi&h end $% the (arket! D$rt%$li$ Mana&e(ent %r$( >$tak Sec#rities
c$(es as an ans'er t$ th$se 'h$ '$#ld like t$ &r$' e/p$nentiall $n the crest $% the
st$ck (arket, 'ith the backin& $% an e/pert!
I#TROD"CTIO# TO THE TOPIC
FU)*AME)TAL A)* TEC3)ICAL A)ALYSIS:
BSPATIL 0,
FUNDAMENTAL AND TECHNICAL ANALYSIS
Fundamental analysis
The basic p#rp$se $% b#in& a sec#rit is t$ earn dividends and #lti(atel sell
it at hi&her price! An invest$r there%$re is interested in $btainin& esti(ates $% %#t#re
prices $% the share! These in t#rn 'ill depend #p$n the per%$r(ance $% the ind#str t$
'hich the c$(pan bel$n&s and the &eneral ec$n$(ic sit#ati$n $% the c$#ntr! The
(#ltit#de $% %act$rs a%%ectin& a c$(pan3s pr$%itabilit can be br$adl classi%ied asI
0! Ec$n$(ic 'ide %act$rsI these incl#des the %act$rs like &r$'th rate $% the
ec$n$(, the rate $% in%lati$n, %$rei&n e/chan&e rates etc 'hich a%%ects
pr$%itabilit $% all c$(panies!
+! Ind#str 'ide %act$rsI these incl#de %act$rs 'hich are speci%ic t$
ind#str t$ 'hich the c$(pan bel$n&s! F$r instance the de(and s#ppl &ap
in the ind#str, the e(er&ence $% s#bstit#tes, and chan&es in &$vern(ent
p$licies t$'ards ind#str a%%ects the c$(pan bel$n&in& t$ an ind#str!
;! C$(pan 'ide %act$rI these %act$rs are speci%ic t$ a %ir(! The %ir(
speci%ic %act$rs like plant and (achiner, the brand i(a&e $% the pr$d#ct, and
abilit $% the (ana&e(ent t$ a%%ect the pr$%itabilit!
F#nda(ental analsis c$nsiders the %inancial and ec$n$(ic data that (a
in%l#ence the viabilit $% a c$(pan! There are (an %lav$rs $% %#nda(ental analsis
centered $n s#ch c$ncepts as val#e, &r$'th and t#rnar$#nds! Technical analsis is the
st#d $% the price chart! It ass#(es that b l$$kin& at the pr$&ress $% that little
s6#i&&l line $# can %$recast the %#t#re trend $% a st$ck! F#nda(ental analsis is
essential t$ ($st invest$rs, and technical analsis is essential t$ ($st traders and
spec#lat$rs!
An invest$r 'ith rati$nal and scienti%ic appr$ach 'ill there%$re be interested in
anal9in& the in%l#ence $% the e/pected per%$r(ance $% the c$(pan, ind#str and
BSPATIL 00
FUNDAMENTAL AND TECHNICAL ANALYSIS
ec$n$( as a 'h$le $n share prices, even be%$re takin& the invest(ent decisi$n s#ch
analsis is called %#nda(ental analsis!
F#nda(ental analsis is the (eth$d $% eval#atin& sec#rities b atte(ptin& t$
(eas#re the intrinsic val#e $% a partic#lar st$ck! It is the st#d $% everthin& %r$( the
$verall ec$n$( and ind#str c$nditi$ns, t$ the %inancial c$nditi$n and (ana&e(ent
$% speci%ic c$(panies 7i!e!, #sin& real data t$ eval#ate a st$ck3s val#e8! The (eth$d
#tili9es ite(s s#ch as reven#es, earnin&s, ret#rn $n e6#it and pr$%it (ar&ins t$
deter(ine a c$(pan3s #nderlin& val#e and p$tential %$r %#t#re &r$'th!
=ne $% the (a2$r ass#(pti$ns #nder %#nda(ental analsis is that, even th$#&h
thin&s &et (is priced in the (arket %r$( ti(e t$ ti(e, the price $% an asset 'ill
event#all &ravitate t$'ard its tr#e val#e! This see(s t$ be a reas$nable bet
c$nsiderin& the l$n& #p'ard (arch $% 6#alit st$cks in &eneral despite re&#lar
setbacks and peri$ds $% irrati$nal e/#berance! The ke strate& %$r the %#nda(entalist
is t$ b# 'hen prices are at $r bel$' this intrinsic val#e and sell 'hen the &$t
$verpriced!
TEC3)ICAL A)ALYSIS:
Technical analysis is the e/a(inati$n $% past price ($ve(ents t$ %$recast
%#t#re price ($ve(ents! Technical analsts are s$(eti(es re%erred t$ as chartists
beca#se the rel al($st e/cl#sivel $n charts %$r their analsis!
BSPATIL 0+
FUNDAMENTAL AND TECHNICAL ANALYSIS
M$#in6 A#e+a6e:
A M$vin& Avera&e is an indicat$r that sh$'s the average val#e $% a sec#ritAs
price $ver a peri$d $% ti(e! Fhen calc#latin& a ($vin& avera&e, a (athe(atical
analsis $% the sec#ritAs avera&e val#e $ver a predeter(ined ti(e peri$d is (ade! As
the sec#rities price chan&es, its avera&e price ($ves #p $r d$'n!
There are several p$p#lar 'as t$ calc#late a ($vin& avera&e! Meta St$ck %$r
Eava calc#lates a @si(ple@ ($vin& avera&e..(eanin& that e6#al 'ei&ht is &iven t$
each price $ver the calc#lati$n peri$d!
Inte+9+etati$n:
The ($st p$p#lar (eth$d $% interpretin& a ($vin& avera&e is t$ c$(pare the
relati$nship bet'een ($vin& avera&es $% the sec#ritAs price 'ith the sec#ritAs price
itsel%! A b# si&nal is &enerated 'hen the sec#ritAs price rises ab$ve its ($vin&
avera&e and a sell si&nal is &enerated 'hen the sec#ritAs price %alls bel$' its ($vin&
avera&e!
This tpe $% ($vin& avera&e tradin& sste( is n$t intended t$ &et $# in at the
e/act b$tt$( n$r $#t at the e/act t$p! ?ather, it is desi&ned t$ keep $# in line 'ith
the sec#ritAs price trend b b#in& sh$rtl a%ter the sec#ritAs price b$tt$(s and
sellin& sh$rtl a%ter it t$ps!
The critical ele(ent in a ($vin& avera&e is the n#(ber $% ti(e peri$ds #sed in
calc#latin& the avera&e! Fhen #sin& hindsi&ht, $# can al'as %ind a ($vin& avera&e
that '$#ld have been pr$%itable! The ke is t$ %ind a ($vin& avera&e that 'ill be
c$nsistentl pr$%itable! The ($st p$p#lar ($vin& avera&e is the ;B.'eek 7$r +,,.
da8 ($vin& avera&e! This ($vin& avera&e has an e/cellent track rec$rd in ti(in&
the (a2$r 7l$n&.ter(8 (arket ccles!
Ad#anta6es:
BSPATIL 0;
FUNDAMENTAL AND TECHNICAL ANALYSIS
The advanta&e $% ($vin& avera&e sste( $% this tpe 7i!e!, b#in& and sellin&
'hen prices break thr$#&h their ($vin& avera&e8 is that $# 'ill al'as be $n the
@ri&ht@ side $% the (arketI prices cann$t rise ver (#ch 'ith$#t the price risin& ab$ve
its avera&e price! The disadvanta&e is that $# 'ill al'as b# and sell s$(e late! I%
the trend d$es n$t last %$r a si&ni%icant peri$d $% ti(e, tpicall t'ice the len&th $% the
($vin& avera&e, $# 'ill l$se $#r ($ne!
Su99$+t and Resistance:
S#pp$rt and resistance represent ke 2#nct#res 'here the %$rces $% s#ppl and
de(and (eet! In the %inancial (arkets, prices are driven b e/cessive s#ppl 7d$'n8
and de(and 7#p8! S#ppl is sn$n($#s 'ith bearish, bears and sellin&! De(and is
sn$n($#s 'ith b#llish, b#lls and b#in&! These ter(s are #sed interchan&eabl
thr$#&h$#t this and $ther articles! As de(and increases, prices advance and as s#ppl
increases, prices decline! Fhen s#ppl and de(and are e6#al, prices ($ve side'as
as b#lls and bears sl#& it $#t %$r c$ntr$l!
&hat Is Su99$+t:
S#pp$rt is the price level at 'hich de(and is th$#&ht t$ be str$n& en$#&h t$
prevent the price %r$( declinin& %#rther! The l$&ic dictates that as the price declines
t$'ards s#pp$rt and &ets cheaper, b#ers bec$(e ($re inclined t$ b# and sellers
bec$(e less inclined t$ sell! " the ti(e the price reaches the s#pp$rt level, it is
believed that de(and 'ill $verc$(e s#ppl and prevent the price %r$( %allin& bel$'
s#pp$rt!
S#pp$rt d$es n$t al'as h$ld and a break bel$' s#pp$rt si&nals that the bears
have '$n $#t $ver the b#lls! A decline bel$' s#pp$rt indicates a ne' 'illin&ness t$
sell andJ$r a lack $% incentive t$ b#! S#pp$rt breaks and ne' l$'s si&nal that sellers
have red#ced their e/pectati$ns and are 'illin& sell at even l$'er prices! In additi$n,
b#ers c$#ld n$t be c$erced int$ b#in& #ntil prices declined bel$' s#pp$rt $r bel$'
the previ$#s l$'! =nce s#pp$rt is br$ken, an$ther s#pp$rt level 'ill have t$ be
established at a l$'er level!
BSPATIL 0<
FUNDAMENTAL AND TECHNICAL ANALYSIS
&he+e Is Su99$+t Esta!lished:
S#pp$rt levels are #s#all bel$' the c#rrent price, b#t it is n$t #nc$(($n %$r
a sec#rit t$ trade at $r near s#pp$rt! Technical analsis is n$t an e/act science and it
is s$(eti(es di%%ic#lt t$ set e/act s#pp$rt levels! In additi$n, price ($ve(ents can be
v$latile and dip bel$' s#pp$rt brie%l! S$(eti(es it d$es n$t see( l$&ical t$ c$nsider
a s#pp$rt level br$ken i% the price cl$ses 0J) bel$' the established s#pp$rt level! F$r
this reas$n, s$(e traders and invest$rs establish s#pp$rt 9$nes!
&hat Is Resistance:
?esistance is the price level at 'hich sellin& is th$#&ht t$ be str$n& en$#&h t$
prevent the price %r$( risin& %#rther! The l$&ic dictates that as the price advances
t$'ards resistance, sellers bec$(e ($re inclined t$ sell and b#ers bec$(e less
inclined t$ b#! " the ti(e the price reaches the resistance level, it is believed that
s#ppl 'ill $verc$(e de(and and prevent the price %r$( risin& ab$ve resistance!
?esistance d$es n$t al'as h$ld and a break ab$ve resistance si&nals that the
b#lls have '$n $#t $ver the bears! A break ab$ve resistance sh$'s a ne' 'illin&ness
t$ b# andJ$r a lack $% incentive t$ sell! ?esistance breaks and ne' hi&hs indicate
b#ers have increased their e/pectati$ns and are 'illin& t$ b# at even hi&her prices!
In additi$n, sellers c$#ld n$t be c$erced int$ sellin& #ntil prices r$se ab$ve resistance
$r ab$ve the previ$#s hi&h! =nce resistance is br$ken, an$ther resistance level 'ill
have t$ be established at a hi&her level!
&he+e Is Resistance Esta!lished:
?esistance levels are #s#all ab$ve the c#rrent price, b#t it is n$t #nc$(($n
%$r a sec#rit t$ trade at $r near resistance! In additi$n, price ($ve(ents can be
v$latile and rise ab$ve resistance brie%l! S$(eti(es it d$es n$t see( l$&ical t$
c$nsider a resistance level br$ken i% the price cl$ses 0J) ab$ve the established
resistance level! F$r this reas$n, s$(e traders and invest$rs establish resistance 9$nes!
BSPATIL 0:
FUNDAMENTAL AND TECHNICAL ANALYSIS
S$, Here, Identi%icati$n $% ke s#pp$rt and resistance levels is an essential
in&redient t$ s#ccess%#l technical analsis! Even th$#&h it is s$(eti(es di%%ic#lt t$
establish e/act s#pp$rt and resistance levels, bein& a'are $% their e/istence and
l$cati$n can &reatl enhance analsis and %$recastin& abilities! I% a sec#rit is
appr$achin& an i(p$rtant s#pp$rt level, it can serve as an alert t$ be e/tra vi&ilant in
l$$kin& %$r si&ns $% increased b#in& press#re and a p$tential reversal! I% a sec#rit is
appr$achin& a resistance level, it can act as an alert t$ l$$k %$r si&ns $% increased
sellin& press#re and p$tential reversal! I% a s#pp$rt $r resistance level is br$ken, it
si&nals that the relati$nship bet'een s#ppl and de(and has chan&ed! A resistance
break$#t si&nals that de(and 7b#lls8 has &ained the #pper hand and a s#pp$rt break
si&nals that s#ppl 7bears8 has '$n the battle!
P+ice scillat$+:
The Drice =scillat$r displas the di%%erence bet'een t'$ ($vin& avera&es $% a
sec#ritAs price! The di%%erence bet'een the ($vin& avera&es can be e/pressed in
either p$ints $r percenta&es!
The Drice =scillat$r is al($st identical t$ the MACD, e/cept that the Drice
=scillat$r can #se an t'$ #ser.speci%ied ($vin& avera&es! 7The MACD al'as #ses
0+ and +*.da ($vin& avera&es, and al'as e/presses the di%%erence in p$ints!8
Inte+9+etati$n:
M$vin& avera&e analsis tpicall &enerates b# si&nals 'hen a sh$rt.ter(
($vin& avera&e 7$r the sec#ritAs price8 rises ab$ve a l$n&er.ter( ($vin& avera&e!
C$nversel, sell si&nals are &enerated 'hen a sh$rter.ter( ($vin& avera&e 7$r the
sec#ritAs price8 %alls bel$' a l$n&er.ter( ($vin& avera&e! The Drice =scillat$r
ill#strates the cclical and $%ten pr$%itable si&nals &enerated b these $ne $r t'$
($vin& avera&e sste(s!
P+ice Rate0%0Chan6e:
BSPATIL 0*
FUNDAMENTAL AND TECHNICAL ANALYSIS
The Drice ?ate.$%.Chan&e 7@?=C@8 indicat$r displas the di%%erence bet'een
the c#rrent price and the price /.ti(e peri$ds a&$! The di%%erence can be displaed in
either p$ints $r as a percenta&e! The M$(ent#( indicat$r displas the sa(e
in%$r(ati$n, b#t e/presses it as a rati$!
Inte+9+etati$n:
It is a 'ell.rec$&ni9ed phen$(en$n that sec#rit prices s#r&e ahead and retract
in a cclical 'ave.like ($ti$n! This cclical acti$n is the res#lt $% the chan&in&
e/pectati$ns as b#lls and bears str#&&le t$ c$ntr$l prices!
The ?=C displas the 'ave.like ($ti$n in an $scillat$r %$r(at b (eas#rin&
the a($#nt that prices have chan&ed $ver a &iven ti(e peri$d! As prices increase, the
?=C risesG as prices %all, the ?=C %alls! The &reater the chan&e in prices, the &reater
the chan&e in the ?=C!
The ti(e peri$d #sed t$ calc#late the ?=C (a ran&e %r$( 0.da 7'hich
res#lts in a v$latile chart sh$'in& the dail price chan&e8 t$ +,,.das 7$r l$n&er8!
The ($st p$p#lar ti(e peri$ds are the 0+. and +:.da ?=C %$r sh$rt t$ inter(ediate.
ter( tradin&! These ti(e peri$ds 'ere p$p#lari9ed b 4erald Appel and Fred
Hitschler in their b$$k, St$ck Market Tradin& Sste(s!
The 0+.da ?=C is an e/cellent sh$rt. t$ inter(ediate.ter(
$verb$#&htJ$vers$ld indicat$r! The hi&her the ?=C, the ($re $verb$#&ht the
sec#ritG the l$'er the ?=C, the ($re likel a rall! H$'ever, as 'ith all
$verb$#&htJ$vers$ld indicat$rs, it is pr#dent t$ 'ait %$r the (arket t$ be&in t$ c$rrect
7i!e!, t#rn #p $r d$'n8 be%$re placin& $#r trade! A (arket that appears $verb$#&ht
(a re(ain $verb$#&ht %$r s$(e ti(e! In %act, e/tre(el $verb$#&htJ$vers$ld
readin&s #s#all i(pl a continuation $% the c#rrent trend!
The 0+.da ?=C tends t$ be ver cclical, $scillatin& back and %$rth in a
%airl re&#lar ccle! =%ten, price chan&es can be anticipated b st#din& the previ$#s
ccles $% the ?=C and relatin& the previ$#s ccles t$ the c#rrent (arket
BSPATIL 0-
FUNDAMENTAL AND TECHNICAL ANALYSIS
Relati#e St+en6th Inde; 2RSI5:
The ?elative Stren&th Inde/ 7@?SI@8 is a p$p#lar $scillat$r! It 'as %irst
intr$d#ced b Felles Filder in an article in C$(($dities 7n$' kn$'n as F#t#res8
Ma&a9ine in E#ne, 0B-)!
The na(e @?elative Stren&th Inde/@ is sli&htl (isleadin& as the ?elative
Stren&th Inde/ d$es n$t c$(pare the relative stren&th $% t'$ sec#rities, b#t rather the
internal stren&th $% a sin&le sec#rit! A ($re appr$priate na(e (i&ht be @Internal
Stren&th Inde/!@
Inte+9+etati$n:
Fhen Filder intr$d#ced the ?elative Stren&th Inde/, he rec$((ended #sin& a
0<.da ?elative Stren&th Inde/! Since then, the B.da and +:.da ?elative Stren&th
Inde/s have als$ &ained p$p#larit! The %e'er das #sed t$ calc#late the ?elative
Stren&th Inde/, the ($re v$latile the indicat$r!
The ?elative Stren&th Inde/ is a price.%$ll$'in& $scillat$r that ran&es bet'een
, and 0,,! A p$p#lar (eth$d $% anal9in& the ?elative Stren&th Inde/ is t$ l$$k %$r a
diver&ence in 'hich the sec#rit is (akin& a ne' hi&h, b#t the ?elative Stren&th
Inde/ is %ailin& t$ s#rpass its previ$#s hi&h! This diver&ence is an indicati$n $% an
i(pendin& reversal! Fhen the ?elative Stren&th Inde/ then t#rns d$'n and %alls
bel$' its ($st recent tr$#&h, it is said t$ have c$(pleted a @%ail#re s'in&!@ The
%ail#re s'in& is c$nsidered a c$n%ir(ati$n $% the i(pendin& reversal!
In Mr! FilderAs b$$k, he disc#sses %ive #ses $% the ?elative Stren&th Inde/I
0! T$9s and B$tt$ms< The ?elative Stren&th Inde/ #s#all t$ps ab$ve -, and
b$tt$(s bel$' ;,! It #s#all %$r(s these t$ps and b$tt$(s be%$re the
#nderlin& price chart!
+! Cha+t F$+mati$ns< The ?elative Stren&th Inde/ $%ten %$r(s chart patterns
s#ch as head and sh$#lders $r trian&les that (a $r (a n$t be visible $n the
price chart!
BSPATIL 0)
FUNDAMENTAL AND TECHNICAL ANALYSIS
;! Failu+e S=in6s 7als$ kn$'n as s#pp$rt $r resistance penetrati$ns $r
break$#ts8! This is 'here the ?elative Stren&th Inde/ s#rpasses a previ$#s
hi&h 7peak8 $r %alls bel$' a recent l$' 7tr$#&h8!
<! Su99$+t and Resistance< The ?elative Stren&th Inde/ sh$'s, s$(eti(es
($re clearl than price the(selves, levels $% s#pp$rt and resistance!
:! *i#e+6ences< As disc#ssed ab$ve, diver&ences $cc#r 'hen the price (akes a
ne' hi&h 7$r l$'8 that is n$t c$n%ir(ed b a ne' hi&h 7$r l$'8 in the ?elative
Stren&th Inde/! Drices #s#all c$rrect and ($ve in the directi$n $% the
?elative Stren&th Inde/!
T+end lines:
In the precedin& secti$n, 'e sa' h$' s#pp$rt and resistance levels can be
penetrated b a chan&e in invest$r e/pectati$ns 7'hich res#lts in shi%ts $% the
s#pplJde(and lines8! This tpe $% a chan&e is $%ten abr#pt and @ne's based!@
In this secti$n, 'eAll revie' @trends!@ A trend represents a c$nsistent chan&e in
prices 7i!e!, a chan&e in invest$r e/pectati$ns8! Trends di%%er %r$( s#pp$rtJresistance
levels in that trends represent chan&e, 'hereas s#pp$rtJresistance levels represent
barriers t$ chan&e!
BSPATIL 0B
FUNDAMENTAL AND TECHNICAL ANALYSIS
As sh$'n in the %$ll$'in& chart, a risin& trend is de%ined b s#ccessivel
hi&her l$'.prices! A risin& trend can be th$#&ht $% as a risin& s#pp$rt level..the b#lls
are in c$ntr$l and are p#shin& prices hi&her!
As sh$'n in the ne/t chart, a %allin& trend is de%ined b s#ccessivel l$'er
hi&h.prices! A %allin& trend can be th$#&ht $% as a %allin& resistance level..the bears
are in c$ntr$l and are p#shin& prices l$'er!
The Ba+ Cha+t:
The "ar chart is $ne $% the ($st p$p#lar tpes $% charts #sed in technical
analsis! As ill#strated $n the le%t, the t$p $% the vertical line indicates the hi&hest
price at 'hich a sec#rit traded d#rin& the da, and the b$tt$( represents the l$'est
price! The cl$sin& price is displaed $n the ri&ht side $% the bar and the $penin& price
is sh$'n $n the le%t side $% the bar! A sin&le bar like the $ne t$ the le%t represents $ne
da $% tradin&!
BSPATIL +,
FUNDAMENTAL AND TECHNICAL ANALYSIS
The chart bel$' is an e/a(ple $% a bar chart %$r AT5T 7T8I
The advanta&e $% #sin& a bar chart $ver a strai&ht.line &raph is that it sh$'s
the hi&h, l$', $pen and cl$se %$r each partic#lar da!
Candle stic8s Cha+tin6:
Candlestick charts have been ar$#nd %$r h#ndreds $% ears! The are $%ten
re%erred t$ as @Eapanese candles@ beca#se the Eapanese '$#ld #se the( t$ anal9e the
price $% rice c$ntracts!
Si(ilar t$ a bar chart, candlestick charts als$ displa the $pen, cl$se, dail
hi&h and dail l$'! The di%%erence is the #se $% c$l$r t$ sh$' i% the st$ck 'ent #p $r
d$'n $ver the da!
BSPATIL +0
FUNDAMENTAL AND TECHNICAL ANALYSIS
T6e c6art 5el78 is a+ e9a,ple 7: a ca+;lestic- c6art :7r AT3T .T0&
<ree+ 5ars i+;icate t6e st7c- price r7se1 re; i+;icates a ;ecli+e=
I+4est7rs see, t7 6a4e a >l74e?6ate> relati7+s6ip 8it6 ca+;lestic-
c6arts& Pe7ple eit6er l74e t6e, a+; use t6e, :re@ue+tly 7r t6ey are
c7,pletely tur+e; 7:: 5y t6e,& T6ere are se4eral patter+s t7 l77- :7r 8it6
ca+;lestic- c6arts / 6ere are a :e8 7: t6e p7pular 7+es a+; 86at t6ey ,ea+&
&
BSPATIL ++
This is a b#llish pattern . the st$ck $pened at 7$r near8 its l$' and
cl$sed near its hi&h
FUNDAMENTAL AND TECHNICAL ANALYSIS
P$int and Fi6u+e Cha+t:
The p$int 5 %i&#re 7D5F8 chart is s$(e'hat rare! In %act, ($st chartin&
services d$ n$t even $%%er it! This chart pl$ts da.t$.da increases and declines in
priceI increases are represented b a risin& stack $% @C@s, 'hile decreases are
represented b a declinin& stack $% @=@s! This tpe $% chart 'as traditi$nall #sed %$r
intrada chartin& 7a st$ck chart %$r 2#st $ne da8, (ainl beca#se it can be l$n& and
tedi$#s t$ create a D5F chart (an#all $ver a l$n&er peri$d $% ti(e!
The idea behind D5F charts is that the help $# t$ %ilter $#t less si&ni%icant
price ($ve(ents and t$ %$c#s $n the ($st i(p$rtant trends! "el$' is an e/a(ple $% a
D5F chart %$r AT5T 7T8I
BSPATIL +;
The $pp$site $% the pattern ab$ve, this is a bearish pattern! It
indicates that the st$ck $pened at 7$r near8 its hi&h and dr$pped
s#bstantiall t$ cl$se near its l$'!
>n$'n as @the ha((er@, this is a b#llish pattern $nl i% it $cc#rs
a%ter the st$ck price has dr$pped %$r several das! A s(all b$d al$n&
'ith a lar&e ran&e identi%ies a ha((er! This pattern indicates that a
reversal in the d$'ntrend is in the '$rks!
>n$'n as a @starK! F$r the ($st part, stars tpicall indicate a
reversal and $r indecisi$n! There is a p$ssibilit that a%ter seein& a
star there 'ill be a reversal $r chan&e in the c#rrent trend!
FUNDAMENTAL AND TECHNICAL ANALYSIS
PPULAR C3ARTI)4 PATTER)S:
BSPATIL +<
FUNDAMENTAL AND TECHNICAL ANALYSIS
Technical analsts $%ten #se pr$ven s#ccess%#l price patterns %r$( &reat st$cks
as t$$ls t$ %ind ne' &reat st$cks! LetAs l$$k at a %e' e/a(ples
• Cu9 and 3andle . This is a pattern $n a bar chart that can be as sh$rt as seven
'eeks and as l$n& as *: 'eeks! The c#p is in the shape $% a @U@! The handle
has a sli&ht d$'n'ard dri%t! The ri&ht.hand side $% the pattern has l$' tradin&
v$l#(e! As the st$ck c$(es #p t$ test the $ld hi&hs, the st$ck 'ill inc#r
sellin& press#re b the pe$ple 'h$ b$#&ht at $r near the $ld hi&h! This sellin&
press#re 'ill (ake the st$ck price trade side'as 'ith a tendenc t$'ards a
d$'ntrend %$r an'here %r$( %$#r das t$ %$#r 'eeks, then it 'ill take $%%!
This pattern l$$ks like a p$t 'ith a handle! It is $ne $% the easier
patterns t$ detectG and invest$rs have (ade a l$t $% ($ne #sin& it!
• 3ead and Sh$ulde+s . This is a chart %$r(ati$n rese(blin& an @M@ in 'hich a
st$ckAs priceI
. ?ises t$ a peak and then declines, then
. ?ises ab$ve the %$r(er peak and a&ain declines, and then
. rises a&ain b#t n$t t$ the sec$nd peak and a&ain declines!
The %irst and third peaks are sh$#lders, and the sec$nd peak %$r(s the head!
This pattern is c$nsidered a ver bearish indicat$r!
BSPATIL +:
FUNDAMENTAL AND TECHNICAL ANALYSIS
• *$u!le B$tt$m . This pattern rese(bles a @F@ and $cc#rs 'hen a st$ck price
dr$ps t$ a si(ilar price level t'ice 'ithin a %e' 'eeks $r ($nths! Y$# sh$#ld
b# 'hen the price passes the hi&hest p$int in the handle! In a per%ect d$#ble
b$tt$(, the sec$nd decline sh$#ld n$r(all &$ sli&htl l$'er than the %irst
decline t$ create a shake$#t $% 2itter invest$rs! The (iddle p$int $% the @F@
sh$#ld n$t &$ int$ ne' hi&h &r$#nd! This is a ver "#llish indicat$r!
The belie% is that, a%ter t'$ dr$ps in the st$ck price, the 2itter invest$rs 'ill
be $#t and the l$n&.ter( invest$rs 'ill still be h$ldin& $n!
BSPATIL +*
FUNDAMENTAL AND TECHNICAL ANALYSIS
I(p$rtance $% pr$2ect
0! The pr$2ect &ives th$r$#&h kn$'led&e $% %#nda(ental and technical analsis
+! In this pr$2ect rep$rt the En&ineerin& sect$r is anal9ed b c$nsiderin& b#d&et
and de(and and s#ppl $% the ind#str!
;! In the pr$2ect rep$rt the + c$(panies have selected and anal9ed the
c$(pan3s %#t#re (arket price b t'$ distinct the$ries!
<! ?eader $% this pr$2ect c$(es t$ kn$' the e/pected %#t#re (arket prices and
can invest int$ the scripts!
:! This &ives the %#ll in%$r(ati$n $% calc#lati$n $% intrinsic val#e!
BSPATIL +-
FUNDAMENTAL AND TECHNICAL ANALYSIS
=b2ective $% the st#d
Main $!"ecti#e:
T$ kn$' the %#t#re ($ve(ent $% selected c$(panies shares thr$#&h %#nda(ental and
technical analsis!
Su! $!"ecti#es
o T$ predict the %#t#re price $% the selected c$(panies shares!
o T$ st#d the strate&ies t$ be ad$pted b the retail invest$rs based $n the technical
and %#nda(ental analsis!
o T$ kn$' the %l$$r and cap price $% the st$ck!
o T$ anal9e individ#al c$(pan scrips b c$nsiderin& the %act$rs relatin& t$ the
ec$n$(, ind#str and the respective c$(pan!
o T$ predict invest$r p$siti$ns 7"#, sell 5 h$ld8 based $n hist$rical price trends
and the likel c$(pan pr$spects!
*ata c$llectin6 meth$d$l$6y
The data c$llected %$r the st#d is sec$ndar data! The data I have #sed %$r the st#d
is
0! Hist$rical shares val#e $% the st$cks c$llected %r$( ICICI DI?ECT<C=M!
+! The balance sheet and Inc$(e state(ent &$t %r$( c$(panies 'eb site!
;! S$(e $% the in%$r(ati$n ab$#t the ind#str is c$llected %r$( $ther %inancial
'eb site!
BSPATIL +)
FUNDAMENTAL AND TECHNICAL ANALYSIS
T3E MEASUREME)T TEC3)I'UE
The %$ll$'in& techni6#es are #sed %$r the st#d!
0! Si(ple ($vin& avera&e!
:! E/p$nential ($vin& avera&e 7EMA8
*! The relative stren&th inde/ 7?SI8
-! Lal#e anch$r!
LIMITATI)S F T3E STU*Y:
0! The st#d is li(ited $nl t$ these + sect$rs and < c$(panies!
+! Here, an atte(pt is (ade t$ predict the %#t#re ($ve(ent st$ck! It c$ntains an
ele(ent $% &#ess '$rk
;! Here, I have #sed $nl ; Technical t$$ls t$ predict the ($ve(ent $% Scrips
BSPATIL +B
FUNDAMENTAL AND TECHNICAL ANALYSIS
Technical analysis $% selected sect$+ s$c8s is as %all$=s
Here $# can see the charts $% "HEL, L5T and NIFTY 'hich is desi&ned
7derived8 b MS E/cel sheet! F$r calc#latin& $% ?SI, SMA and EMA + ears
hist$rical cl$sin& prices are #sed! The respective %$r(#las $% SMA, EMA and ?SI is
as %$ll$'s
SMA 2Sim9le M$#in6 A#e+a6e5
A si(ple ($vin& avera&e is %$r(ed b c$(p#tin& the avera&e 7(ean8 price $% a
sec#rit $ver a speci%ied n#(ber $% peri$ds! Fhile it is p$ssible t$ create ($vin&
avera&es %r$( the =pen, the Hi&h, and the L$' data p$ints, ($st ($vin& avera&es
are created #sin& the cl$sin& price! F$r e/a(pleI a :.da si(ple ($vin& avera&e is
calc#lated b addin& the cl$sin& prices %$r the last : das and dividin& the t$tal b :!
E/I i% the cl$sin& prices are as %$ll$'sI 0,, 00, 0+, 0;, 0<, 0-, 0+MMMMM
0,N00N0+N0;N0<O*,
7*,J:8O0+
Here 0+ is a %irst ($vin& avera&e $btained %r$( the &iven cl$sin& prices, ne/t ($vin&
avera&e can be calc#lated b ded#ctin& %irst cl price i!e 0, and addin& ne/t cl! Drice i!e 0- and
a&ain dividin& it b :!
E;9$nential M$#in6 A#e+a6e 2EMA5
In $rder t$ red#ce the la& in SMA, technicians $%ten #se EMA! EMAAs red#ce the la& b
applin& ($re 'ei&ht t$ recent prices relative t$ $lder prices! The 'ei&htin& applied t$ the
($st recent price depends $n the speci%ied peri$d $% the ($vin& avera&e! The sh$rter the
EMAAs peri$d, the ($re 'ei&ht that 'ill be applied t$ the ($st recent price! F$r e/a(pleI a
0,.peri$d EMA 'ei&hs the ($st recent price 0)!0)1 'hile a +,.peri$d EMA 'ei&hs the
($st recent price B!:+1! As s#ch, it 'ill react 6#icker t$ recent price chan&es than a SMA!
HereAs the calc#lati$n %$r(#la
BSPATIL ;,
FUNDAMENTAL AND TECHNICAL ANALYSIS
EMA 2cu++ent5 > 229+ice 2cu++ent50EMA 29+e#55 ; multi9lie+? EMA29+e#5
Fhere, M#ltiplier P +JnN0
n. N#(ber $% das %$r 'hich EMA is calc#lated
I% 'e take the sa(e e/a(ple $% SMA : da EMA is calc#lated as %$ll$'s!
EMAO 70+.008 C ,!*** N 00 O 00!**
Fhere (#ltiplier O +J 7: N08 O ,!***
F$r ne/t EMA 00!** acts as previ$#s EMA and s$ $n
Relati#e St+en6th Inde;<
AnsI Devel$ped b E! Felles Filder and intr$d#ced in his 0B-) b$$k, Ne' C$ncepts
in Technical Tradin& Sste(s the ?elative Stren&th Inde/ is an e/tre(el #se%#l and
p$p#lar ($(ent#( $scillat$r!
Calculation

BSPATIL ;0
FUNDAMENTAL AND TECHNICAL ANALYSIS
BHEL Company Charts
BSPATIL ;+
FUNDAMENTAL AND TECHNICAL ANALYSIS
0! Sh$rt ter( ($vin& avera&es $% "HEL C$(pan!
+! L$n&.ter( ($vin& avera&es $% "HEL C$(pan!

BSPATIL ;;
FUNDAMENTAL AND TECHNICAL ANALYSIS
Interpretati$n %$r sh$rt ter( ($vin& avera&esI
0! The ab$ve chart $% "HEL is $% sh$rt ter( analsis sa %$r e/a(ple 0: das t$
*, das!
+! The ab$ve chart sh$'s s#pp$rt and resistance level 'hich is sh$'n b arr$'
(ark ab$ve!
;! The chart sh$'s the b#in& and sellin& si&nals 'hich is sh$'n in red &reen
and red arr$' (arks and circle is the p$int 'hich speci%ies the e/act price t$
b# $r sell the st$ck!
<! And %r$( ab$ve chart $ne can see the trend line vi$lati$n 'hich is sh$'n b
black arr$' (ark!
Interpretati$n %$r l$n& ter( ($vin& avera&esI
0! As 'e can see %r$( the ab$ve chart the b# and sell levels are ?s 00;, and
?s! +0,,!
+! In the l$n& ter( chart als$ 'e can see a trend vi$lati$n at the sta&e $% 2an
+,,)!
BSPATIL ;<
FUNDAMENTAL AND TECHNICAL ANALYSIS
;! Here in l$n& ter( ($vin& avera&e chart $ne can see that the +: das SMA
&$in& #p'ards and 0+: das EMA c$(in& d$'n'ards! S$ i% in %#t#re the +:
das SMA &$es #p'ards and cr$sses the 0+: das EMA then a&ain the b#ll
r#n rall start!
Tar&et price %$r "HEL acc$rdin& t$ Technical chartsI
0! At the be&innin& $% the chart the s#pp$rt level is ar$#nd ?s! B,, in the ($nth
$% E#ne +,,* and resistance level is at ?s! 00,, in the ($nth $% A#&#st +,,*!
+! a%ter its resistance in a#&#st +,,* at ?s 00,, the st$ck has #nder &$ne %$r
c$ns$lidati$n %$r + ($nths
;! A%ter breakin& its resistance $% ?s! 00,, the st$ck a&ain #nder &$ne %$r
c$ns$lidati$n #p t$ Feb +,,-!
<! =n Fab +,,- the st$ck had resistance $% ?s! 0+,, and %ell d$'n in (arch id
%$r ?s! 0,,, there %$r the ne' s#pp$rt bec$(e ?s! 0,,, and resistance a&ain
?s! 0+,,!
:! =n April +,,- end it cr$ssed its resistance and started rall!
*! In the ($nth $% E#l +,,- it achieved :+ 'eeks hi&h and created a ne'
resistance $% ?s! 0),, and ne' s#pp$rt bec$(e ?s! 0-,,
-! The st$ck 'as $n its li%e ti(e hi&h $% ?s! +)-, $n N$ve(ber +,,-!
)! In the N$ve(ber +,,- the st$ck had resistance $% ?s! +B,, and s#pp$rt 'as
?s! +0,, in the ear +,,- $% =ct$ber!
B! In the ($nth $% Ean +,,) it has br$ken its previ$#s s#pp$rt and started a
bearish r#n!
0,! In the ($nth $% Dec (id +,,- the st$ck vi$lated its trend line!
00! the present s#pp$rt is 0):, and previ$#s resistance is ++,,
Sh$rt ter( tar&et
Ta+6et 9+ices %$+ B3EL
Su99$+t0 ,/11
Resistance0 @,A1
Ta+6et 9+ice0 @,A10,/11>BA1
BSPATIL ;:
FUNDAMENTAL AND TECHNICAL ANALYSIS
The+e %$+ > BA1 ? @,A1> @A11
L$n6 te+m ta+6et
Su99$+t0 ,/A1
Resistance0 @/11
Ta+6et 9+ice0 @/110,/A1>-A1
The+e %$+ > -A1 ? @/11> B.A1
;! 0< das ?SI =F "HEL C=MDANY
Interpretati$nI
0! Here 'e can see that the st$ck has &$ne %$r c$rrecti$n $ver a peri$d and the
present ?SI is ar$#nd :, and 'hich is ver attractive!
+! Fr$( the ab$ve chart 'e can sa that the st$ck is #nder c$ns$lidati$n and it is
a best ti(e t$ enter int$ this script at present (arket price!
BSPATIL ;*
FUNDAMENTAL AND TECHNICAL ANALYSIS
L&T company Charts
BSPATIL ;-
FUNDAMENTAL AND TECHNICAL ANALYSIS
0! Sh$rt ter( ($vin& avera&e $% L5T C$(pan
BSPATIL
FUNDAMENTAL AND TECHNICAL ANALYSIS
+! L$n& ter( ($vin& avera&es $% L5T
Interpretati$n %$r sh$rt ter( ($vin& avera&eI
0! The st$ck is sh$'in& #p'ard trend line %r$( A#& +,,* t$ E#ne +,,-!
+! There is a b# si&nal $n March +,,- at ?s! 0:,, level!
;! Fe can see the a&&ressive "#ll ?#n %r$( Ma +,,- t$ N$v +,,- the st$ck has
al($st d$#ble $n N$v +,,-!
<! There is a sellin& si&nal 'hen 0, das SMA ca(e bel$' <, das EMA!
:! Fr$( Ean +,,) t$ March +,,) there is a declinin& trend line!
*! At the end $% ;0!; +,,) it see(s t$ be vi$lati$n $% trend line!
Interpretati$n %$r l$n& ter( ($vin& avera&eI
0! The l$n& ter( ($vin& avera&e $% L5T st$ck is bit attractive 'hich is sh$'in&
; phases $% "#ll ?#n!
+! The st$ck has sh$'n a acc#(#lati$n %$r the peri$d %r$( Ma +,,* t$ M
+,,- and i((ediatel the #p'ard break $#t happened and the st$ck started
rall!
Tar&et price %$r L5T acc$rdin& t$ Technical chartsI
BSPATIL ;B
FUNDAMENTAL AND TECHNICAL ANALYSIS
Sh$+t te+m ta+6et
Su99$+t0 @/11
Resistance0 BCA1
Ta+6et 9+ice0 BCA10@/11>/A1
The+e %$+ > /A1?BCA1>DDA1
L$n6 te+m ta+6et
Su99$+t0 @/11
Resistance0 DB11
Ta+6et 9+ice0 DB110@/11>,A11
The+e %$+ > DB110,A11>A/11
;! 0< DAYS ?SI =F L5T
BSPATIL <,
FUNDAMENTAL AND TECHNICAL ANALYSIS
?SI $% L5T C$(pan
0! At present the L5T C$(pan ?SI is ver reas$nable and started rall s$ $ne
sh$#ld see the (arket c$nditi$n and invest in the script!
+! The ?SI &$in& #p'ard and at present the ?SI is ar$#nd <: levels!
S$ $ne sh$#ld invest at c#rrent (arket price!
BSPATIL <0
FUNDAMENTAL AND TECHNICAL ANALYSIS
BSPATIL <+
FUNDAMENTAL AND TECHNICAL ANALYSIS
Nifty Charts
0! NIFTY ($vin& avera&es
BSPATIL <;
FUNDAMENTAL AND TECHNICAL ANALYSIS
+! ?SI Calc#lati$n %$r Ni%t
Analysis: 2Sh$+t te+m $+ inte+mediate5
0! I% 'e l$$k at B, da EMA $% Ni%t chart, %$r the past $ne and hal% ear the
trend has been "#llish!
+! Fr$( +,th Ean +,,) $n'ards there has been shi%t in the trend t$'ards "earish!
;! The 0)da EMA 5 SMA $% Ni%t has br$ken d$'n bel$' B, da EMA! S$
this is $ne ($re c$ncl#sive evidence %$r reversal $% trend %r$( "#ll t$ "ear!
Immediate Futu+e:
As 'e can see %r$( the &raph it is clear that (arket is %indin& s#pp$rt at <<:, t$
<*,,7'hich is previ$#s resistance %$r the (arket8! At this level (arket is likel t$
c$ns$lidate %$r the (edi#( ti(e peri$d!
Si6ni%icance $% Futu+e T+end:
In %#t#re #nless and #ntil (arket %inds re6#ired stren&ths t$ c$(e t$ the previ$#s level
i!e! resistance at :*;, P :,, there 'ill be n$ si&ns $% (arket t#rnin& "#llish!
BSPATIL <<
FUNDAMENTAL AND TECHNICAL ANALYSIS
And i% in %#t#re (arket breaks the resistance level i!e! :*;,.:, then it 'ill rall #p t$
C-/10.1@1< 7Tar&et8
L$n6 te+m analysis
0! Market is senti(ent driven and s'in&s and hpes in (arket are s$ str$n& that
the prevail even %$r ears that have happened at present!
+! There has been shi%t in (arket trend and it has t#rned bearish th$#&h there is
n$ clear si&n $% bear trend 7it3s a l$n& ter( c$rrecti$n n$t e/actl bearish8 b#t present
sit#ati$n is $% c$(plete cha$s has le%t (arket in a state $% v$latilit s$ 'e sh$#ld 'ait
and see (arket ($ve(ent cl$sel!
;! Market3s l$n& ter( s#pp$rt is at ;00).;0;, and ne/t s#pp$rt is at <:,, level
s$ ne/t rall %r$( that level <:,, is 0,.0<,,7<:,,.;00,8 and 'e can see s$(e 0:,.
+,, p$ints ab$rtive rall has been $cc#rred and has reached *,:,!
<! At that level (arket 'as 'aitin& %$r c$rrecti$n! "ad cl#es %r$( US sl$' d$'n
had (ade (arket t$ take LT c$rrecti$n and (arket has t#rned t$ be v$latile and has
et t$ settle d$'n at previ$#s s#pp$rt $% <:,,!
Sh$+t te+m analysis:
08 T+end sh$+t te+m $+ inte+mediate t+end %$+ the sc+i9 has !een %lat< )$=
tu+nin6 in t$ !ea+ish<
+8 (ey sh$+t te+m su99$+t and +esistance le#els %$+ the sc+i9<
As 'e can see %r$( the 0, da EMA 5SMA &raph the scrip has established
str$n& s#pp$rt at 0;,.0<, price band!
P+ice m$#ementE the scrip has #nder&$ne (a2$r c$ns$lidati$n 7side'a
($ve(ent8 phase! And it see(s that the scrip has (ade ab$rtive atte(pt t$
breach the %lat trend and start rall, b#t in vain and the $bvi$#s reas$n %$r this
%ail#re is (arket crash!
In the ($nth Feb +,,) the scrip has br$ken the ke s#pp$rt 70;,.0<,8 and
t#rned $#t t$ be bearish
BSPATIL <:
FUNDAMENTAL AND TECHNICAL ANALYSIS
Futu+eE as the scrip has alread br$ken the ke s#pp$rt, the sh$rt ter( traders
sh$#ld sell it and the %resh b# si&nal %$r the st$ck is kn$'n $nl 'hen scrip
establishes s#pp$rt!
I% in case scrip re&ains the stren&th t$ c$(e back t$ the level $% 0;,.0<,,
invest$rs sh$#ld still 'ait till it clearl breaches ab$ve that level b#t 'ith
e/pandin& v$l#(e!
T+adin6 tactics %$+ sh$+t te+m in#est$+s:
As it can be clearl seen %r$( the &raph, the st$ck is p#rel a tradin& st$ck! S$
t$ trade in the scrip $ne sh$#ld l$$k %$r ke s#pp$rt and als$ l$$k %$r c#e %r$(
?SI! I% the st$ck is at s#pp$rt and sellin& press#re is hi&h i!e! ?SI val#e ;, and
bel$', it sh$#ld be b$#&ht and s$ld at hi&h b#in& press#re i!e! at ?SI val#e
-, 5 ab$ve!
Here the identi%in& %#t#re tar&et price 7%$r the sh$rt ter(8 is ver di%%ic#lt as
scrip 'as #nder&$in& phase $% c$ns$lidati$n and has n$ established resistance
level!
F#nda(ental analsis $% selected sect$r s$cks is as %all$'s
Fundamental analysis
The basic p#rp$se $% b#in& a sec#rit is t$ earn dividends and #lti(atel sell
it at hi&her price! An invest$r there%$re is interested in $btainin& esti(ates $% %#t#re
prices $% the share! These in t#rn 'ill depend #p$n the per%$r(ance $% the ind#str t$
'hich the c$(pan bel$n&s and the &eneral ec$n$(ic sit#ati$n $% the c$#ntr! The
(#ltit#de $% %act$rs a%%ectin& a c$(pan3s pr$%itabilit can be br$adl classi%ied asI
0! Ec$n$(ic 'ide %act$rsI these incl#des the %act$rs like &r$'th rate $% the
ec$n$(, the rate $% in%lati$n, %$rei&n e/chan&e rates etc 'hich a%%ects
pr$%itabilit $% all c$(panies!
BSPATIL <*
FUNDAMENTAL AND TECHNICAL ANALYSIS
+! Ind#str 'ide %act$rsI these incl#de %act$rs 'hich are speci%ic t$
ind#str t$ 'hich the c$(pan bel$n&s! F$r instance the de(and s#ppl &ap
in the ind#str, the e(er&ence $% s#bstit#tes, and chan&es in &$vern(ent
p$licies t$'ards ind#str a%%ects the c$(pan bel$n&in& t$ an ind#str!
;! C$(pan 'ide %act$rI these %act$rs are speci%ic t$ a %ir(! The %ir(
speci%ic %act$rs like plant and (achiner, the brand i(a&e $% the pr$d#ct, and
abilit $% the (ana&e(ent t$ a%%ect the pr$%itabilit!
Ec$n$(ic 'ide %act$rs
The %$ll$'in& are the s$(e $% the i(p$rtant ec$n$(ic %act$rs 'hich in%l#ence the
invest(ent $% invest$r $ver a peri$d $% ti(e!
Indian Ec$n$my #e+#ie=
IndiaAs ec$n$( is $n the %#lcr#( $% an ever increasin& &r$'th c#rve! Fith
p$sitive indicat$rs s#ch as a stable ).B per cent ann#al &r$'th, risin& %$rei&n
e/chan&e reserves, a b$$(in& capital (arket and a rapidl e/pandin& FDI in%l$'s,
India has e(er&ed as the sec$nd %astest &r$'in& (a2$r ec$n$( in the '$rld!
The ec$n$( has been &r$'in& at an avera&e &r$'th rate $% )!) per cent in
the last %$#r %iscal ears 7+,,;.,< t$ +,,*.,-8, 'ith the +,,*.,- &r$'th rate $% B!*
per cent bein& the hi&hest in the last 0) ears! Si&ni%icantl, the ind#strial and service
BSPATIL <-
FUNDAMENTAL AND TECHNICAL ANALYSIS
sect$rs have been c$ntrib#tin& a (a2$r part $% this &r$'th, s#&&estin& the str#ct#ral
trans%$r(ati$n #nder'a in the Indian ec$n$(!
F$r e/a(ple, ind#strial and services sect$rs have l$&&ed in a 0,!*; and 00!0)
per cent &r$'th rate in +,,*.,- respectivel, a&ainst )!,+ per and 00!,0 cent in +,,:.
,*! Si(ilarl, (an#%act#rin& &re' b )!B) per cent and 0+ per cent in +,,:.,* and
+,,*.,- and transp$rt, st$ra&e and c$((#nicati$n rec$rded a &r$'th $% 0<!*: and
per cent 0*!*< per cent, respectivel!
An$ther si&ni%icant %eat#re $% the &r$'th pr$cess has been the c$nsistentl
increasin& savin&s and invest(ent rate! Fhile the &r$ss savin& rate as a pr$p$rti$n $%
4DD has increased %r$( +;!: per cent in +,,0.,+ t$ ;<!) per cent in +,,*.,-, the
invest(ent rate.re%lected as the &r$ss capital %$r(ati$n as a pr$p$rti$n $% 4DD.has
increased %r$( ++!) per cent in +,,0.,+ t$ ;:!B per cent in +,,*.,-!
The Cu++ent Fiscal Yea+
The pr$cess c$ntin#es in the c#rrent %iscal ear! =n the back $% B!B per cent &r$'th in
the %irst hal% $% +,,*.,-, 4DD &re' b B!0 per cent d#rin& April.Septe(ber +,,-!
• Fhile $verall ind#strial pr$d#cti$n &re' b B per cent d#rin& April.Dece(ber
+,,-, i(p$rtantl capital &$$ds pr$d#cti$n r$se b +,!+ per cent c$(pared t$
0)!* per cent d#rin& sa(e peri$d in +,,*!
• Services &re' b 0,!: per cent in April.Septe(ber +,,-, $n the back $% 00!*
per cent d#rin& the c$rresp$ndin& peri$d in +,,*.,-!
• Man#%act#rin& &re' b B!* per cent d#rin& April.Dece(ber +,,-, $n the back
$% 0+!+ per cent &r$'th d#rin& sa(e peri$d in +,,*.,-!
• C$re in%rastr#ct#re sect$r c$ntin#ed its &r$'th rate rec$rdin& * per cent
&r$'th in April.N$ve(ber +,,-!
BSPATIL <)
FUNDAMENTAL AND TECHNICAL ANALYSIS
• Fhile e/p$rts &re' b +0!-* per cent d#rin& April.Dece(ber +,,-, i(p$rts
increased b +:!B- per cent in the sa(e peri$d!
• M$ne S#ppl 7M;8 has &r$'n b a r$b#st ++!) per cent &r$'th 7ear.$n.
ear8 as $% Dece(ber +0, +,,- c$(pared t$ 0B!; per cent last ear!
• The ann#al in%lati$n rate in ter(s $% FDI 'as ;!: per cent %$r the 'eek ended
Dece(ber +B, +,,- as c$(pared t$ :!)B per cent a ear a&$!
• Fiscal and reven#e de%icit decreased b 00 per cent and 0-!+ per cent,
respectivel, d#rin& April.N$ve(ber +,,-.,) $ver c$rresp$ndin& peri$d last
ear!
Fith s#ch a r$b#st &r$'th rates, the advance esti(ates $% the Central Statistical
=r&ani9ati$n 7CS=8 e/pects the ec$n$( t$ &r$' b )!- per cent in +,,-.,)!
Pe+ Ca9ita Inc$me
Al$n& this si&ni%icant accelerati$n in the &r$'th rate $% Indian ec$n$(, IndiaAs per
capita inc$(e has increased at a rapid pace, e/ceedin& an earlier %$recast (ade b
4$ld(an Sachs "?IC rep$rt 'hich esti(ated IndiaAs per capita t$ t$#ch USH ),, b
+,0, and USH 00<B b +,0:!
Der capita inc$(e has increased %r$( USH <*, in +,,,.,0 t$ al($st d$#ble t$ USH
-B- b the end $% +,,*.,-! In +,,-.,), IndiaAs per capita inc$(e is esti(ated t$ be
$ver USH )+:!,-, acc$rdin& t$ the advance esti(ates $% the Central Statistical
=r&anisati$n 7CS=8! F#rther, IndiaAs per capita inc$(e is e/pected t$ increase t$ USH
+,,, b +,0*.0- and USH <,,, b +,+:! This &r$'th rate 'ill, c$nse6#entl, pr$pel
India int$ the (iddle.inc$(e cate&$r!
S$me 3i6hli6hts
BSPATIL <B
FUNDAMENTAL AND TECHNICAL ANALYSIS
?e%lectin& the %av$rable pr$spect $% &r$'th rate $% Indian ec$n$(, the $rders
received Indian c$(panies have increased b a 'h$ppin& *)!* per cent t$ USH ;+!<)
billi$n d#rin& Ean#ar.=ct$ber +,,- c$(pared t$ USH 0B!+* billi$n in the sa(e
peri$d last ear!
• India is a($n& the %ive c$#ntries sharin& :, per cent $% the '$rld pr$d#cti$n
7$r 4DD8!
• FDI in%l$'s have 2#(ped b al($st three ti(es t$ USH 0:!- billi$n in +,,*.,-
as a&ainst USH :!: billi$n in +,,:.,*!
• The a&&re&ate inc$(e $% the t$p :,, c$(panies r$se b +)!< per cent in +,,*.
,- t$ t$tal USH <*B!:0 billi$n!
• IndiaAs Nati$nal St$ck E/chan&e 7NSE8 ranks %irst in the st$ck %#t#res and
sec$nd in inde/ %#t#res trade in the '$rld!
• T'ent Indian %ir(s have (ade it t$ the list $% "$st$n C$ns#ltin& 4r$#pAs 0,,
Ne' 4l$bal Challen&er 4iants list!
• Acc$rdin& t$ a st#d b the Mc>inse 4l$bal Instit#te 7M4I8, IndiaAs
c$ns#(er (arket 'ill be the '$rldAs %i%th lar&est 7%r$( t'el%th8 in the '$rld
b +,+:!
• The n#(ber $% c$(panies inc$rp$rated has increased at an ann#al avera&e $%
::,,,, c$(panies in the last t'$ ears t$ )*:,,,,, %r$( -0+,,,, c$(panies at
the end $% +,,:!
• F$#r Indians and seven Indian (icr$%inance c$(panies (ake it t$ the F$rbes
list $% T$p0, '$rldAs 'ealthiest CE=s F$rldAs T$p :, Micr$%inance
Instit#ti$ns, respectivel!
• India has the ($st n#(ber $% private e6#it 7DE8 %#nds $peratin& a($n&st the
"?IC (arkets!
• M#(bai has been ranked tenth a($n& the '$rldAs bi&&est centers $%
c$((erce in ter(s $% the %inancial %l$' v$l#(es b a s#rve c$(piled b
MasterCard F$rld'ide!
An$ther si&ni%icant aspect has been the br$ad.based nat#re $% the &r$'th pr$cess!
Fhile ne' ec$n$( ind#stries like In%$r(ati$n Techn$l$& and bi$techn$l$& have
BSPATIL :,
FUNDAMENTAL AND TECHNICAL ANALYSIS
been &r$'in& ar$#nd ;, per cent, si&ni%icantl $ld ec$n$( sect$rs like steel have
als$ been (a2$r c$ntrib#t$rs in the Indian &r$'th pr$cess! F$r e/a(ple, India has
($ved #p t'$ places t$ bec$(e the %i%th lar&est steel pr$d#cer in the '$rld!
And 'ith its (an#%act#rin& and service sect$rs $n a searin& &r$'th path, Leh(an
"r$thers Asia esti(ates India t$ &r$' b as (#ch as 0, per cent ever ear in the ne/t
decade!
,< 4+$=th +ate $% indust+ial sect$+:
The &r$'th $% ind#strial sect$r is an i(p$rtant c$ntrib#t$r t$ the &r$'th $%
nati$nal inc$(e! The per%$r(ance and the &r$'th $% ind#str is (eas#red thr$#&h an
Inde/ $% ind#strial pr$d#ct! The ind#strial &r$'th rate is %#rther disa&&re&ated int$
&r$'th rates $% di%%erent sect$rs like electricit basic &$$ds c$ns#(er &$$ds and s$
Indust+y
Indust+y
Y$Y F chan6e FY11 FY1, FY1@ FY1B FY1D FY1A FY1C FY1.
Minin& 5
Q#arrin& 0 ;!- ,!: :!) :!; <!< 0 :
Electricit -!; < ;!0 ;!+ : :!+ :!+ *!:
Man#%act#rin& -!+ :!< +!B * -!< B!0 B!0 0,!-
IIP C<C A<, @<C A</ . /<D /<@ -<.
@< In%lati$n
In%lati$n prevailin& in the ec$n$( has c$nsiderable i(pact $n the
per%$r(ance $% the c$(panies hi&h rates $% in%lati$n #psets b#siness plans, res#lts in
hi&h inp#t c$sts and hence red#cti$n in pr$%it (ar&ins! =n the $ther hand the in%lati$n
er$des p#rchasin& p$'er $% b#er and res#lts in red#cti$n in de(and %$r &$$ds! The
de(and %$r c$ns#(er &$$ds 'ill partic#larl be a%%ected adversel!
In%lati$n is (eas#red b s#stainable price inde/ n#(ber! The 'h$le sale price
inde/ n#(ber is &enerall #sed %$r this p#rp$se!
BSPATIL :0
FUNDAMENTAL AND TECHNICAL ANALYSIS
Yea+ In%lati$n +ate 2c$nsume+ 9+ices5 Ran8 Pe+cent Chan6e *ate $% In%$+mati$n
+,,; :!<, 1 *< +,,+ est!
+,,< ;!), 1 B+ .+B!*; 1 +,,; est!
+,,: <!+, 1 0;< 0,!:; 1 +,,< est!
+,,* <!+, 1 0+: ,!,, 1 +,,: est!
+,,- :!;, 1 0;B +*!0B 1 +,,* est!
B< Inte+est +ates
Interest rates re%lect the c$st and availabilit $% credit t$ the c$(panies
$peratin& in the ec$n$(! The interest rates and the v$l#(e as 'ell as directi$n $% the
credit s#ppl in the ec$n$( is in%l#enced b ($nit$r p$lic $% the reserve bank $%
India 7?"I8! I% the cheap ($ne p$lic is p#rs#ed the interest rates are likel t$ be
l$'er and lar&er v$l#(e $% ($ne s#ppl is e/pected t$ be there in the ec$n$(!
The l$'er rate $% interest i(plies l$'er c$st $% %inancin& the c$(pan3s
$perati$ns and ass#res hi&her pr$%itabilit, hi&her the rate $% interest hi&her 'ill be the
c$sts $% (an#%act#rin& and sale, 'hich is e/pected t$ lead l$'er pr$%it!
Interest ?ates
2F 9e+ annum5 @0A9+ B0A9+ D0A9+ A0A9+ C0A9+ C0*ec
Cash ?eserve ?ati$ :!: <!) <!: : : :!;
"ank ?ate *!: *!; * * * *
?everse ?ep$ rate
7Abs$rpti$n rate8 * : <!: <!) :!: *
?ep$ rate 7In2ecti$n rate8 ) - * * *!: -!;
ID"I MT lendin& rate 0+!: 0+!: 0,!; 0,!; 0,!; 0,!;
DL? $% : (a2$r banks 00!,.0+!, 0,!).00!: 0,!;.00!, 0,!;.0,!) 0,!;.0,!) 00!,.00!:
BSPATIL :+
FUNDAMENTAL AND TECHNICAL ANALYSIS
Dep$sit rate $% : (a2$r
banks 7(at#ritR0ear8 -!,.)!: :!;.*!+ :!,.:!: :!;.*!; *!,.-!, *!).)!,
Avera&e call ($ne rate ;!*.-!: +!,.:!0 +!0.<!: ;!;.:!: <!+.*!+ :!<.0+!,
D< F$+ei6n e;chan6e +ates
I% c$(pan is (a2$r e/p$rter $r i(p$rter its per%$r(ance and pr$%itabilit are
likel t$ be a%%ected c$nsiderabl b the e/chan&e rates $% r#pee a&ainst $ther
c#rrencies! A depreciati$n $% r#pee a&ainst US $r $ther c#rrenc 'ill (ake Indian
pr$d#cts ($re c$(petitive price 'ise! In the %$rei&n (arkets, thereb sti(#latin&
e/p$rt %r$( India
A< 4$#e+nment !ud6et<
The &$vern(ent b#d&et pr$vides detailed in%$r(ati$n $n each $% c$(p$nents
$% &$vern(ent spendin& and reven#es! The de%icit is essentiall the e/cess $%
&$vern(ent spendin& $n reven#es! A b#d&et de%icit is $%ten inc#rred %$r creatin&
in%rastr#ct#ral %acilities in the ec$n$( tends t$ create in%lati$nar press#re! D#e t$
this there is a str$n& p#blic $pini$n a&ainst the &$vern(ents creatin& $% de%icit
'ith$#t e/pandin& the reven#e!
C< Sa#in6s and in#estment!
The capital (arket is channel thr$#&h 'hich the savin&s $% h$#seh$lds are
(ade available t$ c$rp$rate %$r invest(ent! There%$r the trends in savin& and
invest(ent are si&ni%icant in st#din& their i(pact $n capital (arket!
Savin&s and Invest(ent
F t$ 4*P at c$nstant
9+ices FY1, FY1@ FY1B FY1D FY1A FY1C
B! "ector
H$#seh$ld Savin&s +0!; +0!+ ++ +;!0 +;!: ++
BSPATIL :;
FUNDAMENTAL AND TECHNICAL ANALYSIS
Drivate C$rp$rate Sect$r <!: <!0 ;!* <!0 <!< <!)
D#blic Sect$r .,!B .0!- .+ .,!- 0 +!+
B! t!#e" o$ a""et"
Dhsical Assets 0,!- 00 00!+ 0+!- 0+ 00!-
Financial Assets 0,!: 0,!+ 0,!) 0,!< 00!: 0,!;
4+$ss *$mestic Sa#in6s @D<- @B<C @B<C @C<A @/<- @-<,
Net Capital In%l$' 0!0 ,!* ,!+ .0!+ .0!* 0
4r$ss D$(estic Invest(ent +<!; +< +<!) +:!; +-!+ ;,!0
Err$rs and =(issi$n 0 0!0 .+!0 ,!0 0 0!*
4+$ss Ca9ital F$+mati$n @B<B @B</ @@<@ @A @.<D B1<@

Indust+ial analysis
En6inee+in6:
En&ineerin& is a diverse ind#str 'ith a n#(ber $% se&(ents! A c$(pan %r$(
this sect$r can be a p$'er e6#ip(ent (an#%act#rer 7like trans%$r(ers and b$ilers8,
e/ec#ti$n specialist $r a niche plaer 7like pr$vidin& envir$n(ent %riendl s$l#ti$ns8!
It can be an electrical, n$n.electrical (achiner and static e6#ip(ent (an#%act#rer
t$$
The sect$r is relativel less %ra&(ented at the t$p, as c$(petencies re6#ired
are hi&h! "#t it is hi&hl %ra&(ented at the l$'er end 7like #nbranded trans%$r(ers %$r
the retail se&(ent8 and is d$(inated b s(aller plaers! The #ser ind#stries in br$ad
ter(s are p$'er #tilities 7&enerati$n, trans(issi$n and distrib#ti$n8, ind#strial (a2$rs
7re%inin&, a#t$($tive and te/tiles8, &$vern(ent 7p#blic invest(ent8 and retail
c$ns#(ers 7p#(ps and ($t$rs8!
=rder b$$k si9e deter(ines the per%$r(ance $% the c$(pan in the sh$rt t$
(edi#(.ter(! In $rder t$ ba& bi& c$ntracts, c$(panies need t$ have a bi& balance
BSPATIL :<
FUNDAMENTAL AND TECHNICAL ANALYSIS
sheet si9e and pr$ven e/ec#ti$n capabilities! The need h#&e '$rkin& capital in $rder
t$ e/ec#te bi&&er c$ntracts, as initiall the receive $nl part pa(ent and the
re(ainin& c$(es as pr$2ects &et e/ec#ted!
Tari%%s that earlier $%%ered pr$tecti$n t$ Indian capital &$$ds (an#%act#rers,
have been re($ved! I(p$rt d#ties $n a ran&e $% e6#ip(ents have als$ been red#ced!
This c$#pled 'ith the hi&h c$st $% capital in India p#ts Indian (an#%act#rers at a
disadvanta&e a&ainst $verseas c$(petiti$n!
D$'er sect$r c$ntrib#tes the lar&est t$ the en&ineerin& c$(paniesA reven#es!
F$r instance, A"" and "HEL derive *,1 and -+1 $% their reven#es %r$( s#pplin&
e6#ip(ents t$ the p$'er sect$r! And 'ith the &$vern(ent plannin& t$ add lar&e
&enerati$n capacities in the eleventh 7+,,-.0+8 %ive.ear plan, the p$tential see(s
h#&e %$r the en&ineerin& (a2$rs! This is beca#se, apart %r$( the invest(ent in
&enerati$n capacit b#ild#p, an e6#ivalent a($#nt is likel t$ be spent in the
trans(issi$n and distrib#ti$n space as 'ell!
In%rastr#ct#re is an$ther ke area $% $perati$n %$r (a2$r Indian en&ineerin&
c$(panies! L5T, %$r e/a(ple, &arners ar$#nd ;,1 $% its sales %r$( in%rastr#ct#re
activities like en&ineerin&, desi&n and c$nstr#cti$n $% ind#strial pr$2ects and s$cial 5
phsical pr$2ects like h$#sin&, h$spitals, IT parks, e/press'as, brid&es, p$rts, and
'ater 5 e%%l#ent treat(ent pr$2ects!
The hi&h &l$bal cr#de prices $n acc$#nt $% &r$'in& de(and has led t$ increased
activities in the e/pl$rati$n and devel$p(ent space! This has helped the en&ineerin&
c$(panies in this space! M$re i(p$rtantl, this se&(ent $% the en&ineerin& b#siness
has relativel hi&her (ar&ins than in%rastr#ct#re, $'in& t$ ($re c$(ple/ tasks
inv$lved!
(ey P$ints
BSPATIL ::
FUNDAMENTAL AND TECHNICAL ANALYSIS
Su99ly: Ab#ndant s#pplies available acr$ss ($st se&(ents, e/cept %$r techn$l$&
intensive e/ec#ti$ns
*emand: De(and &r$'th in this sect$r is %#elled b e/pendit#re in c$re sect$rs s#ch
as p$'er, rail'as, in%rastr#ct#re devel$p(ent, private sect$r invest(ents and the
speed at 'hich the pr$2ects are i(ple(ented!
Ba++ie+s t$ ent+y: "arriers t$ entr are hi&h at #pper end $% the ind#str as skilled
(anp$'er and techn$l$&ies, and abilit t$ %#nd lar&e pr$2ects are a prere6#isite
Ba+6ainin6 9$=e+ $% su99lie+s: "ar&ainin& p$'er $% s#ppliers is l$' beca#se $%
intense c$(petiti$n! H$'ever, in techn$l$& driven hi&h.end se&(ents, s#ppliers
have the #pper hand!
Ba+6ainin6 9$=e+ $% cust$me+s: "ar&ainin& p$'er %$r techn$l$& driven se&(ents
is l$'!
C$m9etiti$n: Ma2$rit $% the c$(panies c$(pete in ter(s $% pricin&, e/perience in
speci%ic %ield, pr$d#ct di%%erentiati$n and ti(el c$(pleti$n $% pr$2ects!
Financial Yea+ G1.
FY,- pr$ved t$ be et an$ther &$$d ear %$r the Indian en&ineerin& and
capital &$$ds ind#str! Str$n& &r$'th in ind#strial and (an#%act#rin& ind#stries
re%lected in the pickin& #p $% invest(ent activities in areas like p$'er, in%rastr#ct#re
and pr$cesses! The capital &$$ds inde/ rec$rded str$n& &r$'th d#rin& the entire ear,
th$#&h 'ith s$(e blips d#rin& the ($nths Septe(ber and =ct$ber +,,*!
The $rder b$$ks $% al($st all c$(panies 'itnessed health &r$'th! F$r
en&ineerin& (a2$rs like "HEL and L5T, at the end $% March +,,-, the val#e $%
$#tstandin& $rders st$$d at nearl ; ti(es and + ti(es respective FY,- reven#es! In
&eneral, the &r$'th in $rder b$$k ca(e %r$( b$th p$'er and ind#strial b#sinesses!
BSPATIL :*
FUNDAMENTAL AND TECHNICAL ANALYSIS
The c$(panies 'ere able t$ ba& internati$nal $rders! The t$pline $% the en&ineerin&
(a2$rs 'itnessed d$#ble.di&it &r$'th d#rin& the %iscal!
Fhile the ind#str c$ntin#ed the trend $% c$st c#ttin& thr$#&h red#cin& debt
and restr#ct#rin& $perati$ns and (anp$'er rati$nali9ati$n, risin& inp#t c$sts dented
pared the i(pr$ve(ent in pr$%itabilit! Sharp rise in c$sts $% steel and cr#de $n the
back $% b#$ant &l$bal de(and and inade6#ate s#pplies, 'as the bi&&est da(pener t$
pr$%it &r$'th
The %iscal als$ 'itnessed (a2$rs like S#9l$n and Cr$(pt$n 4reaves chart $#t
a&&ressive ac6#isiti$ns in the internati$nal arena! The (a2$r %$c#s area %$r these
c$(panies 'as t$ %ill in the niches b 'a $% ac6#irin& ne' techn$l$&ies and clients
and havin& a diversi%ied &e$&raphical presence!
Bud6et @11/01-:
F$rld.class in%rastr#ct#re has e(er&ed as $ne $% the ($st i(p$rtant
necessities %$r #nleashin& hi&h and s#stained &r$'th and alleviati$n $% p$vert in an
ec$n$(! And 'ith p$$r in%rastr#ct#re t$ s#pp$rt $ther &r$'th initiatives, the Indian
ec$n$( c$ntin#es t$ be a la&&ard 'hen c$(pared t$ its devel$pin& peers! Fr$( a
p$lic perspective, h$'ever, there has been a &r$'in& c$nsens#s that a private.p#blic
partnership is re6#ired t$ re($ve di%%ic#lties c$ncernin& the devel$p(ent $%
in%rastr#ct#re in the c$#ntr! The realisati$n %inall see(s t$ be settin& in! This (akes
the %#t#re $% the Indian en&ineerin& sect$r e/tre(el bri&ht! Apart %r$( hi&h'a
devel$p(ent and c$nstr#cti$n and ($dernisati$n $% airp$rts, the p$tential %$r the
sect$r lies in the $il and &as space, 'here hi&h &l$bal de(and has led t$ increased
acti$n in e/pl$rati$n and pr$d#cti$n activities! H$'ever, scale and e/ec#ti$n
capabilities re(ain the (antras %$r s#ccess
Bud6et Measu+es
BSPATIL :-
FUNDAMENTAL AND TECHNICAL ANALYSIS
0! F$#rth UMDD at Tilaia t$ be a'arded sh$rtlG Chhattis&arh, >arnataka,
Maharashtra, =rissa and Ta(ilnad# #r&ed t$ brin& %ive ($re UMDDs t$ the
biddin& sta&e b e/tendin& the re6#ired s#pp$rt
+! ?a2iv 4andhi 4ra(een Lid#tikaran Y$2ana t$ be c$ntin#ed d#rin& the
Eleventh Dlan peri$d 'ith a capital s#bsid $% ?s +), bnG all$cati$n $% ?s ::
bn %$r FY,B!
;! ?s ) bn t$ be pr$vided %$r Accelerated D$'er Devel$p(ent and ?e%$r(s
Dr$2ect 7ADD?D8 in FY,B
<! Dr$p$sal t$ set #p a nati$nal %#nd %$r trans(issi$n and distrib#ti$n 7T5D8
re%$r( in the p$'er sect$r
:! E/e(pti$n %r$( <1 additi$nal d#t $% c#st$(s has been 'ithdra'n $n p$'er
&enerati$n pr$2ects 7$ther than (e&a p$'er pr$2ects8, trans(issi$n, s#b
trans(issi$n and distrib#ti$n pr$2ects, and speci%ied &$$ds %$r hi&h v$lta&e
trans(issi$n pr$2ects
*! C#st$( d#t $n pr$2ect i(p$rts red#ced %r$( -!:1 t$ :1
-! Initiatives like skill devel$p(ent pr$&ra((e and settin& #p $% ind#strial
trainin& instit#tes t$ be taken
)! De%ense all$cati$n t$ be increased b 0,1
B! E/cise d#t bein& e/e(pted $n end.#se basis, $n re%ri&erati$n e6#ip(ent
7c$nsistin& $% c$(press$r, c$ndenser #nits, evap$rat$r, etc8 ab$ve + T? 7t$nne
re%ri&erati$n8 #tilisin& p$'er $% :, >F and ab$ve
0,! Darent c$(pan all$'ed t$ set.$%% the dividend received %r$( its s#bsidiar
c$(pan a&ainst dividend distrib#ted b the parent c$(panG pr$vided that
the dividend received has s#%%ered DDT and the parent c$(pan is n$t a
s#bsidiar $% an$ther c$(pan!
Bud6et Im9act
,< A&&ressiveness in all$ttin& UMDDs t$ pr$spective bidders e/pected t$ be
help%#l %$r en&ineerin& c$(panies pr$vidin& e6#ip(ents and EDC services %$r
p$'er plants!
BSPATIL
FUNDAMENTAL AND TECHNICAL ANALYSIS
@< Settin& #p $% a nati$nal %#nd %$r T5D re%$r(s t$ aid &r$'th pr$spects $%
e6#ip(ent s#ppliers and T5D pr$2ect devel$pers!
B< ?e($val $% e/e(pti$n %r$( additi$nal c#st$(s d#t $n p$'er &enerati$n,
trans(issi$n and distrib#ti$n pr$2ects t$ increase c$st %$r c$(panies i(p$rtin&
s#ch pr$2ects, 'hich shall c$nse6#entl be bene%icial %$r d$(estic pr$2ect
devel$pers! H$'ever, $n the $ther hand, red#cti$n in c#st$( d#t $n pr$2ect
i(p$rts t$ n#lli% the i(pact!
D< Initiatives like skill devel$p(ent pr$&ra((e and settin& #p $% ind#strial
trainin& instit#tes t$ red#ce talent cr#nch %$r en&ineerin& c$(panies, 'hich
are rep$rtin& hi&h levels $% attriti$n
A< Increase in de%ense all$cati$n t$ aid pr$spect $% c$(panies pr$vidin& de%ense
e6#ip(ents and techn$l$&ies
C$m9any Im9act:
0! All$cati$n $% UMDDs t$ s#pp$rt &r$'th i% e6#ip(ent and service pr$viders
like "HEL, L5T!
+! 4reater %$c#s $n the T5D %r$nt t$ be bene%icial %$r A"", Sie(ens, Cr$(pt$n
4reaves, E(c$, "harat "i2lee! Als$, c$(panies pr$vidin& T5D pr$2ect
services like E$ti Str#ct#res and >alpatar# Trans(issi$n t$ bene%it!
;! ?e($val $% e/e(pti$n %r$( additi$nal c#st$(s d#t $n p$'er &enerati$n,
trans(issi$n and distrib#ti$n pr$2ects t$ bene%it d$(estic c$(panies i!e
"HEL and L5T!
<! Skill devel$p(ent initiatives t$ pare press#re $% attriti$n %r$( c$(panies like
L5T and "HEL!
:! Increase in de%ense all$cati$n t$ aid pr$spects $% L5T and "harat Electr$nics!
BSPATIL :B
FUNDAMENTAL AND TECHNICAL ANALYSIS
Bud6et $#e+ the yea+s:
Bud6et @11A01C Bud6et @11C01. Bud6et @11.01/
A special p#rp$se vehicle
7SDL8 t$ be la#nched t$
%inance in%rastr#ct#re
pr$2ects that are
%inanciall viable!
Invest(ent li(it %$r
+,,:.,* is %i/ed at ?s
0,, bn!
Esti(ated $#tla %$r Ea'aharlal
Nehr# Nati$nal Urban ?ene'al
Missi$n t$ be ?s *+!: bn d#rin&
+,,*.,-, incl#din& a &rant
c$(p$nent $% ?s <:!B bn!
Thr$#&h this (issi$n, the
&$vern(ent intends t$ pr$($te
establish(ent $% ne' t$'ns,
pre%erabl %$c#sed $n a speci%ic
ind#str 7IT8 $r a speci%ic the(e
7ed#cati$n $r health8!
Hike in c$rp#s $% ?#ral
In%rastr#ct#re
Devel$p(ent F#nd.CIII
and ?a2iv 4andhi
4ra(een Lid#tikaran
Y$2ana 7?44LY8
NHDD.III t$ be la#nched
in FY,* t$ tar&et selected
hi&h densit hi&h'as
n$t %$r(in& part $% the
4Q $r the N.S, E.F
c$rrid$rG ?s 0< bn
pr$vided in FY,* t$
%$#r.lane <,,,, k(s!
"#d&et s#pp$rt %$r Nati$nal
Hi&h'a Devel$p(ent
Dr$&ra((e 7NHDD8 enhanced
%r$( ?s B;!+ bn t$ ?s BB!: bn in
+,,*.,-!
Drivate sect$r
participati$n in
trans(issi$n pr$2ects and
hike in b#d&etar s#pp$rt
%$r ADD?D
E/cise d#t $n AJCs has
been red#ced %r$( +<1
t$ 0*1!
Special accelerated r$ad
devel$p(ent pr$&ra((e %$r the
N$rth Eastern re&i$n pr$p$sed
at an esti(ated c$st $% ?s <*!+
bn appr$ved 'ith all$cati$n $%
?s :!: bn in +,,*.,-
?ed#cti$n in c#st$(s
d#t $n i(p$rts $%
(edical e6#ip(ents %r$(
0+!:1 t$ -!:1
0,,,, k(s $% access.c$ntr$lled
E/press'as t$ be devel$ped $n
the Desi&n, "#ild, Finance and
=perate 7D"F=8 ($del!
Increase in all$cati$n t$
de%ense t$ ?s B*, bn,
incl#din& ?s <+, bn %$r
capital e/pendit#re
Capital e/pendit#re $n de%ense
pr$p$sed at ?s ;-: bn!
C$ncessi$ns #nder
secti$n ),IA %$r
in%rastr#ct#re %acilities
e/tended t$ cr$ss c$#ntr
nat#ral &as distrib#ti$n
net'$rk, incl#din& &as
pipeline and st$ra&e
%acilities inte&rated t$ the
net'$rk
Deak rate $% c#st$(s d#t $n
n$n.a&ric#lt#ral pr$d#cts has
been red#ced %r$( 0:1 t$
0+!:1 'ith a %e' e/cepti$ns!
C#st$(s d#t $n
sprinklers and drip
irri&ati$n sste(s %$r
a&ric#lt#ral 5
h$rtic#lt#ral p#rp$ses is
BSPATIL *,
FUNDAMENTAL AND TECHNICAL ANALYSIS
red#ced %r$( -!:1 t$ :1
E/e(pti$n t$ speci%ied &$$ds
%$r (akin& capital &$$ds %$r
settin& #p a #nit 'ith an
invest(ent $% ?s :, ( $r ($re
'ithdra'n!
C$ncessi$nal c#st$(s
d#t $% :1 $n speci%ied
plantati$n (achiner
e/tended b t'$ ears t$
April +,,B
?esin binders #sed %$r
(an#%act#re $% r$t$r blades %$r
'ind $perated electricit
&enerat$rs e/e(pted %r$(
e/cise d#t!
C#st$(s d#t $n %$$d
pr$cessin& (achiner
and parts red#ced %r$(
-!:1 t$ :1
Under NELD LI, :: bl$cks and
area $% ;::,,,, s6 k(s $%%ered!
Invest(ent $% ?s ++, bn
e/pected in the re%iner sect$r
in the ne/t %e' ears!
Dividend distrib#ti$n ta/
t$ be hiked %r$( 0+!:1
t$ 0:1
Fi4e ultra ,eAa p78er pr7Bects 7:
(1000 MC eac6 t7 5e a8ar;e; 5e:7re
Dece,5er %!1 200)
A;;iti7+al e;ucati7+ cess 7:
!D t7 :u+; sec7+;ary a+;
6iA6er e;uca
(ey P$siti#es $% !ud6et @11/01-:
P$=e+ 9lay: Since p$'er #tilities are $ne $% the bi&&est c$ns#(ers 7&enerati$n,
trans(issi$n and distrib#ti$n8 %$r en&ineerin& c$(panies, re%$r(s intr$d#ced in the
p$'er sect$r like privatisati$n $% SE"s 'ill help in stren&thenin& the $rder b$$k si9e!
H#&e additi$n in p$'er &enerati$n capacit, in $rder t$ (eet the de(and s#ppl &ap
'ill be a bi& p$sitive %$r the sect$r!
In%+ast+uctu+e de#el$9ment: The &$vern(ent is %$c#sin& $n devel$p(ent $%
in%rastr#ct#re like h$#sin&, airp$rts, r$ads and p$rts! This 'ill be bi& p$sitive %$r
en&ineerin& and c$nstr#cti$n c$(panies
BSPATIL *0
FUNDAMENTAL AND TECHNICAL ANALYSIS
Indust+ial HactI: Ind#strial divisi$ns $% en&ineerin& c$(panies are likel t$ bene%it
%r$( the increased %$c#s $n a#t$(ati$n and capacit additi$n plans dra'n b the
India Inc!
(ey )e6ati#es $% !ud6et @11/01-
Ca9ti#e c$m9etiti$n: D#t %ree i(p$rt $% T5D e6#ip(ents b captive p$'er
&enerati$n #nits, i% all$'ed b &$vern(ent, can have s$(e i(pact $n (ar&ins $% the
T5D (a2$rs beca#se $% c$(petiti$n
Pe$9le 9+$!lem: En&ineerin& c$(panies, acr$ss the b$ard, are %acin& tr$#bled ti(es
retainin& ke e(pl$ees! This is d#e t$ increased levels $% c$(petiti$n %$r talent %r$(
MNCs, 'h$ have deep p$ckets and th#s better pain& capabilities! As a res#lt $%
increasin& levels $% attriti$n, s$(e c$(panies are %acin& e/ec#ti$n iss#es!
P+$s9ects:
F$rld.class in%rastr#ct#re has e(er&ed as $ne $% the ($st i(p$rtant necessities %$r
#nleashin& hi&h and s#stained &r$'th and alleviati$n $% p$vert in an ec$n$(! And
'ith p$$r in%rastr#ct#re t$ s#pp$rt $ther &r$'th initiatives, the Indian ec$n$(
c$ntin#es t$ be a la&&ard 'hen c$(pared t$ its devel$pin& peers! Fr$( a p$lic
perspective, h$'ever, there has been a &r$'in& c$nsens#s that a private.p#blic
partnership is re6#ired t$ re($ve di%%ic#lties c$ncernin& the devel$p(ent $%
in%rastr#ct#re in the c$#ntr! The realisati$n %inall see(s t$ be settin& in! This (akes
the %#t#re $% the Indian en&ineerin& sect$r e/tre(el bri&ht! Apart %r$( hi&h'a
devel$p(ent and c$nstr#cti$n and ($dernisati$n $% airp$rts, the p$tential %$r the
sect$r lies in the $il and &as space, 'here hi&h &l$bal de(and has led t$ increased
acti$n in e/pl$rati$n and pr$d#cti$n activities! C$nsiderin& these %act$rs, 'e e/pect
the sect$r t$ &r$' str$n&l int$ the %#t#re! H$'ever, scale and e/ec#ti$n capabilities
'ill be the ke (antras %$r s#ccess %$r the en&ineerin& c$(panies
I(pet#s &iven %$r &r$'th $% in%rastr#ct#re and c$re ind#str in the last t'$ b#d&ets $%
the central &$vern(ent is e/pected t$ increase capacit #tilisati$n $% pr$d#cers $%
c$al, ce(ent, ir$n $re and likel t$ increase de(and %$r c$nstr#cti$n and (inin&
BSPATIL *+
FUNDAMENTAL AND TECHNICAL ANALYSIS
e6#ip(ents! Ind#strial &r$'th and capital invest(ent levels have i(pr$ved and this
'ill drive the &r$'th in the c$(in& ears!
The &$vern(entAs initiative t$ brin& clarit t$ the p$'er sect$r re%$r(s is a 'elc$(e
si&n %$r the ind#str! M$re c$$rdinati$n bet'een the Centre and states %$r
in%rastr#ct#re devel$p(ent is a step in the ri&ht directi$n! The Electricit Act +,,;
has intr$d#ced a l$t $% re%$r(s in the p$'er sect$r! The #nb#ndlin& in the sect$r 'ill
de%initel b$$st private invest(ent! DSUs like NTDC are e/pected t$ al($st d$#ble
their &enerati$n capacit in ne/t %e' ears, 'hich is a &$$d si&n %$r the en&ineerin&
c$(panies!
The shi%t in %$c#s t$'ards red#cin& T5D l$sses 'ill %#rther increase the $rder b$$k
si9e $% the c$(panies $peratin& in this real(! Fith p$'er &enerati$n and distrib#ti$n
l$$kin& #p, p$'er e6#ip(ent c$(panies can l$$k %$r'ard t$ a pr$(isin& %#t#re
Dere&#lati$n c$(bined 'ith hi&h &l$bal de(and %$r cr#de has led t$ a s#r&e in
e/pl$rati$n and pr$d#cti$n activities in India and &l$ball! Als$, there has been a
radical chan&e in the &$vern(ent3s appr$ach t$ E5D 7e/pl$rati$n and pr$d#cti$n8
activities in the c$#ntr! This thr#st in devel$p(ent $% ne' 'ells and i(pr$ve(ent $%
$#tp#t %r$( $ld 'ells pr$(ises bri&ht pr$spects %$r en&ineerin& c$(panies
A#t$(ati$n b#siness has perked as the #ser ind#stries started realisin& its bene%its!
Fith increasin& c$(petiti$n a($n& the p$'er c$(panies, the c$ns#(ers 'ill de(and
better 6#alit and #ninterr#pted p$'er s#ppl! In s#ch a scenari$ a#t$(ati$n 'ill pla
an i(p$rtant r$le! Fith the a#t$(ati$n techn$l$&ies &ainin& ($(ent#(, c$(panies
like A"" and Sie(ens 'ill bene%it a l$t &$in& %$r'ard!
Capacit additi$n and de.b$ttleneckin& e/ercise bein& carried b vari$#s ind#stries
like steel, p$'er, re%ineries, che(icals etc is likel t$ pr$vide a %illip t$ the ind#strial
se&(ent $% the en&ineerin& c$(panies
Pe+%$+mance $% Indust+y
The ind#strial sect$r rec$rded a health &r$'th $% 0,!;1 7(eas#red in ter(s $% the
Inde/ $% Ind#strial Dr$d#cti$n8 d#rin& the peri$d April.=ct! +,,*.,- as c$(pared t$
)!* percent achieved d#rin& the c$rresp$ndin& peri$d last ear! Capital &$$ds sect$r,
'hich p$sted a r$b#st &r$'th $% 0*!B per cent in +,,:.,*, has (aintained its &r$'th
($(ent#( d#rin& the c#rrent ear as 'ell! Acc$rdin& t$ the Inde/ $% Ind#strial
BSPATIL *;
FUNDAMENTAL AND TECHNICAL ANALYSIS
Dr$d#cti$n, capital &$$ds sect$r p$sted a &r$'th $% 0:!, per cent d#rin& April.=ct!
+,,*.,-! The &r$'th trends d#rin& Apr.=ct +,,*.,- as c$(pared t$ Apr.=ct +,,:.,*
are &iven in the table bel$'I
Sect$+ &ise 4+$=th Rates 2in F5
Fei&ht
+,,:.
,* +,,:.,*
7Apr. =ct8
+,,*.,-
7Apr.=ct8
#e+all 0,,!,
)!+
)!* 0,!;
Minin6 and
'ua++yin6
0,!:
0!,
,!B ;!<
Manu%actu+in6 -B!<
B!0
B!- 00!+
Elect+icity 0,!+
:!+
:!+ -!0
Use0Based Classi%icati$n
#e+all 0,,!, )!+ )!* 0,!;
Basic 4$$ds ;:!* *!- *!; B!,
Ca9ital 4$$ds B!; 0:!) 0*!B 0:!,
C$nsume+
4$$ds
+)!- 0+!, 0;!: B!)
I8 D#rables :!< 0:!; 0;!B 0;!+
II8 N$n.
d#rables
+;!; 00!, 0;!: )!:
Dr$d#cti$n and &r$'th rates $% s$(e $% the ind#stries bein& dealt 'ithin the
Depart(ent $% Heav Ind#str %$r the peri$d April.=ct$ber +,,*.,- as c$(pared t$
April.=ct$ber +,,:.,* are &iven bel$'
Indust+y Unit P+$ducti$n 4+$=th
BSPATIL *<
FUNDAMENTAL AND TECHNICAL ANALYSIS
Rate 2F5 A9+0ct
@11A01C
A9+0ct
@11C01.
Ind#strial Machiner ?s! lakhs 0-*<*<!-B 0<-!-+ 0*!;-
Machine T$$ls ?s! lakhs 0:0<<B!)* 0:;;-0!-, 0!+-
"$ilers ?s! lakhs 0)0B<:!<: +*++)*!+< <<!0*
T#rbines
7Stea(JHdr$8
?s! lakhs <<;!<; :*B<-!;; <)!0;
Electric 4enerat$rs ?s! lakhs <0**+!,: <!0- <,!;+
D$'er Distrib#ti$n
Trans%$r(ers
Mill!
>LA
;:!<; ;B!:, 00!:0
Telec$((#nicati$n
Tables
Mill!
Mtr!
---)!-B <)0;!,B .!+,
C$((ercial Lehicles N#(bers +0<:0, +--),) +B!:0
Dassen&er Cars N#(bers ,B:+ *)B*<B 0)!-0
BSPATIL *:
FUNDAMENTAL AND TECHNICAL ANALYSIS
3ea#y En6inee+in6 Indust+y
Te;tile Machine+y
There are $ver *,, #nits en&a&ed in the (an#%act#re $% Te/tile Machineries,
their c$(p$nents, access$ries and spares,and $#t $% these ab$#t 0,, #nits are
(an#%act#rin& the c$(plete te/tile (achiner! The ran&e incl#des te/tile (achiner
re6#ired %$r s$rtin&, c$rdin&,pr$cessin& $% arnsJ %abrics and 'eavin&! The ind#str is
&earin& itsel% t$ avail the $pp$rt#nities $% s#pplin& (achines re6#ired t$ cater the
e/p$rt tar&et $% &ar(ent (an#%act#rers p$st M#lti Fibre A&ree(ent 7MFA8!Fith a
capital invest(ent $% ?s! 0:,, cr$re and an installed capacit $% ?s! ;,:, cr$re per
ann#(!
Their c#rrent pr$d#cti$n as 'ell as e/p$rts and i(p$rts are as #nderI .
7?s! in cr$re8
Yea+ P+$ducti$n E;9$+ts Im9$+ts
+,,;.+,,< 0;;B :;: +0-B
+,,<.+,,: 0*): <:- ;+BB
+,,:.+,,* ++0+ <-* *-*)
Cement Machine+y
Ce(ent plants based $n dr pr$cessin& and precalcinati$n techn$l$& %$r capacities
#pt$ -:,, TDD are bein& (an#%act#red in the c$#ntr!M$dern ce(ent plants are
desi&ned %$r 9er$ d$'nti(e, hi&h pr$d#ct 6#alit and better $#tp#t 'ith (ini(#(
ener& c$ns#(ed per #nit $% ce(ent pr$d#cti$n etc! At present, there are 0) #nits in
the $r&ani9ed sect$r %$r the (an#%act#re $% c$(plete ce(ent plant (achiner! Fith an
installed capacit $% ar$#nd ?s! *,, cr$reJann#(, the ind#str is %#ll capable t$ (eet
the d$(estic de(and!
BSPATIL **
FUNDAMENTAL AND TECHNICAL ANALYSIS
Su6a+ Machine+y
D$(estic (an#%act#rers $cc#p pred$(inant p$siti$n in the &l$bal scenari$ and are
capable $% (an#%act#rin& %r$( c$ncept t$ c$((issi$nin& sta&e s#&ar plants $% latest
desi&n %$r a capacit #pt$ 0,,,,, TCD 7t$ns cr#shin& per da8! There are presentl +-
#nits in the $r&anised sect$r %$r the (an#%act#re $% c$(plete s#&ar plants and
c$(p$nents 'ith an installed capacit $% ar$#nd ?s! +,, cr$re per ann#(!
7?s! in lakh8
@11B0@11D @11D0@11A @11A0@11C
I(p$rt <+- 0+:B B,:
E/p$rt 00;B +*)+ ;-*-
Ru!!e+ Machine+y
There are at present 0B #nits in the $r&ani9ed sect$r %$r the (an#%act#re $%
r#bber (achiner (ainl re6#ired %$r treJt#be ind#str! The ran&e $% e6#ip(ents
(an#%act#red in the c$#ntr incl#des inter.(i/er, tre c#rin& presses, t#be splicers,
bladder c#rin& presses, tre ($#lds, tre b#ildin& (achines, t#rnet servicer, bias
c#tters, r#bber in2ecti$n ($#ldin& (achine,bead 'ires etc!
7?s!in cr$re8
@11B0@11D @11D0@11A @11A0@11C
I(p$rt +:!B0 ;*!-: 0+!,+
E/p$rt ++!+B <*!0: :,!;+
BSPATIL *-
FUNDAMENTAL AND TECHNICAL ANALYSIS
Mate+ial 3andlin6 EJui9ment
The ran&e $% e6#ip(ent (an#%act#red incl#des cr#shin& and screenin& plants,
c$alJ$reJash handlin& plant and ass$ciated e6#ip(ent s#ch as stackers, reclai(ers,
ship l$adersJ #nl$aders,'a&$n tipplers, %eeders etc! caterin& t$ the &r$'in& and
rapidl chan&in& needs $% the c$re ind#stries s#ch as C$al, Ce(ent, D$'er, D$rt,
Minin&, Fertili9ers and steel plants! There are :, #nits in the $r&anised sect$r %$r the
(an#%act#re $% (aterial handlin& e6#ip(ent!"esides, there are n#(ber $% #nits
$peratin& in the s(all.scale sect$r! The ind#str is sel% s#%%icient in (eetin& d$(estic
de(and and is als$ capable $% (eetin& &l$bal c$(petiti$n!
7?s!in cr$re8
@11B0@11D @11D0@11A @11A0@11C
I(p$rt +<+! +*0!<< :<:!:<
E/p$rt <0!:< ),!0* --!B0
il Field EJui9ment
The petr$le#( ind#str in India is #nder&$in& a (a2$r chan&e! Fith the $n&$in&
pr$cess $% liberalisati$n, the ind#str has been thr$'n $pen %$r private sect$r in all
(a2$r areas $% e/pl$rati$n,pr$d#cti$n, re%inin& and (arketin&, and this has res#lted in
increased de(and %$r the $il %ield and related e6#ip(ents! D$(estic pr$d#cti$n
c$vers (ainl the $n.sh$re drillin& e6#ip(ent!Under =%%sh$re drillin& $nl $%%sh$re
plat%$r(s and s$(e $ther techn$l$&ical str#ct#res are bein& pr$d#ced l$call! The
(a2$r pr$d#cers $% these e6#ip(ents are "HEL,Hind#stan Shipard, Ma9a&a$n D$ck
and Larsen 5 T$#br$!

BSPATIL *)
FUNDAMENTAL AND TECHNICAL ANALYSIS
7?s!in cr$re8
@11B0@11D @11D0@11A @11A0@11C
I(p$rt 0<+!<B *!+, ;:+!)<
E/p$rt 0*:!)0 ;,,!<- -0!)-
Metallu+6ical Machine+y
Metall#r&ical (achiner incl#des e6#ip(ent %$r (ineral bene%iciati$n, $re
dressin&, si9e red#cti$n, steel plant e6#ip(ents, %$#ndr ;, Indian D#blic Sect$r
ai(in& &l$bal hei&hts e6#ip(ents and %#rnaces! At present, there are ;B #nits in the
$r&ani9ed sect$r en&a&ed in the (an#%act#re $% vari$#s tpes $% (etall#r&ical
(achiner! The e/istin& pr$d#cti$n capacit in the c$#ntr is s#%%icient t$ (eet the
de(and $% these e6#ip(ent in the c$#ntr! Indi&en$#s (an#%act#rers are in a p$siti$n
t$ s#ppl (a2$rit $% the e6#ip(ent %$r steel plants e!&! blast %#rnaces, sinter plants,
c$ke $vens, steel (eltin& sh$p e6#ip(ent, c$ntin#$#s castin& e6#ip(ent, r$llin& (ills
5 %inishin& line!H$'ever, there is a techn$l$&ical &ap in the basic desi&n and
en&ineerin& %$r plant and e6#ip(ent re6#ired in the %err$#s and n$n.%err$#s sect$r %$r
'hich the d$(estic (an#%act#rers are dependent $n i(p$rted kn$'.h$'! Since the
pr$cess $% (akin& %err$#s and n$n.%err$#s (etal is linked #p 'ith the desi&n $% the
e6#ip(ent, there is a need %$r cl$se interacti$n bet'een the pr$cess kn$'.h$',
desi&ners and e6#ip(ent (an#%act#rers!
7?s!in cr$re8
@11B0@11D @11D0@11A @11A0@11C
I(p$rt <B:!+) <:<!<, 0+,,!*:
E/p$rt <;<!+; ;-,!-, :;:!,<
BSPATIL *B
FUNDAMENTAL AND TECHNICAL ANALYSIS
Minin6 Machine+y
The (a2$r (inin& e6#ip(ents are L$n&'all Minin& E6#ip(ent, ?$ad Header,
side dischar&es L$ader 7SDL8, Ha#la&e Finder, Lentilati$n Fan,L$ad Ha#l d#(per
7LHD8, C$al C#tter,C$nve$rs, "atter L$c$s, D#(ps, Fricti$n Dr$p,etc! At present
there are ;+ (an#%act#rers in the $r&ani9ed sect$r b$th in p#blic and private sect$r %$r
#nder&r$#nd and s#r%ace (inin& e6#ip(ent $% vari$#s tpes! =#t $% these, 0- #nits
(an#%act#re #nder&r$#nd (inin& e6#ip(ent!Ma2$rit $% the re6#ire(ent $% the
(inin& ind#str is bein& (et b the indi&en$#s (an#%act#rers!
7?s!in cr$re8
@11B0@11D @11D0@11A @11A0@11C
I(p$rt 0*!), ;B!,0 <0!BB
E/p$rt 0!0: 0!:: :!B,
*ai+y Machine+y
At present, there are 0* #nits in the $r&ani9ed sect$r, b$th in private and p#blic
sect$r, (an#%act#rin& Dair Machiner e6#ip(ents s#ch as evap$rat$rs, (ilk
re%ri&erat$rs andst$ra&e tanks, (ilk and crea( de$d$ri9ers, centri%#&es, clari%iers,
a&itat$rs , h$($&enisers, spra drers and heat e/chan&ers! S(all Scale #nits are als$
c$ntrib#tin& t$ the indi&en$#s pr$d#cti$n! The spra drers, plate tpe heat e/chan&er
and $ther c$re e6#ip(ent %$r (ilk p$'der plant call %$r hi&h de&rees $% p$lish
re6#ire(ent $n the e6#ip(ent beca#se the presence $% an (icr$ crevices res#ltin&
%r$( inade6#ate p$lish tends t$ be the inc#bati$n and breedin& &r$#nd %$r the
bacteria! The techn$l$& &aps e/ist %$r handlin& e6#ip(ents s#ch as sel% cleanin&
crea(, separat$r, aseptic pr$cessin& sste(s, and %$r the e6#ip(ent re6#ired %$r
(an#%act#re $% $&h#rt and traditi$nal Indian s'eets!
BSPATIL -,
FUNDAMENTAL AND TECHNICAL ANALYSIS
2Rs<in c+$+e5
@11B0@11D @11D0@11A @11A0@11C
Im9$+t ,/<,A @,<1A A@<BC
E;9$+t ,1<AD /<1/ A<-A
Machine T$$ls
Machine T$$l Ind#str is in a p$siti$n t$ e/p$rt &eneral p#rp$se and a
standard (achine t$$l t$ even ind#striall advanced c$#ntries! D#rin& last %$#r
decades, the (achine t$$l ind#str in India has established a s$#nd base and there are
ar$#nd 0*, (achine t$$l (an#%act#rers in the $r&ani9ed sect$r as als$ ar$#nd <,,
#nits in the s(all ancillar sect$r! The ind#str, h$'ever,lacks in desi&n and
en&ineerin& capabilit t$ #ndertake ver hi&h precisi$n CNC Machines!S$(e
c$(panies have taken #p (an#%act#re $% CNC Machines, b#t there is a need t$
#p&rade research and devel$p(ent in this %ield! Indian (achine t$$ls are
(an#%act#red t$ the internati$nal standard $% 6#alit J precisi$n and reliabilit! A
n#(ber $% c$llab$rati$ns have als$ been appr$ved %$r brin&in& in the latest
techn$l$& in this %ield $% ($dern (achine t$$ls and the ind#str is n$' e/p$rtin&
c$nventi$nal as 'ell as NCJCNC hi&h . tech (achine t$$ls! In the %ield $% ?5 D,
Central Man#%act#rin& Techn$l$& Instit#te, "an&al$re has been d$in& research %$r
($re appr$priate desi&ned (achine t$$ls! There is &ap in techn$l$& %$r Special
D#rp$se Machines and even in s$(e cate&$ries $% CNCs! I(p$rt $% techn$l$& is
enc$#ra&ed t$ brid&e the &ap!
BSPATIL -0
FUNDAMENTAL AND TECHNICAL ANALYSIS
Pe+%$+mance $% the indust+y du+in6 the last th+ee yea+s is ta!ulated !el$=:
2Rs< in c+$+e5
@11B0@11D @11D0@11A @11A0@11C
P+$ducti$n
.-.<11 ,1/-<1D ,BD@<11
Im9$+t -CA<11 ,/@1</B @/--<11
E;9$+t AA<11 A@<C, A1<11
C$(pan analsis
The c$(pan analsis is the last step in EIC analsis %ra(e'$rk $%
%#nda(ental analsis! The ind#str analsis helps the invest$r in selectin& the
ind#str in 'hich the invest(ents are better re'arded! The invest$r n$' has t$ decide
in 'hich $% the c$(panies bel$n&in& t$ ch$sen ind#stries he sh$#ld invest! This
re6#ires the c$(pan analsis!
The c$(pan analsis has t$ be (ade in three di%%erent parts
0! St#d $% %inancial in%$r(ati$n and asses the %inancial health $% the c$(pan!
+! Si9in& #p present sit#ati$n and pr$spects! This re6#ires an analsis $% the
present b#siness $% the c$(pan and its %#t#re pr$spects!
;! Ev$l#ti$n $% (ana&e(ent!

BSPATIL -+
FUNDAMENTAL AND TECHNICAL ANALYSIS
BHEL COMPANY ANALYSIS
BSPATIL -;
FUNDAMENTAL AND TECHNICAL ANALYSIS
0! C$(pan %inancial health
The %inancial state(ents $% the c$(pan can be #sed t$ #nderstand and
eval#ate the %inancial per%$r(ance and health $% the c$(pan! ?ati$ analsis helps an
invest$r t$ deter(ine the %inancial stren&ths and 'eakness $% the c$(pan!
The %$ll$=in6 is the +ati$ analysis $% the B3EL C$m9any
Balance sheet of BHEL
Mar E0% Mar E0( Mar E02 Mar E0) Mar E0'
$7urces O: Fu+;s
T7tal $6are Capital 2((&') 2((&') 2((&') 2((&') 2((&')
E@uity $6are Capital 2((&') 2((&') 2((&') 2((&') 2((&')
$6are Applicati7+ M7+ey 0 0 0 0 0
Pre:ere+ce $6are Capital 0 0 0 0 0
Reser4es (1228&! 2102!&!8 21'82&!% '102)&)2 812(%&20
Re4aluati7+ Reser4es 0 0 0 0 0
#et87rt6 (180%&)' 2122&( )102)&8 '1%0!&%8 81'88&2)
$ecure; L7a+s 200 200 200 200 0
"+secure; L7a+s %!&0 (0&0% %)&8 28&2( 8&%%
T7tal De5t 2%!&0 2(0&0% 2%)&8 228&2( 8&%%
T7tal Lia5ilities 21%%(&') 218%2&' )12)%&8' '182&)2 818''&2
Applicati7+ O: Fu+;s
<r7ss Bl7c- %1%('&82 %1(2&!) %1)28&20 %182!&)2 (1!%(&)!
Less= Accu,& Depreciati7+ 21!'8&8! 21%)2&() 2128(&'0 218%&' %1!()&%!
#et Bl7c- !1!)&0! !10%&'0 !10(%&80 8!&8% 88&%
Capital C7r- i+ Pr7Aress )'&22 !0&2' 8&!2 !!&2' %0)&28
I+4est,e+ts !0&%% 28&8 8&2 8&2 8&2
I+4e+t7ries 2100!&0) 21!0%&88 21!)&!! %1'((&%' (12!'&)'
$u+;ry De5t7rs (10'2&'8 (1)08&(8 21'2&!( '1!)8&0) 1)2&82
Cas6 a+; Ba+- Bala+ce !1!!&(( !120(&)% !1%2&8) !1(8%&' 210)8&!
T7tal Curre+t Assets '1!)&28 812!)& !0128!&!! !21%)&(0 !2182&(0
L7a+s a+; A;4a+ces !1(2&2) !1)%&% !12!&%% (1!8)&2' 212!'&2
Fi9e; Dep7sits 20!&(' !1!22&0! !1'82&0! 21)20&0! %1'(0&00
T7tal CA1 L7a+s 3 A;4a+ces 818%&0! !!10)2&% !%18'&(2 !12%2&)8 2212%&
Curre+t Lia5ilities (10(&!8 21%%&)) '12(8& 8102&!( !!12'&%2
Pr74isi7+s 80)&() !1!%&( !1%22&(2 %1)(&%2 21'08&22
T7tal CL 3 Pr74isi7+s (100&)( )1('&)0 812'(&(( !2122(&() !'1))2&2'
#et Curre+t Assets %12&%' (1282&' 21(!%&0! )1)'8&22 '12'(&(2
Miscella+e7us E9pe+ses 2&2 !'&2 0 0 0
T7tal Assets 21%%(&') 218%2&) )12)%&88 '182&)! 818''&2
C7+ti+Ae+t Lia5ilities !102(&28 8!2&' )0&)8 ')&2 ')&02
B77- Falue .Rs0 !)&2) 2!)&%' 2()&2( 28&%! %2&0)
Profit & Loss account
Mar E0% Mar E0( Mar E02 Mar E0) Mar E0'
BSPATIL -<
FUNDAMENTAL AND TECHNICAL ANALYSIS
I+c7,e
$ales Tur+74er '1'2'&' 818%&!' !01)82&!2 !(1'%&() !1028&%%
E9cise Duty '28&( 82)&(( !10(%&!2 !128&0! !1)2&((
#et $ales )1&%0 810%)&'% 1)%&00 !%1((!&(2 !'1%)2&8
Ot6er I+c7,e )&08 !(&)! 22&8 %(2&00 (82&%2
$t7c- A;Bust,e+ts /(2&%2 /%0&)% 2%&'' %8)&0! !8!&%'
T7tal I+c7,e '102%&0) 81020&'! !01(%8&'2 !(1!)&() !8102)&28
E9pe+;iture
Ra8 Materials %1!)0&%8 %1)%(&)) 210'&)8 '10&(0 812)!&(!
P78er 3 Fuel C7st !&) !)&8! 220&2( 22&0! 22&08
E,pl7yee C7st !120(&)( !1)%&2! !1)20&%8 !18'8&2! 21%))&%
Ot6er Ma+u:acturi+A E9pe+ses ('8&!0 28&)' '8%&(( !102(&)' !1'%%&2
$elli+A a+; A;,i+ E9pe+ses 2%2&8 888&8 !100)&%8 !12!)&00 88'&22
Miscella+e7us E9pe+ses 8!&2) !%&28 !!)&8 !2)&2' !0&20
Pre7perati4e E9p Capitalise; 0&00 0&00 0&00 0&00 0&00
T7tal E9pe+ses 212'&)2 '1!22&!2 818'2&(0 !!1)0%&8) !%1&0)
Operati+A Pr7:it )&%) 82%&8 !1%0%&%' 2122%&)0 %12(2&20
PBDIT !10)2&(( 8)8&2 !12)%&%2 212)2&)0 (102'&22
I+terest 2(&'8 )0&08 8!&(! 28&'2 (%&%%
PBDT !10!0&)) 808&2! !1(8!&( 2120)&82 %18(&!
Depreciati7+ !82&%2 !8&00 2!8&8' 2(2&% 2((&)!
Ot6er Critte+ O:: 0&00 0&00 0&00 0&00 0&00
Pr7:it Be:7re Ta9 822&%! )!0&2! !12)%&0' 212)0&2 %1'%&28
E9tra/7r;i+ary ite,s /(&0! %)&2 %0)&)0 2&8) /!%&'
PBT .P7st E9tra/7r; Ite,s0 '')&%0 !100'&!0 !12)&)' 212)0&'8 %1'22&'
Ta9 2!&2! %(8&% )!)&%0 88!&)! !1%!!&0
Rep7rte; #et Pr7:it (((&2! )28&!2 2%&(0 !1)'&!) 21(!(&'0
T7tal Falue A;;iti7+ 21''&2( %12!'&() %1'''&'! (120(&() 21(%'&)2
Pre:ere+ce Di4i;e+; 0&00 0&00 0&00 0&00 0&00
E@uity Di4i;e+; '&0 !()&8) !2&8! %2(&0 2&))
C7rp7rate Di4i;e+; Ta9 !2&2( !&00 2)&)( (&'8 2&8%
Per s6are ;ata .a++ualise;0
$6ares i+ issue .la-6s0 21(('&)0 21(('&)0 21(('&)0 21(('&)0 21(('&)0
Ear+i+A Per $6are .Rs0 !8&!) 2)&8 %8&2 )8&)0 8&))
E@uity Di4i;e+; .D0 (0&00 )0&00 80&00 !(2&00 2(2&00
B77- Falue .Rs0 !)&2) 2!)&%' 2()&2( 28&%! %2&0)
BHEL Ratios calculations
sl&+7 rati7 :7r,ula
year
200' 200) 2002
! #et 87r-i+A capital CA/CL '2'(&(2 ))'8&22 2(!%&0!
2 curre+t rati7 CA?CL !&(% !&2% !&)%
% @uic- rati7 CA/.st7c-Gprepai; e9p0?CL !&!% !&!' !&22
BSPATIL -:
FUNDAMENTAL AND TECHNICAL ANALYSIS
( i+4e+t7ry tur+74er rati7 CO<$?a4A I#F %&%2 %&!0 %&0(
2 ;e5t e@uity rati7 l7+A tr, DBT? $6 67l;ers e@ 0&0! 0&0' 0&08
) i+terest c74eraAe rati7 EBIT?I#TER$T %&(2 (%&() !&8
' Ar7ss pr7:it ,arAi+ <r7ss pr7:it ? sales ! !(&'! !!&22
8 #et pr7:it rati7 EAT? #et sales !%&2! !2&! &28
c7st 7: A77;s s7l; rati7 CO<$? +et salesH!00 80&)% 8)&%% 2&08
!0 Operati+A pr7:it rati7 EBIT? #et sales 20&(! !)&2( !%&22
!! retur+ 7+ e@uity #et pr7:it? s6are 67l;ers e@uity 2'&(8 2%&00 !2&82
!2 retur+ 7+ assets #et pr7:it?t7tal assets 2'&) 22&!! !2&''
!% retur+ 7+ capital e,pl7ye; EBIT? T7tal capital ((&!8 %0&28 20&82
!( EP$ #et pr7:it a4aila5le e@ s6? #O s6ares 8&)) )8&) %8&2
!2 DP$ Di4 pai; t7 7r; s6 ? #7 7: s6ares 2(&2 !(&2 8
!) P?E MP$?EP$ 22&! %2&'2 !&'0
!' price t7 577- 4alue rati7 MP$?BP$ )&%0 '&2% %&!2
!8 577- 4alue per s6are #et 87rt6 ? +7 7: s6ares %2&0) 28&%! 2()&2(
! ;i4i;e+; pay7ut rati7 DP$?EP$H!00 2(&8% 2!&!( 20&2(
20 ear+i+A yiel; EP$?MP$ H!00 (&%) %&02 2&08
2! ;i4i;e+; yiel; DP$?MP$H!00 !&08 0&)2 !&0(
22 t7tal asset tur+74er rati7 CO<$?t7tal asst !&28 !&(8 !&%2
2% capital tur+74er rati7 CO<$?capital e,pl7ye; !&2 !&2 !&('
Inte+9+etati$n:

)et =$+8in6 ca9ital:
NFC represents the e/cess $% c#rrent assets $ver c#rrent liabilities! C$(panies
sh$#ld have s#%%icient NFC in $rder t$ be able t$ (eet the clai(s $% the credit$rs and
BSPATIL -*
FUNDAMENTAL AND TECHNICAL ANALYSIS
the da t$ da needs $% b#siness! The &reater is the a($#nt $% NFC &reater is the
li6#idit $% the %ir(! In "HEL c$(pan the three ear NFC is as %$ll$'s!
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
0 Net '$rkin& capital CA.CL -:-<!<+ **-)!++ :<0;!,0
The c$(pan %r$( +,,: t$ +,,- has increased its NFC 'hich sh$'s that the
c$(pan has &$$d li6#idit t$ its credit$rs!
Cu++ent +ati$:
The C#rrent ?ati$ e/presses the relati$nship bet'een the %ir(3s c#rrent assets and its
c#rrent liabilities! The r#le $% th#(b sas that the c#rrent rati$ sh$#ld be at least + that
is, the current a""et" "%ou&' (eet current &ia)i&itie" at &ea"t t*ice+
sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
+ c#rrent rati$ CAJCL 0!<;I0 0!:;I0 0!*;I0
Here 'e can see that the c$(pan3s c#rrent rati$ decreasin& &rad#all!
'uic8 +ati$:
The 6#ick rati$, als$ re%erred t$ as acid test rati$, e/a(ines the abilit $% the b#siness
t$ c$ver its sh$rt.ter( $bli&ati$ns %r$( its S6#ickK assets $nl 7i!e! it i&n$res st$ck8!
Clearl this rati$ 'ill be l$'er than the c#rrent rati$, b#t the di%%erence bet'een the
t'$ 7the &ap8 'ill indicate the e/tent t$ 'hich c#rrent assets c$nsist $% st$ck!
sl!n$ ?ati$ F$r(#la
ear
+,,- +,,* +,,:
; Q#ick rati$ CA 0 7st$ck N prepaid e/p8JCL 0!0;I0 0!0-I0 0!++I0
Here 'e can see that the c$(pan3s 6#ick rati$ is bit c$nstant %$r three ears and
c$(pan is able t$ satis% its credit$rs 'ith this rati$!
In#ent$+y tu+n $#e+ +ati$:
This rati$ (eas#res the st$ck in relati$n t$ t#rn$ver in $rder t$ deter(ine h$' $%ten
the st$ck t#rns $ver in the b#siness! It indicates the e%%icienc $% the %ir( in sellin& its
pr$d#ct!
sl!n$ ?ati$ F$r(#la
ear
+,,- +,,* +,,:
< invent$r t#rn$ver rati$ C=4SJav& INL ;!;+ ;!0, ;!,<
In +,,-I 0+J ;!;+O ;!*0 ($nths
BSPATIL --
FUNDAMENTAL AND TECHNICAL ANALYSIS
In +,,*I 0+J;!0O;!)- ($nths
In +,,:I 0+J;!,<O ;!B: ($nths! Here 'e can see that the c$(pan3s '$rkin&
e%%icienc increased $ver a peri$d $% ti(e! The are able t$ c$nvert their invent$r
int$ sale in ;!*0 ($nths!
*e!t eJuity +ati$:
This rati$ indicates the e/tent t$ 'hich debt is c$vered b shareh$lders3 %#nds! It
re%lects the relative p$siti$n $% the e6#it h$lders and the lenders and indicates the
c$(pan3s p$lic $n the (i/ $% capital %#nds! The rati$ re%lects the relative
c$ntrib#ti$n $% credit$rs and $'ners $% b#siness in its %inancin&!
sl!n$ ?ati$ F$r(#la
ear
+,,- +,,* +,,:
: debt e6#it rati$ L$n& tr( D"TJ Sh h$lders e6 ,!,0 ,!,- ,!,)
Here 'e can see that the c$(pan &rad#all decreased its debt c$(binati$n %r$( its
%inance!
Inte+est C$#e+a6e Rati$:
This rati$ indicates h$' 'ell the %ir(3s earnin& can c$ver the interest pa(ents $n its
debt!
sl!n$ ?ati$ F$r(#la
ear
+,,- +,,* +,,:
* interest c$vera&e rati$ E"ITJINTE?ST B;!<+ <;!<* 0B!)
4+$ss P+$%it Ma+6in:
N$r(all the &r$ss pr$%it has t$ rise pr$p$rti$natel 'ith sales! It can als$ be #se%#l t$
c$(pare the &r$ss pr$%it (ar&in acr$ss si(ilar b#sinesses alth$#&h there 'ill $%ten be
&$$d reas$ns %$r an disparit!
sl!n$ ?ati$ F$r(#la
ear
+,,- +,,* +,,:
- 4r$ss pr$%it (ar&in 4r$ss pr$%it J sales 0B 0<!-0 00!+:
The rati$ ab$ve sh$'s the increasin& trend in the &r$ss pr$%it since the rati$ has
i(pr$ved %r$( 00!+:1 in +,,: t$ 0B!,,1 $n +,,-! This indicates that the rate in
increase in c$st $% &$$ds s$ld are less than rate $% increase in sales, hence the
increased e%%icienc!
BSPATIL -)
FUNDAMENTAL AND TECHNICAL ANALYSIS
)et 9+$%it +ati$:
sl!n$ ?ati$ F$r(#la
ear
+,,- +,,* +,,:
) Net pr$%it rati$ EATJ Net sales 0;!:01 0+!0B1 B!1
a hi&h net pr$%it (ar&in '$#ld ens#re ade6#ate ret#rn t$ the $'ners as 'ell as enable
a %ir( t$ 'ithstand adverse ec$n$(ic c$nditi$ns 'hen sellin& price is declinin& c$st
$% pr$d#cti$n is risin& and de(and %$r the pr$d#ct %allin&!
C$st $% 6$$ds s$ld +ati$:
sl!n$ ?ati$ F$r(#la
ear
+,,- +,,* +,,:
B c$st $% &$$ds s$ld rati$ C=4SJ net salesT0,, ),!*; )*!;; B+!,)
This is $ne $% the e/penses rati$s it is c$(p#ted b e/penses b net sales! The c$st $%
&$$ds s$ld rati$ sh$'s 'hat percenta&e share $% sales is c$ns#(ed b c$st $% &$$ds
s$ld and c$nversel 'hat pr$p$rti$n is available %$r (eetin& e/penses s#ch as sellin&
and &eneral distrib#ti$n e/penses as 'ell as %inancial e/penses c$nsistin& $% ta/es
interest and dividend and s$ $n!
9e+atin6 9+$%it +ati$:
This rati$ reveals the pr$%itabilit $% sales res#ltin& %r$( re&#lar b#siness as 'ell as
b#in&, sellin&, and (an#%act#rin& $perati$ns!
sl!n$ ?ati$ F$r(#la
ear
+,,- +,,* +,,:
0, $peratin& pr$%it rati$ E"ITJ Net sales +,!<0 0*!:< 0;!:+
Retu+n $n EJuity:
This rati$ sh$'s the pr$%it attrib#table t$ the a($#nt invested b the $'ners $% the
b#siness! ?=E (eas#res the a($#nt $% ($ne that the c$(pan has (ana&ed t$
&enerate %$r its shareh$lders!
sl!n$ ?ati$ F$r(#la
ear
+,,- +,,* +,,:
00 ret#rn $n e6#it Net pr$%itJ share h$lders e6#it +-!<) +;!,, 0:!)+
BSPATIL -B
FUNDAMENTAL AND TECHNICAL ANALYSIS
Here 'e can see that the c$(panies ret#rn $n e6#it is increasin& c$nstantl s$ 'e
can sa that the pr$%itabilit t$ $rdinar shareh$lders is str$n& and sh$'in& an
#p'ard trend!
Retu+n $n assets:
This rati$ &ives $# an idea $n the c$(panAs (ana&e(ent e%%ectiveness in #tili9in&
its assets t$ (ake a pr$%it %$r its shareh$lders!
sl!n$ ?ati$ F$r(#la
ear
+,,- +,,* +,,:
0+ ret#rn $n assets Net pr$%itJt$tal assets +-!*B ++!00 0:!--
The c$(pan ?=A has increased c$nstantl 'hich its (ana&e(ent e%%icienc in
&ettin& &$$d ret#rns %r$( its assets!
Retu+n $n ca9ital em9l$yed:
sl!n$ ?ati$ F$r(#la
ear
+,,- +,,* +,,:
0;
ret#rn $n capital
e(pl$ed E"ITJ T$tal capital <<!0) ;,!+) +,!)+
This rati$ sh$'s h$' e%%icientl the l$n& ter( %#nds $% $'ners and lenders are bein&
#sed!
Ea+nin6 Pe+ Sha+e:
F$r an e6#it invest$r, a c$(pan3s EDS is the ($st i(p$rtant indicat$r $% its
per%$r(ance! I% the EDS is &$$d, the c$(pan can pa dividends, pl$#&h back the
s#rpl#s int$ reserves and iss#e b$n#s shares in the %#t#re! F$r these reas$ns, the
(arket price $% an c$(pan3s share is lar&el in%l#enced b its pr$2ected EDS
Sl!n$ rati$ F$r(#la
ear
+,,- +,,* +,,:
0< EDS
Net pr$%it available e6 shJ N=
shares B)!** *)!* !B:
Fe can see here the c$(pan3s EDS &$ne three ti(es hi&her %r$( three ear!
BSPATIL ),
FUNDAMENTAL AND TECHNICAL ANALYSIS
*i#idend 9e+ Sha+e:
Sl!n$ rati$ F$r(#la
Year
+,,- +,,* +,,:
0: DDS div paid t$ $rd sh J N$ $% shares +<!: 0<!: )
This indicates the dividend paid %$r each share! Shareh$lders '$#ld, nat#rall like t$
receive the (a/i(#( p$ssible dividends %r$( a c$(pan, c$nsistent 'ith its pr$%its
and need %$r retained earnin&s!
PKE Rati$:
DJE rati$ is a #se%#l indicat$r $% 'hat pre(i#( $r disc$#nt invest$rs are prepared t$
pa $r receive %$r the invest(ent! The hi&her the price in relati$n t$ earnin&s, the
hi&her the DJE rati$ 'hich indicates the hi&her the pre(i#( an invest$r is prepared t$
pa %$r the share! This $cc#rs beca#se the invest$r is e/tre(el c$n%ident $% the
p$tential &r$'th and earnin&s $% the share!
sl!n$ ?ati$ F$r(#la
ear
+,,- +,,* +,,:
0* DJE MDSJEDS ++!B0 ;+!-: 0B!-,
The ab$ve rati$ sh$'s that the shares 'ere traded at a (#ch hi&her pre(i#( in
+,,- than 'ere in +,,:! In +,,: the price 'as 0B!- ti(es hi&her than earnin&s
'hile in +,,-, the price is ++!B0 ti(es hi&her!
P+ice t$ !$$8 #alue +ati$:
sl!n$ ?ati$ F$r(#la
ear
+,,- +,,* +,,:
0- Drice t$ b$$k val#e rati$ MDSJ"DS *!;, -!:; ;!0+
It (eas#res the relati$nship bet'een the (arket price $% an e6#it share 'ith b$$k
val#e per share! The DJ" rati$ is si&ni%icant in predictin& %#t#re st$ck ret#rn! Fir(s
BSPATIL )0
FUNDAMENTAL AND TECHNICAL ANALYSIS
'ith l$' DJ" rati$ had c$nsistentl hi&her ret#rns c$(pared t$ the %ir(s 'ith hi&h
DJ" rati$!
B$$8 #alue 9e+ sha+e:
sl!n$ ?ati$ F$r(#la
ear
+,,- +,,* +,,:
0) "$$k val#e per share Net '$rth J n$ $% shares ;:B!,* +B)!;0 +<*!+<
This rati$ indicates the net asset val#e $% a c$(pan3s share! A hi&h b$$k val#e
indicates that the c$(pan has str$n& reserves, indicatin& sc$pe %$r b$n#s shares, $%
c$#rse s#b2ect t$ necessar &#idelines $% the SE"I!
*i#idend 9ay$ut +ati$:
This rati$ l$$ks at the dividend pa(ent in relati$n t$ net inc$(e and can be
calc#lated as %$ll$'sI
sl!n$ ?ati$ F$r(#la
ear
+,,- +,,* +,,:
0B dividend pa$#t rati$ DDSJEDST0,, +<!); +0!0< +,!:<
Ea+nin6 yield:
This rati$ hi&hli&hts as a percenta&e a c$(pan3s earnin&s vis.a.vis the c#rrent
(arket val#e $% its share! F$r bl#e chip c$(panies this rati$ tends t$ be ar$#nd : per
cent t$ * per cent!
sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
+, earnin& ield EDSJMDS T0,, <!;* ;!,: :!,)
*i#idend yield:
The dividend ield rati$ indicates the ret#rn that invest$rs are $btainin& $n their
invest(ent in the %$r( $% dividends! This ield is #s#all %airl l$' as the invest$rs
are als$ receivin& capital &r$'th $n their invest(ent in the %$r( $% an increased share
price!
sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
+0 dividend ield DDSJMDST0,, 0!,) ,!*: 0!,<
BSPATIL )+
FUNDAMENTAL AND TECHNICAL ANALYSIS
T$tal asset tu+n$#e+ +ati$:
sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
++ t$tal asset t#rn$ver rati$ C=4SJt$tal asst 0! 0!<) 0!;:
T$tal asset t#rn$ver rati$ (eas#res the e%%icienc $% a %ir( in (ana&in& and #tili9in&
its assets! The hi&her rati$ indicates the ($re e%%icient (ana&e(ent!
Ca9ital tu+n$#e+ +ati$:
sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
+; capital t#rn$ver rati$ C=4SJcapital e(pl$ed 0!:B 0!:B 0!<-
Capital t#rn$ver rati$ (eas#res the e%%icienc $% a %ir( in (ana&in& and #tili9in& its
capital! The hi&her rati$ indicates the ($re e%%icient (ana&e(ent!
BSPATIL );
FUNDAMENTAL AND TECHNICAL ANALYSIS
Bharat Heavy Electricals Limited:
"harat Heav Electricals Li(ited 7"HEL8 is $ne $% the lar&est
en&ineerin& enterprises $% its kind in India! "HEL is the lar&est d$(estic capital
&$$ds (an#%act#rer in India and the 0+th lar&est in the '$rld! The internati$nal
c$(petit$rs $% "HEL are 4eneral Electric, Sie(ens, Alst$( and A""! "HEL $%%ers a
'ide spectr#( $% e6#ip(ent, sste(s and services in the %ield $% p$'er, trans(issi$n,
ind#str, transp$rtati$n, $il 5 &as, n$n.c$nventi$nal ener& s$#rces and
telec$((#nicati$n! D$'er sect$r c$nstit#tes $ver hal% $% its t$tal b#siness! The
c$(pan has 0< (an#%act#rin& divisi$ns, ) service centres and < p$'er sect$r
re&i$nal centres! Its %irst plant 'as set #p at "h$pal in 0B:* #nder technical
c$llab$rati$n 'ith AEI, U> %$ll$'ed b three ($re (a2$r plants at Hard'ar,
Hderabad and Tir#chirapalli 'ith ?#ssian and C9ech$sl$vak assistance!
P+$ducts L se+#icesM
"HEL (an#%act#res $ver +,, pr$d#cts #nder ;, (a2$r pr$d#ct &r$#ps!
The c$(pan has installed e6#ip(ent %$r $ver 0,,,,,, (' $% p$'er &enerati$n %$r
#tilities, captive and ind#strial #sers! Its stren&ths are c$(parable pr$d#ct ran&e and
c$st c$(petitiveness 'ith %$rei&n (an#%act#rers! The c$m9any en2$s a cr#cial
advanta&e $% depreciated assets! The c$(pan is c$st.c$(petitive 'hen it c$(es t$
p$'er plant e6#ip(ent and has ba&&ed a n#(ber $% p$'er pr$2ect $rders placed in
India a&ainst $pen internati$nal c$(petitive biddin&!
The c$(pan has 2$int vent#re 'ith Sie(ens %$r servicin& $ld Indian
%$ssil %#el p$'er plants and 'ith 4E %$r desi&nin& $% heav.d#t &as t#rbines! Thirt.
t'$ ther(al p$'er stati$ns e6#ipped 'ith "hel3s &eneratin& sets have been &iven
pr$d#ctivit a'ards b the p$'er (inistr! =% these p$'er stati$ns, ei&ht have
BSPATIL )<
FUNDAMENTAL AND TECHNICAL ANALYSIS
received &$ld (edals! The a'ards have been &iven %$r (erit$ri$#s and e%%icient
per%$r(ance based $n acc$#nt $% red#ced inp#ts!
The c$(pan alread (an#%act#res pr$d#cts re6#ired b the
distrib#ti$n sste(s like trans%$r(ers, s'itch&ears etc! The c$(pan is plannin&
t$'ards bec$(in& an applicati$n service pr$vider! The c$(pan 'ill c$ntin#e t$
%$c#s $n pr$2ect (ana&e(ent, red#cin& ccle ti(e and c$st c$ntr$l! In the p$'er
sect$r, the c$(pan plans t$ $btain a part $% the b#siness &enerated b independent
p$'er pr$d#cers thr$#&h a c$(binati$n $% appr$aches incl#din& c$ns$rti#( r$#te,
e6#it participati$n and li(ited %inancial sndicati$n!
I It has e6#ipped itsel% 'ith the ne' tpe $% $nce.thr$#&h desi&n b$iler
techn$l$&, and %$r p$ll#ti$n c$ntr$l . ba& %ilter techn$l$&! "HEL entered int$ ne'
b#siness in inte&rated &asi%icati$n c$(bined ccle sste(s, c$al 'asheries, and L?T
sste(s! In itAs e/istin& b#sinesses $% transp$rtati$n, trans(issi$n 5 ind#str! "HEL
is p#rs#in& $pp$rt#nities in EMU c$aches, l$c$ re%#rbish(ent, &as.ins#lated s'itcher,
HLDC ins#lat$rs, and electr$nic (eters! The c$(pan 'ill c$ntin#e t$ %$c#s $n
pr$d#ct devel$p(ents in $rder t$ %$ster its &r$'th strate&! The electr$nics divisi$n
has %$raed int$ tracti$n b#siness and received a lar&e $rder %r$( D$T %$r s'itchin&
e6#ip(ent!
"HEL has devel$ped a ne' series c$(pensati$n sche(e Fle/ible AC
Trans(issi$n Sste( 7FACTS8 %$r red#cin& p$'er l$sses and speed trans(issi$n!
The FACTS 'ill enhance p$'er trans%er capabilit $% the sste( and red#ce
trans(issi$n l$sses in <,, kL lines c$nsiderabl! The c$(pan has als$ devel$ped an
a#t$(atic device that ad2#sts itsel% t$ the sste(3s re6#ire(ent in less than 0,
(illisec$nds! It red#ces sste( l$sses and i(pr$ves p$'er sste( stabilit in hi&h.
v$lta&e trans(issi$n lines!
BSPATIL ):
FUNDAMENTAL AND TECHNICAL ANALYSIS
>e ?isks
*elay in ca9acity e;9ansi$n
The c$(pan3s ;-,,,, MF $% $rder %l$' %$r "HEL $ver FY,B.0+E, in additi$n t$
the e/istin& str$n& $rder backl$&! An dela in sec$nd phase $% e/pansi$n %r$(
0,,,,, MF t$ 0:,,,, MF c$#ld severel i(pact "HEL3s earnin&s, &iven the str$n&
deliverables $ver ne/t three.%$#r ears! The %irst phase $% e/pansi$n %r$( *,,,, MF
t$ 0,,,,, MF had been delaed b nine ($nths!
Sl$=d$=n in 9ace $% 9$=e+ +e%$+ms
4iven the recent ($(ent#( in p$'er re%$r(s, it is e/pected the balance Eleventh
Dlan $rders and -,1 $% T'el%th Dlan $rders t$ be placed b FY0+! An si&ni%icant
dela in the a'ardin& activit c$#ld be a h#&e da(pener %$r "HEL3s $#tl$$k &$in&
ahead, &iven that the c$(pan is the (arket leader 7*:1 (arket share in c$#ntr3s
installed capacit as in FY,-8!
Inc+ease in 9+i#ate sect$+ in#estments in 9$=e+ 9+$"ects > intensi%yin6
c$m9etiti$n
As per CEA, ;:1 $% the p$'er capacit additi$n in the T'el%th Dlan 'ill be
#ndertaken b the private sect$r! An s#bse6#ent chan&e in the (i/, in %av$#r $% the
private sect$r, c$#ld res#lt in l$'er $rder intake %$r "HEL! Fhile central and state
sect$r pr$2ects are "HEL3s %$rte 7-,1 pl#s (arket share8, the c$(pan3s (arket share
in private sect$r pr$2ects has been l$'er 7+,.+:18 $n acc$#nt $% sti%% c$(petiti$n!
Sti%% in9ut 9+ices c$uld a%%ect ma+6ins
Alth$#&h it have n$t b#ilt in bene%its $n acc$#nt $% ra' (aterial pricin& $ver FY,B
0+E, an #nprecedented rise in inp#t c$sts ab$ve FY,-.,)E levels c$#ld da(pen
"HEL3s (ar&ins! E/ec#ti$n delas c$#ld lead t$ de.ratin& The re.ratin& in "HEL3s
BSPATIL )*
FUNDAMENTAL AND TECHNICAL ANALYSIS
val#ati$ns $ver the past $ne ear b#ilds in str$n& visibilit $ver the ne/t %e' ears!
The ke c$ncern n$' is "HEL3s abilit t$ e/ec#te this h#&e $pp$rt#nit, %ailin&
'herein c$#ld lead t$ the st$ck bein& de.rated!
Lal#e anch$r
ris- :ree rate Beta EMRP
A4eraAe Di4i;e+; pay7ut rati7 22&28
Re@uire; rate 7: rate !8&) 8 !&! &2
E9pecte; Ar78t6 rate i+ ;i4i;e+; !)&02
P/E Ratio &8!
AF< PE rati7 2%&'(
CeiA6te; PE rati7 !)&'8
E/pected %#t#re price $% the "HEL C$(pan
*ear 2008 2009 2010
Falue a+c6er 2!%2&%0 2'0'&(2 %(2&)2
Calculati$n $% Int+insic #alue
A#e+a6e *i#idend 9ay$ut +ati$> sum $% A yea+s *PRK A
ReJui+ed +ate $% +ate> +is8 %+ee +ate ?2!etaNEMPR5
BSPATIL )-
Period & months 2008/03 2009/03 2010/03 CA<R
INCOME
#et Operati+A I+c7,e 20822&)2 2('!&'( 2('&) !&20
EXPENSES
Material C7+su,pti7+ !0!22&'2 !2%0'&)) !(!2&28 !&2!
Ma+u:acturi+A E9pe+ses 2('2&!!) %0))&! %80(&8%( !&2(
Pers7+el E9pe+ses 22!&(0 28%'&!'8 %!0)&222 !&0
$elli+A E9pe+ses 2(8&2'%2 2''&(%!( %!0&0!%8 !&!2
A;,i+istrati4e E9pe+ses (2&% !0%8&8() !!((&2!8 !&!0
C7st 7: $ales 16,410.45 19,528.03 23,281.20
Rep7rte; PBDIT 4,412.17 5,443.70 6,666.41
Ot6er Recuri+A I+c7,e '8%&(%28 !220&2'' !0!&)( !&2)
A;Buste; PBDIT 5,195.60 6,664.28 8,568.05
Depreciati7+ 228&2)22 2'%&%!'! 288&!0( !&0)
A;Buste; PBIT 4,937.04 6,390.96 8,279.14
Fi+a+ical E9pe+ses (!&%((! %&(20') %'&)(%% 0&2
A;Buste; PBT 4,895.69 6,351.51 8,241.49 !&%'
Ta9 C6arAes !''!&0( 2%2&%(' %2%!&)!' !&%2
A;Buste; PAT 3,124.65 3,959.17 5,009.88
#7+/recurri+A Ite,s /!%&()0% /8&8220) /2&'8)02 0&))
Ot6er #7+/cas6 A;Bust,e+ts 0&'8
REPORTED PAT 3,111.19 3,950.34 5,004.09
+7& 7: s6ares 2(&(8 2(&(8 2(&(8
Expecte EPS !OR " #E$R %&'()* %+%("' &),(,&
FUNDAMENTAL AND TECHNICAL ANALYSIS
E;9ected 6+$=th +ate in di#idend> a#6 $% +etenti$n +ati$N a#6 $%
RE
PKE RATI> AV4 *PR K 2+eJui+ed +ate $% +is80e;9 6+$=th +ate in
di#5
AV4 PE +ati$> A yea+s PE +ati$K A
&ei6hted PE +ati$> calculated PE +ati$?AV4 PE +ati$K@
Value anch$+ > =ei6hted PE +ati$N e;9ected ma+8et 9+ice
L&T COMPANY ANALYSIS
BSPATIL ))
FUNDAMENTAL AND TECHNICAL ANALYSIS
0! C$(pan %inancial health
The %inancial state(ents $% the c$(pan can be #sed t$ #nderstand and
eval#ate the %inancial per%$r(ance and health $% the c$(pan! ?ati$ analsis helps an
invest$r t$ deter(ine the %inancial stren&ths and 'eakness $% the c$(pan!
The %$ll$=in6 is the +ati$ analysis $% the B3EL C$m9any
L5T C$(pan balance sheet and pr$%it and l$ss acc$#nt
Balance Sheet
Mar E0% Mar E0( Mar E02 Mar E0) Mar E0'
$7urces O: Fu+;s
T7tal $6are Capital 2(8&)' 2(&88 22&8 2'&(8 2)&)2
E@uity $6are Capital 2(8&)' 2(&88 22&8 2'&(8 2)&)2
$6are Applicati7+ M7+ey 0&0( 0&00 0&00 0&00 0&00
Reser4es %12'&2% 21'!'&22 %1%!2&22 (128%&%2 21)8%&82
Re4aluati7+ Reser4es %(&%( %2&)! %0&0 2&%' 2'&%
#et 87rt6 %12)2&28 21''2&0( %1%)&!% (1)(0&!' 21')8&(%
$ecure; L7a+s 21'0%&!! !10(2&22 '%&'2 ()2&' 2(2&(0
"+secure; L7a+s ('2&8 2'&!0 !10)2&%( 8'&'8 !18%2&%2
T7tal De5t %1!')&00 !1%2(&%2 !182&0) !1(2%&2' 210''&'2
T7tal Lia5ilities )1'%8&28 (10&% 21228&! )10%&'( '18()&!8
Applicati7+ O: Fu+;s
<r7ss Bl7c- )12%!&' 210%8&!2 21!0)&22 21%00&)8 218')&%0
BSPATIL )B
FUNDAMENTAL AND TECHNICAL ANALYSIS
Less= Accu,& Depreciati7+ 2122)&!2 !10(&)% !108&2( 82&22 !1!22&8%
#et Bl7c- %1'2&)' 88&22 !10!'&0! !1%!8&() !1'2%&('
Capital C7r- i+ Pr7Aress '2&)0 2)&2% )2&82 28)&0) ('!&22
I+4est,e+ts !1!)0&%' )2&88 )0&'0 !1!&22 %1!0(&((
I+4e+t7ries 2120&0! !18!2&%0 21%!0&8( 212!0&2' %100!&!(
$u+;ry De5t7rs !1820&%' %1%!(&28 %1)%&)0 (18!(&!) 2120(&)(
Cas6 a+; Ba+- Bala+ce 2'&!! 282&02 %2(&)' %8&'! %&)8
T7tal Curre+t Assets (1'!&( 21(08&% )1)2&!! '1(2%&!( 1(&()
L7a+s a+; A;4a+ces !1(8(&2% !1(2%&%( !18)0&!8 210)!&20 21((&!(
Fi9e; Dep7sits (!&(2 %&22 ('%&%2 !8(&( !00&'2
T7tal CA1 L7a+s 3 A;4a+ces )12(2&(( )122&( 81)2&)( 1))&!% !210(&%2
Curre+t Lia5ilities (1%)0&'% (1!!&2 2102%&2% )1!0)&0( 81%)2&0!
Pr74isi7+s (2(&'2 ))0& '(&)( !10!2&%' !1!80&!%
T7tal CL 3 Pr74isi7+s (1'82&(8 (1822&( 218!'&8' '1!2!&(! 12(2&!(
#et Curre+t Assets !1(2&) 210'2&22 %1!((&'' 212('&'2 2120'&2!
Miscella+e7us E9pe+ses )&8 ()&2! %&8 2!&8 &8(
T7tal Assets )1'%8&28 (10&% 21228&! )10%&'( '18()&!8
C7+ti+Ae+t Lia5ilities 2)2&' )22&8) )22&!0 %02&2 2'0&22
B77- Falue .Rs0 !(!&88 220&(2 22)&( %%2&)! 202&)2
Profit & Loss account
Mar E0% Mar E0( Mar E02 Mar E0) Mar E0'
I+c7,e
$ales Tur+74er 1%!&8 1!'&22 !%1(0(&2' !210%0&8! !'18%&%'
E9cise Duty 2!8& 2'2&20 2!(&2) 22%&8) %%8&08
#et $ales 1(!2& 1)(2&%2 !%1!8&'! !(1'')&2 !'1)(2&2
Ot6er I+c7,e 2(8&2! %!&!2 )%(&( 22'&22 (2&80
$t7c- A;Bust,e+ts /!&!2 (%2&2 8)&8( /!0%&2( !2!&')
T7tal I+c7,e 1))0&02 !01()&0) !%1!!&( !2120!&2% !8122)&82
E9pe+;iture
Ra8 Materials %1000&2 %1'2&0) 212!!&8 (12!0&'8 21%20&8
P78er 3 Fuel C7st )2)&( )&! 0&%% 22!&20 %08&!%
E,pl7yee C7st ))8&(0 )'8&08 ')(&2! 80&0% !1228&2!
Ot6er Ma+u:acturi+A E9pe+ses 2180!&'' (100&)( 21!'0&22 )1)('&'0 '1(2!&0'
$elli+A a+; A;,i+ E9pe+ses !1!((&!2 ))2&2! 8''&)0 )&2 !1222&80
Miscella+e7us E9pe+ses 2!(&(0 !!&! !('&20 !22&00 !))&!2
Pre7perati4e E9p Capitalise; /!&8 /0&'( /%&!2 /!&8 /%&%0
T7tal E9pe+ses 81(8(&2' 1%%&%2 !21228&) !%1%8&'! !21'2(&0(
Operati+A Pr7:it 2'&2' '%8&2) !10!'&8) !128(&00 210(%&0!
PBDIT !1!'2&(8 !1!2&'! !1)22&80 !18!!&22 21202&8!
I+terest %88&!% 2'%&!2 280&2! %2!&%( %%!&()
PBDT '8'&%2 82)&2) !1%'2&2 !1(0&!8 21!'!&%2
Depreciati7+ %0(&2' 8(&2% 8'&22 !0'&!2 !)0&!%
Ot6er Critte+ O:: 0&00 0&00 0&00 0&00 0&00
Pr7:it Be:7re Ta9 (82&'8 ''2&0% !128(&'' !1%8%&0) 210!!&22
E9tra/7r;i+ary ite,s (&%2 (&2% 8&02 /!&82 /2&%(
PBT .P7st E9tra/7r; Ite,s0 (8'&!% '')&2) !122&' !1%8!&2! 21002&88
Ta9 ''&!0 2%)&08 %02&2 %))&!2 )0!&8'
Rep7rte; #et Pr7:it (%%&!0 2%2&'2 8%&82 !10!2&!( !1(0%&02
BSPATIL B,
FUNDAMENTAL AND TECHNICAL ANALYSIS
T7tal Falue A;;iti7+ 21(8%&)2 21)!0&2 '10()&'! 818'8&% !01(0%&0)
Pre:ere+ce Di4i;e+; 0&00 0&00 0&00 0&00 0&00
E@uity Di4i;e+; !8)&80 !&0( %2'&2! %02&22 %)8&22
C7rp7rate Di4i;e+; Ta9 2%&% 22&2( (&(! (2&% 2%&%(
Per s6are ;ata .a++ualise;0
$6ares i+ issue .la-6s0 21(8)&) !12((&02 !12&2( !1%'%&8) 218%2&'!
Ear+i+A Per $6are .Rs0 !'&(2 (2&82 '2&'2 '%&)' (&2%
E@uity Di4i;e+; .D0 '2&00 800&00 !1%'2&00 !1!00&00 )20&00
B77- Falue .Rs0 !(!&88 220&(2 22)&( %%2&)! 202&)2
Rati$s calculati$ns
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
0 Net '$rkin& capital CA.CL +,:,-!+0 +,:<-!-+ ;,0<<!--
+ C#rrent rati$ CAJCL 0!+* 0!;* 0!:<
; Q#ick rati$ CA.7st$ckNprepaid e/p8JCL ,!B; 0!,; 0!0+
< Invent$r t#rn$ver rati$ C=4SJav& INL :!+< *!,* :!;,
: Debt e6#it rati$ L$n& tr( D"TJ Sh h$lders e6 ,!;* ,!;0 ,!::
* Interest c$vera&e rati$ E"ITJINTE?ST -!:+ :!,; <!<;
- 4r$ss pr$%it (ar&in 4r$ss pr$%it J sales 0,!*0 -!B0 -
) Net pr$%it rati$ EATJ Net sales -!-< *!*B -!;;
B C$st $% &$$ds s$ld rati$ C=4SJ net salesT0,, )B!00 B,!*0 B+!B<
0, =peratin& pr$%it rati$ E"ITJ Net sales 00!:+ )!*; -!**
00 ?et#rn $n e6#it
Net pr$%itJ share h$lders
e6#it +<!<< +0!B: +B!<-
0+ ?et#rn $n assets Net pr$%itJt$tal assets ++!00 +0!)) +<!0)
0;
?et#rn $n capital
e(pl$ed E"ITJ T$tal capital :<!B) <<!,) ;-!*0
0< EDS
Net pr$%it available e6 shJ
N= shares <B!:; -;!*- -:!-+
0: DDS
Div paid t$ $rd sh J N$ $%
shares 0; ++ +-!:
0* DJE MDSJEDS ;+!*B ;;!,+ 0;!0<
0- Drice t$ b$$k val#e rati$ MDSJ"DS -!BB -!+: ;!)-
0) "$$k val#e per share Net '$rthJ n$ $% shares +,+!*: ;;:!*0 +:*!B<
0B Dividend pa$#t rati$ DDSJEDST0,, +*!+: +B!)* ;*!;+
+, Earnin& ield EDSJMDS T0,, ;!,* ;!,; -!*0
+0 Dividend ield DDSJMDST0,, ,!), ,!B, +!-*
BSPATIL B0
FUNDAMENTAL AND TECHNICAL ANALYSIS
++ T$tal asset t#rn$ver rati$ C=4SJt$tal asst +!,, +!+, +!;<
+; Capital t#rn$ver rati$ C=4SJcapital e(pl$ed +!-< +!B, ;!*-
0! Net '$rkin& capitalI
Sl!n
$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
0 Net '$rkin& capital CA.CL
+,:,-!
+0
+,:<-!
-+
;,0<<!
--
Here 'e can see that the L5T c$(pan has (aintained a c$nstant NFC 'hich is a
&$$d si&n it i(plies that the c$(pan is able t$ &$$d li6#idit t$ its creat$rs
+! C#rrent rati$
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
+ C#rrent rati$ CAJCL 0!+* 0!;* 0!:<
The sh$rt ter( credit$rs pre%er hi&h c#rrent rati$ since it red#ces their risk! As a share
h$lder $ne sh$#ld pre%er l$' c#rrent rati$ s$ that the c$(pan (a #se its c#rrent
assets %$r e/pansi$n p#rp$se! Here 'e can see that the c$(pan3s c#rrent rati$ has
red#ced $ver a peri$d $% ti(e s$ 'e can sa that the c$(panies #sin& its c#rrent assets
%$r e/pansi$n p#rp$se!
;! Q#ick rati$
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
; Q#ick rati$ CA.7st$ckNprepaid e/p8JCL ,!B; 0!,; 0!0+
Meas#res assets that are 6#ickl c$nverted int$ cash and the are c$(pared 'ith
c#rrent liabilities! This rati$ reali9es that s$(e $% c#rrent assets are n$t easil
c$nvertible t$ cash e!&! invent$ries! In the rati$ ab$ve 'e can see that the c$(pan3s
6#ick rati$ red#ced $ver a peri$d $% ti(e!
<! Invent$r t#rn $ver rati$!
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
< Invent$r t#rn$ver rati$ C=4SJav& INL :!+< *!,* :!;,
BSPATIL B+
FUNDAMENTAL AND TECHNICAL ANALYSIS
This rati$ (eas#res the st$ck in relati$n t$ t#rn$ver in $rder t$ deter(ine h$' $%ten
the st$ck t#rns $ver in the b#siness! This rati$ sh$#ld be hi&her beca#se it indicates
that the c$(pan is e%%icientl c$nvertin& its invent$r int$ sales!
+,,-I 0+J:!+< O +!+B ti(es
+,,*I 0+J*!,* O 0!B) ti(es
+,,:I 0+J:!;, O +!+* ti(es
:! Debt e6#it rati$!
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
: Debt e6#it rati$ l$n& tr( D"TJ Sh h$lders e6 ,!;* ,!;0 ,!::
The debt t$ e6#it rati$ sh$'s that %$r ever 0 r#pee $% shareh$lders %#nds in +,,-
there 'as ,!;* r#pee $% debt! This c$(pares t$ ,!:: r#pee in +,,:!
*! Interest c$vera&e rati$!
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
* Interest c$vera&e rati$ E"ITJINTE?ST -!:+ :!,; <!<;
This rati$, as the na(e s#&&ests indicates the e/tent t$ 'hich a %all in E"IT is
t$lerable in that the abilit $% the %ir( t$ service its interest pa(ents '$#ld n$t be
adversel a%%ected! Here the c$(pan3s Interest c$vera&e rati$ has increased 'hich is
dan&er$#s si&n!
-! 4r$ss pr$%it (ar&in
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
- 4r$ss pr$%it (ar&in 4r$ss pr$%it J sales 0,!*0 -!B0 -
The rati$ ab$ve sh$'s the increasin& trend in the &r$ss pr$%it since the rati$ has
i(pr$ved %r$( -1 in +,,: t$ 0,!*01 $n +,,-! This indicates that the rate in increase
in c$st $% &$$ds s$ld are less than rate $% increase in sales, hence the increased
e%%icienc!
)! Net pr$%it (ar&in
BSPATIL B;
FUNDAMENTAL AND TECHNICAL ANALYSIS
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
) Net pr$%it rati$ EATJ Net sales -!-< *!*B -!;;
The net (ar&in rati$ sh$'s that the (ar&in is %airl stable $ver ti(e 'ith sli&ht
i(pr$ve(ent t$ -!-<1 in +,,-! H$'ever, t$ kn$' h$' 'ell the %ir( is per%$r(in&
$ne has t$ c$(pare this rati$ 'ith the ind#str avera&e $r a %ir( dealin& in a si(ilar
b#siness
B! C$st $% &$$ds s$ld
Sl!n
$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
B
C$st $% &$$ds s$ld
rati$ C=4SJ net salesT0,, )B!00 B,!*0 B+!B<
The c$st $% &$$ds s$ld rati$ sh$'s 'hat percenta&e share $% sales is c$ns#(ed b
c$st $% &$$ds s$ld and c$nversel 'hat pr$p$rti$n is available %$r (eetin& e/penses
s#ch as sellin& and &eneral distrib#ti$n e/penses as 'ell as %inancial e/penses
c$nsistin& $% ta/es interest and dividend and s$ $n!
0, =peratin& pr$%it rati$
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
0, =peratin& pr$%it rati$ E"ITJ Net sales 00!:+ )!*; -!**
Here $peratin& pr$%it rati$ has increased $ver a peri$d $% ti(e 'hich sh$'s %ir(s
abilit t$ 'ithstand adverse ec$n$(ic c$nditi$ns 'hen sellin& price is declinin&!
00! ?et#rn $n e6#it
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
00 ?et#rn $n e6#it Net pr$%itJ share h$lders e6#it +<!<< +0!B: +B!<-
BSPATIL B<
FUNDAMENTAL AND TECHNICAL ANALYSIS
Here the pr$%itabilit t$ $rdinar shareh$lders is bit 'eaker and sh$'in& an
d$'n'ard trend!
0+! ?et#rn $n assets
Sl!n
$ ?ati$ F$r(#la
Year
+,,- +,,*
+,
,:
0+ ?et#rn $n assets Net pr$%itJt$tal assets ++!00 +0!))
+<!
0)
This rati$ &ives $# an idea $n the c$(panAs (ana&e(ent e%%ectiveness in #tili9in&
its assets t$ (ake a pr$%it %$r its shareh$lders
0;! ?et#rn $n capital e(pl$ed
Sl!n
$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
0;
?et#rn $n capital
e(pl$ed E"ITJ T$tal capital :<!B) <<!,) ;-!*0
This rati$ sh$'s h$' e%%icientl the l$n& ter( %#nds $% $'ners and lenders are bein&
#sed!
0<! Earnin&s Der Share
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
0< EDS
Net pr$%it available e6 shJ N=
shares <B!:; -;!*- -:!-+
Fhatever inc$(e re(ains in the b#siness a%ter all pri$r clai(s, $ther than $'ners
clai(s 7i!e! $rdinar dividends8 have been paid, 'ill bel$n& t$ the $rdinar
shareh$lders 'h$ can then (ake a decisi$n as t$ h$' (#ch $% this inc$(e the 'ish
t$ re($ve %r$( the b#siness in the %$r( $% a dividend, and h$' (#ch the 'ish t$
retain in the b#siness! The shareh$lders are partic#larl interested in kn$'in& h$'
(#ch has been earned d#rin& the %inancial ear $n each $% the shares held b the(!
F$r this reas$n, an earnin& per share %i&#re (#st be calc#lated!
BSPATIL B:
FUNDAMENTAL AND TECHNICAL ANALYSIS
0:! Dividend per Share
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
0: DDS Div paid t$ $rd sh J N$ $% shares 0; ++ +-!:
This indicates the dividend paid %$r each share! Shareh$lders '$#ld, nat#rall like t$
receive the (a/i(#( p$ssible dividends %r$( a c$(pan, c$nsistent 'ith its pr$%its
and need %$r retained earnin&s! "#t the c$(pan3s DDS has red#ced drasticall in
L5T C$(pan3s case!
0*! DE rati$
Sl!n
$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
0* DJE MDSJEDS ;+!*B ;;!,+ 0;!0<
The DJE rati$ re%lects the price c#rrentl bein& paid b the (arket %$r each r#pee $%
c#rrentl rep$rted EDS! Hi&h DJE &enerall re%lects l$'er risk andJ$r hi&her &r$'th
pr$spects %$r earnin&s!
The ab$ve rati$ sh$'s that the shares 'ere traded at a (#ch hi&her pre(i#( in +,,-
than 'ere in +,,:! In +,,: the price 'as 0;!0< ti(es hi&her than earnin&s 'hile in
+,,-, the price is ;+!*B ti(es hi&her!
0-! Drice t$ b$$k val#e
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
0- Drice t$ b$$k val#e rati$ MDSJ"DS -!BB -!+: ;!)-
It (eas#res the relati$nship bet'een the (arket price $% an e6#it share 'ith b$$k
val#e per share! The DJ" rati$ is si&ni%icant in predictin& %#t#re st$ck ret#rn! Fir(s
'ith l$' DJ" rati$ had c$nsistentl hi&her ret#rns c$(pared t$ the %ir(s 'ith hi&h
DJ" rati$!
BSPATIL B*
FUNDAMENTAL AND TECHNICAL ANALYSIS
0)! "$$k val#e per share
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
0) "$$k val#e per share Net'$rthJ n$ $% shares +,+!*: ;;:!*0 +:*!B<
This rati$ indicates the net asset val#e $% a c$(pan3s share! A hi&h b$$k val#e
indicates that the c$(pan has str$n& reserves, indicatin& sc$pe %$r b$n#s shares, $%
c$#rse s#b2ect t$ necessar &#idelines $% the SE"I!
0B! Dividend pa$#t rati$
Sl!n
$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
0B Dividend pa$#t rati$ DDSJEDST0,, +*!+: +B!)* ;*!;+
This rati$ l$$ks at the dividend pa(ent in relati$n t$ net inc$(e and can be
calc#lated
+,! Earnin& ield
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
+, Earnin& ield EDSJMDS T0,, ;!,* ;!,; -!*0
This rati$ hi&hli&hts as a percenta&e a c$(pan3s earnin&s vis.a.vis the c#rrent
(arket val#e $% its share! F$r bl#e chip c$(panies this rati$ tends t$ be ar$#nd : per
cent t$ * per cent!
+0! Dividend ield
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
+0 Dividend ield DDSJMDST0,, ,!), ,!B, +!-*
N$tice here there is a decrease in the ield %r$( +,,: t$ +,,-! The (ain reas$n %$r
this is that the dividend per share decreased 'hile at the sa(e ti(e, the price $% a
share increased!
++! T$tal asset t#rn$ver rati$
BSPATIL B-
FUNDAMENTAL AND TECHNICAL ANALYSIS
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
++ T$tal asset t#rn$ver rati$ C=4SJt$tal asst +!,, +!+, +!;<
T$tal asset t#rn$ver rati$ (eas#res the e%%icienc $% a %ir( in (ana&in& and #tili9in&
its assets! The hi&her rati$ indicates the ($re e%%icient (ana&e(ent!
+;! Capital t#rn $ver rati$
Sl!n$ ?ati$ F$r(#la
Year
+,,- +,,* +,,:
+; Capital t#rn$ver rati$ C=4SJcapital e(pl$ed +!-< +!B, ;!*-
BSPATIL B)
FUNDAMENTAL AND TECHNICAL ANALYSIS
Capital t#rn$ver rati$ (eas#res the e%%icienc $% a %ir( in (ana&in& and #tili9in& its
capital! The hi&her rati$ indicates the ($re e%%icient (ana&e(ent!
Value anch$+ $% the LLT C$m9any is in the ne;t 9a6e<
BSPATIL BB
FUNDAMENTAL AND TECHNICAL ANALYSIS
Pe+i$d L m$nths @11/K1B @11-K1B @1,1K1B CA4?
I)CME
Net =peratin& Inc$(e +,:+0!;B +**!+B +--:*!;B 0!0*
EXPE)SES
Material C$ns#(pti$n +*!:< *:+B!:< -;0-!;- 0!0+
Man#%act#rin& E/penses B00+!<B 0,-,0!)+ 0+:*)!;< 0!0-
Ders$nnel E/penses 0<*)!<B 0-0;!B0 +,,,!;* 0!0-
Sellin& E/penses +;+!): +*B!B* ;0+!BB 0!0*
Ad(inistrative E/penses 0;<-!<* 0:0:!:B 0-,<!*B 0!0+
Capitali9ed E/penses .<!), .*!B- .0,!0; 0!<:
C$st $% Sales 0-,B);!,< +,,-+;!)* +;,)B;!*0
?ep$rted D"DIT +,:!;: ;,0<+!<; ;,)*+!--
=ther ?ec#rrin& Inc$(e <B;!B; :;+!,+ :-;!,: 0!,)
Ad2#sted D"DIT ;,,;+!+) ;,*-<!<: <,<;:!)+
Depreciati$n 0)-!)* ++,!<, +!:* 0!0-
Ad2#sted D"IT +,)<<!<+ ;,<:<!,* <,0--!+*
Finanical E/penses ;<-!)B ;*:!0; ;!++ 0!,:
Ad2#sted D"T +,<B*!:; ;,,))!B; ;,-B<!,;
Ta/ Char&es -+:!-* )-:!0: 0,::!+) 0!+0
Ad2#sted DAT 0,--,!-- +,+0;!-) +,-!-:
N$n.rec#rrin& Ite(s ,!:B ,!+) ,!0; ,!<)
=ther N$n.cash
Ad2#st(ents
:!:+ .:!-, :!)B .0!,;
?ED=?TED DAT 0,--*!)) +,+,)!;* +,-<<!-)
n$! $% shares ;;!<, ;B!;- <*!<+ 0!0)
ea+nin6s 9e+ sha+e AB<@1 AC<1- A-<,B
BSPATIL 0,,
L3T C7,pa+y i+c7,e state,e+t
Pe+i$d L m$nths @11.K1B @11CK1B @11AK1B @11DK1B @11BK1B
I)CME
Net =peratin& Inc$(e 0-,*<:!+B 0<,--*!B: 0;,0)B!-0 B,*<:!;+ B,<0+!BB
EXPE)SES
Material C$ns#(pti$n :,0BB!++ <,*0<!,+ :,0+:!0< ;,+B*!<- ;,,,+!,-
Man#%act#rin& E/penses -,-:B!+, *,)*B!+, :,+*,!:: <,,-)!); ;,<!-0
Ders$nel E/penses 0,+!+0 )B,!,; -*<!:0 *-)!,) **)!<
Sellin& E/penses +,,!)< 0:*!-< 0-,!0) 000!0* *,B!;B
Ad(inistrative E/penses 0,0B-!BB B-+!++ )*0!+- -<)!:0 -<B!0;
Capitalised E/penses .;!; .0!)B .;!0: .,!-< .0!B)
C$st $% Sales 0:,*0+!0* 0;,:,,!;+ 0+,0-)!:, ),B0+!;0 ),<):!-+
?ep$rted D"DIT +,,;;!0; 0,+-*!*; 0,,00!+0 -;;!,0 B+-!+-
=ther ?ec#rin& Inc$(e <!:* ;;B!<) +;,!B0 ;<,!*- )!0;
Ad2#sted D"DIT +,<B0!*B 0,*0*!00 0,+<+!0+ 0,,-;!*) 0,;0:!<,
Depreciati$n 0*,!0; 0,-!0+ )-!:+ )<!:; ;,<!:-
Ad2#sted D"IT +,;;0!:* 0,:,)!BB 0,0:<!*, B)B!0: 0,,0,!);
Finanical E/penses ;;0!<* ;+0!;< +),!:0 +-;!0: )!0;
Ad2#sted D"T +,,,,!0, 0,0)-!*: )-<!,B -0*!,, *++!-,
Ta/ Char&es *,0!)- ;**!0+ ;,+!+B +;*!,) --!0
Ad2#sted DAT 0,;B)!+; )+0!:; :-0!), <-B!B+ :<:!*,
N$n.rec#rrin& Ite(s 0!+< 0))!,< <,<!,; :,!<) +*!B0
=ther N$n.cash Ad2#st(ents .:!;< .0!): )!,+ <!:; <!;:
?ED=?TED DAT 0,;B<!0; 0,,,-!-+ B);!): :;<!B; :-*!)*
n$! $% shares +)!;; 0;!-< 0+!BB 0+!<< +<!)-
ea+nin6s 9e+ sha+e D-<@, .B<BD .A<.D DB<11 @B<@1
?etained Earnin&s 0,,+)!+< -0)!-, *+)!*+ ;*,!B: +:+!-)
DividendJShare 0;!,, ++!,, +-!:, ),!,, -!:,
t$tal dividend ;*)!+B ;,+!+) ;:-!++: BB:!+ 0)*!:+:
?etenti$n rati$ ,!-< ,!-0 ,!*< ,!*- ,!<<
?eserves 5 S#rpl#s :,*);!): <,;!;+ ;,;0+!+: +,-0-!:: ;,+-B!:;
?=E +;!;* +0!;: +)! 0)!)+ 0*!;:
(arket price 0,*0B!0: +,<;+!-, BBB!: :-<!;: 0)<!::
DE rati$ ;+!B, ;;!0- 0;!+, 0;!;* -!B*
FUNDAMENTAL AND TECHNICAL ANALYSIS
ris- :ree rate 5eta EMRP
Di4i;e+; pay7ut rati7 )&)
re@uire; rate 7: rate !' 8 !
e9pecte; Ar78t6 rate i+ ;i4i;e+; !2&2
p/e ratio )(&2)
AF< PE rati7 2%&!)
8eiA6te; pe rati7 (%&'!
The %$ll$=in6 ta!le sh$=s the e;9ected ma+8et 9+ices $% LLT
C$m9any<
year 2008 200 20!0
4alue a+c67r 2%22&%% 2(2!&%8 228(&(!
The %$ll$'in& is the L5T c$(pan (ana&e(ent revie'
The %$ll$'in& lines e/plain the chair(an3s speech $% L5T C$(pan it tells
ab$#t the c$(pan3s strate& $% %#t#re e/pansi$n and devel$p(ent strate&!
Pe+%$+mance $#e+#ie=:
India is $ne $% the %astest &r$'in& ec$n$(ies &l$ball 'ith 4DD &r$'in& at
B!<1 last ear! Hi&h capacit #tilisati$n acr$ss vari$#s sect$rs is %#ellin& an #p trend
in capital e/pendit#re! The scale $% invest(ent in in%rastr#ct#re envisa&ed in the 00th
Five Year Dlan 7+,,-.+,0+8 'ill call %$r &reater en&a&e(ent b the private sect$r and
internati$nal instit#ti$ns! All these are lead indicat$rs %$r &r$'th!
The c$nd#cive b#siness envir$n(ent c$#pled 'ith a sle' $% (eas#res taken b the
C$(pan %$r i(pr$ve(ent $% $perati$nal e%%icienc, instit#ti$nali9ati$n $% a risk
(ana&e(ent %ra(e'$rk and ($re 2#dici$#s selecti$n $% pr$2ects, have ielded
si&ni%icant bene%its! In Financial Year +,,*.+,,-, the C$(panAs $rder in%l$'s 5
BSPATIL 0,0
FUNDAMENTAL AND TECHNICAL ANALYSIS
sales have &r$'n b ;-1 and 0B1 respectivel! The C$(pan ba&&ed its lar&est ever
$rder in d$(estic 5 internati$nal (arkets s#ch as e/pansi$n 5 ($dernisati$n $%
Delhi Internati$nal Airp$rt and an $%%sh$re plat%$r( pr$2ect in Qatar! The $rder b$$k
as $n March ;0, +,,- st$$d at ?s! ;*B "n incl#din& ?s! *0 "n %r$( internati$nal
b#siness! The C$(pan has achieved i(pr$ve(ent in (ar&ins in all its b#siness
se&(ents %$r the sec$nd ear! The S#bsidiar and Ass$ciate C$(panies have als$
per%$r(ed 'ell! D#rin& the ear, the C$(pan iss#ed b$n#s shares in the rati$ $% 0I0
and rec$((endedJpaid dividend $%.?s! 0; per share $n a %ace val#e $% ?s! + per
share! The (arket capitali9ati$n $% the C$(pan has increased %#rther %r$( ?s! ;;<
"n t$ ?s! <:* "n d#rin& the ear and has $#tper%$r(ed the Sense/!
In#estin6 %$+ 9+$%ita!le 6+$=th:
Invest(ents are the $/&en $% &r$'th! Fithin the lar&er c$nte/t $% the
c$#ntrAs increasin& invest(ents in b#ildin& a bri&hter %#t#re, the C$(pan is als$
investin& in (#ltiple spheres . pe$ple, techn$l$&, capacit e/pansi$n b$th
d$(esticall 5 internati$nall and brand b#ildin&! This is essential %$r s#stainin& the
&r$'th ($(ent#( and c$ntin#$#s val#e creati$n!
Pe$9le 0 Talent mana6ement:
Talent ac6#isiti$n and retenti$n is $ne $% the ke res#lt areas %$r $#r seni$r
(ana&ers! =n an $n.&$in& basis, the C$(pan rene's, re2#venates and adds H#(an
?es$#rce Mana&e(ent 5 Devel$p(ent sste(s, pr$cesses and practices t$ its
repert$ire and peri$dicall d$es c$(pensati$n bench(arkin& s$ as t$ ens#re a vibrant
and ($tivated '$rk%$rce! The C$(pan is c$nstantl h$nin& pe$ple (ana&e(ent
leadership skills $% the e(pl$ees and is increasin&l investin& in trainin& centers
acr$ss India! Inn$vative h#(an res$#rce initiatives like ACa(p#s t$ C$rp$rateA, la#nch
$% an e.learnin& p$rtal . AAn Ti(e Learnin&A, b#dd re%errals %$r talent ac6#isiti$n,
have been la#nched! As a res#lt, the C$(pan has been able t$ s#bstantiall increase
its h#(an res$#rce!
BSPATIL 0,+
FUNDAMENTAL AND TECHNICAL ANALYSIS
Techn$l$6y 0 Buildin6 $n c$+e en6inee+in6 st+en6th:
4iven $#r c$((it(ent t$ bec$(in& a kn$'led&e.based pre(i#(
c$n&l$(erate, invest(ents in techn$l$& acr$ss all b#sinesses c$ntin#e t$ re(ain at
the %$re%r$nt $% the C$(panAs b#siness strate&! The C$(pan has set #p
En&ineerin& desi&n centers at M#(bai, "ar$da, Chennai, "an&al$re, and Delhi as
'ell as in the Middle East! In line 'ith $#r $b2ective $% e(er&in& as a plaer 'ith
end.t$.end capabilities in the p$'er sect$r, the C$(pan has si&ned an a&ree(ent
'ith Mits#bishi Heav Ind#stries Li(ited, Eapan %$r s#per critical b$iler techn$l$&
and is cl$se t$ achievin& a si(ilar tie.#p in the %ield $% t#rbines!
Inte+nati$nal Business 0 St+en6thenin6 9+esence !ey$nd India:
The C$(pan c$ntin#es t$ %$r&e alliances and t$ invest in internati$nal
b#siness %$r enhancin& capabilities and achievin& its visi$n $% bec$(in& an Indian
(#ltinati$nal 'ith %$c#s in the Middle East and China! E$int vent#res have been set
#p in >#'ait and Sa#di Arabia %$r electr$(echanical c$nstr#cti$n in $il 5 &as, p$'er
and in%rastr#ct#re sect$rs! The M$d#lar Fabricati$n ard bein& set #p at S$har, =(an
'ill stren&then the C$(panAs presence in the 4#l% re&i$n! The C$(pan is receivin&
enc$#ra&in& resp$nse %r$( clients %$r pr$2ect e/ec#ti$n and Desi&n 5 En&ineerin&
services! The C$(pan has set #p (an#%act#rin& %acilities in China %$r hi&h. end
s'itch&ear 5 r#bber pr$cessin& (achiner and a %act$r is als$ bein& b#ilt %$r
ind#strial valves! These initiatives 'ill accelerate the C$(panAs thr#st t$'ards its
ULakshaA tar&et $% achievin& +:1 reven#es %r$( internati$nal b#siness!
Ca9acity E;9ansi$n:
The C$(pan is e/pandin& capacit internati$nall and 'ithin India!
S#bstantial capacit a#&(entati$n at Ha9ira 'ill help #s address the &r$'in& de(and
in $il 5 &as ind#str! The Electrical 5 Electr$nics divisi$n is e/pandin& its capacit at
Ms$re, Ah(edna&ar and Mahape t$ take care $% rapid &r$'th in the sect$r! The
C$(pan cr$ssed a (a2$r (ilest$ne 'ith the ina#&#rati$n $% the %irst t'$ #nits at its
;,,.acre ca(p#s in C$i(bat$re! The %acilities %$r the (an#%act#re $% ind#strial valves
BSPATIL 0,;
FUNDAMENTAL AND TECHNICAL ANALYSIS
and s'itchb$ards are alread acc$(plished! The ca(p#s 'ill pr$&ressivel see the
establish(ent $% (an#%act#rin& %acilities %$r advanced t$$lin& and hi&h precisi$n
c$(p$nents in aer$space, n#clear p$'er, de%ence sect$rs etc! The C$(pan is
b#ildin& a state $% the art Heav Li%t.c#(.Dipela vessel in partnership 'ith
Sap#raCrest Detr$le#( "erhad, Malasia that 'ill &ive $%%sh$re installati$n capabilit
and achieve si&ni%icant c$(petitiveness! All the divisi$ns $% the C$(pan have
planned increased invest(ents in ac6#isiti$n and installati$n $% ne' e6#ip(ent and
(an#%act#rin& %acilities!
L$$8in6 Ahead:
As 'e ($ve $n, the C$(pan is 'ell p$siti$ned t$ e/pl$it the $pp$rt#nities
that 'ill e(er&e %r$( hdr$carb$n, in%rastr#ct#re, p$'er, (inerals 5 (etals and
$ther ind#strial sect$rs!
The D#blic Drivate Dartnership ($del is &$in& t$ be the 'a %$r'ard %$r in%rastr#ct#re
pr$2ects in the c$#ntr! L5T In%rastr#ct#re Devel$p(ent Dr$2ects Li(ited has alread
c$ns$lidated its p$siti$n 'ith s$(e c$(pleted pr$2ects and several #nder
i(ple(entati$n acr$ss vari$#s sect$rs! Fith its capabilities a#&(ented thr$#&h the
recent tie.#p %$r (an#%act#re $% s#per critical b$ilers and the pr$p$sed c$llab$rati$n
%$r t#rbines, the C$(pan 'ill be in a p$siti$n t$ set #p c$(plete p$'er pr$2ects!
L5T In%rastr#ct#re Finance C$(pan Li(ited has initiated %#ndin& in the
in%rastr#ct#re se&(ent!
The C$(pan has c$((enced b#ildin& ships at its Ha9ira F$rks! Fe are als$
sc$#tin& %$r a s#itable site in India t$ set #p a '$rld.class %acilit %$r shipb#ildin& and
repair, c$(parable t$ the best '$rld'ide! The de%ence, n#clear p$'er and aer$space
sect$rs sh$' p$tential and pr$(ise! The ?aksha Ud$& ?atna 7?U?8 stat#s, 'hen
&ranted t$ the C$(pan, 'ill %acilitate increased b#siness in De%ence sect$r!
Levera&in& its pr$ven capabilities in c$nstr#cti$n and electri%icati$n %$r the rail'as,
the C$(pan envisa&es e/pandin& its presence in this sect$r! 4iven the health $rder
b$$k p$siti$n and the $pp$rt#nities available, the C$(pan believes that it 'ill be
able t$ achieve s#stained &r$'th!
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FUNDAMENTAL AND TECHNICAL ANALYSIS
I a( happ t$ share that the C$(pan 'as ranked n#(ber 0 in t'$ critical attrib#tes .
AQ#alitA and A?ep#tati$nA $ver a h$st $% $ther c$rp$rates, in The Fall Street E$#rnal
AsiaAs nati$n'ide s#rve $% Indian c$(panies!
T$ c$ncl#de, I 'ish t$ place $n rec$rd ( appreciati$n %$r the $#tstandin&
c$((it(ent and s(art '$rk $% all $#r e(pl$ees! I a( als$ &rate%#l %$r the
c$ntin#in& s#pp$rt $% ( c$llea&#es, $#r c#st$(ers, b#siness ass$ciates, shareh$lders
and (e(bers $% the "$ard! It is this c$llective e%%$rt and s#pp$rt $% each (e(ber $%
L5T 4r$#pAs e/tended %a(il that instills c$n%idence in $#r abilit %$r b#ildin& $n the
pr$%itable &r$'th ($(ent#( int$ the %#t#re!
BSPATIL 0,:
FUNDAMENTAL AND TECHNICAL ANALYSIS
Findin6 and su66esti$n:
,< The %$ll$=in6 ta!le sh$=s the e;9ected ma+8et $% the B3EL st$c8 %$+ the
9e+i$d $% B yea+s i<e @11/ t$ @11-
Analysis:
At present the c$(pan share price is ver attractive and %#nda(entall
#nderval#ed
"eca#se the intrinsic val#e $% the share is +0-,!): and c#rrent (arket price is +,*0!;:
S$ $ne can have b# vie' $n this st$ck %r$( l$n& ter( p$int $% vie'!
S#&&esti$nI Buy %$r l$n& ter( p$int $% vie'!

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EXPECTED MARKET PRICE OF BHEL
particulars
year
2008 200 20!0
F"#DAME#TAL A#ALI$I$ 2!'0&82 2'2)&%' %(!&)2
TECH#ICAL A#AL*$I$ +:,, ;-:,
curre+t ,ar-et price.%!/0%/080 210)!&%2
FUNDAMENTAL AND TECHNICAL ANALYSIS
@< The %$ll$=in6 ta!le sh$=s the e;9ected ma+8et $% the LLT st$c8 %$+ the 9e+i$d
$% B yea+s i<e @11/ t$ @11-
EXPECTED MARKET PRICE OF L3T
Particulars
year
2008 200 20!0
F"#DAME#TAL A#ALI$I$ 2%22&%% 2(2!&%8 228(&(!
TECH#ICAL A#AL*$I$ <<:, 2800
Curre+t ,ar-et price %102(&80
Analysis:
Ab$ve table sh$'s the c$(pan script is (ainl technical driven there is less sc$pe
%$r %#nda(ental analsis! C$(pan3s intrinsic val#e is ?s! +;+:!;; b#t the c#rrent
(arket price is ?s! ;,+<!)! " this 'e can sa that the c$(pan is $verval#ed
acc$rdin& t$ %#nda(ental analsis!

"#t 'hen 'e anal9e b technicall the st$ck is havin& &$$d s#pp$rt and resistance
s$ 'e can sa that the st$ck ($ves #pt$ <<:, in sh$rt r#n and in l$n& ter( the st$ck
is predicted t$ &$ ar$#nd ,,!
S#&&esti$nI I% invest$r at present h$ldin& this st$ck sh$#ld 'ait %$r s$(e ti(e t$ &et
&$$d ret#rn in sh$rt ter( the st$ck (a &$ %$r ?s! <<:, and in the l$n& r#n the st$ck
(a &$ t$ ?s! ,,!
S#&&esti$nI H$ld %$r ti(e bein& and sell 'hen st$ck breaks its previ$#s
s#pp$rt!
C$nclusi$n
BSPATIL 0,-
FUNDAMENTAL AND TECHNICAL ANALYSIS
En&ineerin& is a diverse ind#str 'ith a n#(ber $% se&(ents! A c$(pan %r$(
this sect$r can be a p$'er e6#ip(ent (an#%act#rer 7like trans%$r(ers and b$ilers8,
e/ec#ti$n specialist $r a niche plaer 7like pr$vidin& envir$n(ent %riendl s$l#ti$ns8!
It can be an electrical, n$n.electrical (achiner and static e6#ip(ent (an#%act#rer
t$$
The ec$n$( has been &r$'in& at an avera&e &r$'th rate $% )!) per cent in
the last %$#r %iscal ears 7+,,;.,< t$ +,,*.,-8, 'ith the +,,*.,- &r$'th rate $% B!*
per cent bein& the hi&hest in the last 0) ears! Si&ni%icantl, the ind#strial and service
sect$rs have been c$ntrib#tin& a (a2$r part $% this &r$'th, s#&&estin& the str#ct#ral
trans%$r(ati$n #nder'a in the Indian ec$n$(!
Technical and %#nda(ental analsis is the str$n& the$r accepted '$rld 'ide
s$(e invest$r str$n&l believes $n %#nda(entals $% c$(pan and s$(e believe
technical plas ver i(p$rtant r$le in investin&! "#t it is (ainl depends $n de(and
and s#ppl %$r the st$cks in the st$ck (arket!
An e%%$rt is (ade t$ (ake #nderstand the reader $% this pr$2ect 'hat is
%#nda(ental analsis and 'hat is technical analsis! " this pr$2ect rep$rt $ne can
strive t$ calc#late intrinsic val#e $% the shares and #nderstandin& 'hat &raphs are
sh$'in& ab$#t the script!
Bi!li$6+a9hy
BSPATIL 0,)
FUNDAMENTAL AND TECHNICAL ANALYSIS
,< ($ta8 secu+ities<c$m
@< eJuitymaste+<c$m
B< icicidi+ect<c$m
D< nseindia<c$m
A< !seindia<c$m
C< !hel<c$m
.< la+senta!+$<c$m
Re%e+ence B$$8s
o Secu+ity Analysis and P$+t%$li$ Mana6ement<
P+asanna Chand+a
o Financial mana6ement<
(han and "ain

S$%t=a+e used
Ms0%%ice @11B
? Micr$s$%t E/cel
? Micr$s$%t F$rd
? M S p$'er p$int
? Daint
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