“STOCK PRICE ANALYSIS OF DIFFERENT

SECTORS”
PROJECT REPORT
2009

Submitted for the partial fulfillment of the

requirement for the award

Of
MASTER OF BUSINESS ADMINISTRATION
SUBMITTED BY

AVDHESH KUMAR SHARMA

ROLL NO. 0823170010

UNDER THE SUPERVISION OF

External: Mr. Vishal Thakur(S.R.M.)

Internal: Mr. Kumar Siddhartha(Sr.Lecturer)

Department Of Management

R.D.ENGINEERING COLLEGE, DUHAI,

GHAZIABAD

1
 DECLARATION

I hereby declare that this project report prepared in lieu of a

compulsory paper for the partial fulfillment of Management of

Business Administration (Finance and Marketing) is my original work

which I have submitted in Gulf Bulls Securities Pvt. Ltd. to my guide

Ms Vishal Thakur. No part of it has been submitted to any other

university or organization.

All the information and data in my project are authentic to the best

of my knowledge and taken from reliable sources.

Avdhesh Kumar

Sharma

2
 Acknowledgement

Project work is never the work of an individual. It is more a

combination of views, ideas, suggestions, contribution and work

involving many individuals.

I wish to express my deepest gratitude to Gulf Bulls Securities’

management for giving me an opportunity to be a part of their

esteem organization and enhance my knowledge by granting

permission to do my summer training project under their guidance.

I am grateful to Ms. Vishal Thakur, my guide, for his invaluable

guidance and cooperation during the course of the project. He

provided me with his assistance and support whenever needed that

has been instrumental in completion of this project.

The project could not have completed without the guidance of Mr.

Vishal Thakur, Ms. Neha Goel, Ms. Anuja Shukla and last but not the

least Mr. Mandeep. Their continuous guidance helped me immensely

during the project work

3
 Avdhesh

Kumar Sharma

Preface

The stock market in India has been a kind of mysterious place for

many people who think that the persons investing their money in

the market are sort of gambling on their money. There is usual

misconception in the minds of the common man that because of the

volatility of the market, their hard earned money is not safe in the

stock market.

However, this fear can be checked by proper research on a share

someone is interested to invest on. The market doesn’t behave in

an arbitrate manner but certain trends are repeated over the time

again and again. It is quite responsive towards the economic

activities taking place in India as well as around the whole world.

The broad objective of the project is to understand the behavioral

pattern of the shares of IndiaBulls Financial Services Ltd. over the

past one year and a half so that one can understand the movement
4
of the share on a particular trading session as well as the

impact of news coming from different quarters of the market.

The project will provide a tool in the hands of the investors to take

the decisions regarding their investment in the shares of IBFSL that

is, when to buy or when to sell the shares. It will also give them the

answer that whether it is right time to invest in this share or not,

and what could be the best time to invest in this share. project deals

with the analysis of different companies of different sectors.

My project is divided into different chapters and they are given as

under:

TABLE OF CONTENTS

5
 EXECUTIVE SUMMARY

SR. PARTICULARS PAGE

NO. NO.

1 Executive Summary 6

2 Objective of Study 8

3 Research Methodology 10

4 Chapter 1 13-20

• Introduction of the company 14

Chapter 3 21-34
22
5 • Research An Introduction
23
 Technical Analysis
29
 Fundamental Analysis

Chapter 5 35-

• Analysis of Different Indian sectors and its leading companies 132

 IT 36
 Banking
38
 Real Estate
64
106
7 Chapter 6 133-
135
• Conclusion
134

8 • Annexure 136-
• Bibliography 150
151

6
The Indian economy remained on a high growth trajectory with

renewed vigor and greater participation from various sectors of the

economy. The dynamism is expected to gather further momentum

with policy initiatives, thrust on building infrastructure, emphasis on

rural and agricultural reforms that would further stimulate demand,

growth and employment.

It seems that corporate India’s growth is likely to remain robust,

given the massive capital expenditure plans of Indian companies. 14

key manufacturing sectors reported 26.5% increase in capital work-

in-progress on a y-o-y basis, thus indicating strong business outlook

and confidence.

I have introduced a new section in this year’s edition, viz., Insights.

Some major findings contained therein are as follows:

It is the PSU companies that rule the roost in terms of market

capitalization. The 54 PSU companies featured in the Top 500 list

command a high share of 25.2% in the total market capitalization of

the Top 500 Companies.

The report describes various aspects of the Stocks and focus on

the various opportunities and threats that have emerged as a

result of change in the regulatory environment. The objective of

the project is to find out the risk and return perspective of the

stocks of different sectors.

7
In doing so I have used various selection techniques. For the

purpose of selecting the company’s products we have used the

main selection analysis is Technical analysis and fundamental

analysis for ICICI Bank, Educomp Solutions and Unitech. The

intention behind such an analysis is that to analyze the competitive

advantage of the company by knowing the resistance and support

level for the company’s which is particularly helpful in identifying

areas of development. I have conducted a detailed study of various

real economy snapshots so as to consider the growth opportunities

of the economy as a whole.

Then I have done the fundamental analysis to predict the stocks

behavior in future moreover the technical analysis for stocks return

for the above mentioned stocks, the Also I have done the Financial

Strength Analysis of the company’s because to know how it is

efficient in financial way .

In this section I have done the full study of the ICICI, Educomp

Solutions and Unitech.

I have also done swot analysis for these three companies with

strengths, weakness, opportunity and threats of each of the

company’s. The swot analysis would also provide an overview to an

investor regarding the future certainty and uncertainty.

At last I have done an analysis of these stocks and had predicted

the stock prices for future and the support as well as resistance

8
level so that it can be taken up by the investors to decide the

time and date for their investment to have greater returns at their

OBJECTIVE OF THE STUDY

As per the requirement of course I have prepared this report.

• To track the share prices of the companies.

• To study the share price movements.

• To analyze the balance sheet and income statement in

order to know the position of the companies.

• To do the fundamental analysis of the companies taken for

comparison in order to know the financial position of the

companies.

• To do the technical analysis.

• To do the swot analysis.

In this study I had to present an introduction to the Indian economy

and study of different Indian sectors Data for companies were

collected and analyzed. A Comparison of stock market index and

stock prices of these companies was done and it was clarified how

9
much change is there with a change is Sensex. The study

includes a SWOT analysis of different companies, which points out

the strength, weakness, opportunity and threats, with a focus on the

Indian market.

Need of the study was to get an insight into the different sectors

and future market prospects. This study was required because when

it comes to business generation and growth in this highly

competitive world, each of such companies need to understand the

market they want to enter, the competitors, know the market

potential and future growth prospects. It becomes more complex

when it comes to

dealing with someone’s hard earned money. One needs to generate

trust and give better services as compared to their Competitors.

This study will be of importance for Gulf Bulls as they will come to

know about the different sector, how it functions, and trends in the

sector etc. Also it is very important to know the liquidity and returns

of the market one is planning to enter. So a research was done to

know the volumes they generate, the type of client they have, the

type projects they have, the type of segment they need to enter or

come out, the growth that they require for there order book so that

they sustain in this market scenario, their strategy to trade,

liquidity and investments made by them. This will provide an insight

to formulate business strategies for better growth.

10
 METHODOLOGY

An Introduction

Research in common parlance refers to a search for knowledge. One

can also define research as a scientific and systematic search for

pertinent information on a specific topic. Some people consider

research as a movement, a movement from the known to the

unknown. It is actually a voyage of discovery. We all possess the

vital instinct of inquisitiveness for things. When the unknown

confronts us, we wonder and our inquisitiveness make us probe and

11
attain full understanding of the unknown. This inquisitiveness

is the mother of all knowledge and the method, which a person

employs for obtaining this knowledge of whatever the unknown, can

be termed as research.

Research is an academic activity and as such the term should be

used in a technical sense. Research is an original contribution to the

existing stock of knowledge made for its advancement. It is the

pursuit of truth with the help of study, observation, comparison, and

experiment. In short, the search for knowledge through objective

and systematic method of finding solutions to a problem is research.

Significance of research

It is very important to understand the importance of research to

perform it better and also to appreciate a research work. So I

thought of stating the significance of research.

“All progress is born of inquiry. Doubt is better than overconfidence,

for it leads to inquiry and inquiry leads to invention” is a famous

Hudson Maxim in context of which the significance of research can

be well understood. Increased amount of research makes progress

possible. Research inculcates scientific and inductive thinking and it

promotes the development of logical habits of thinking and

organization.
12
The role of research in several fields of applied economics and

finance, whether related to business or to the economy as a whole,

has greatly increased in modern times. The increasingly complex

nature of business and government has focused attention on the

use of research in solving operational problems. Research, as an aid

to policy formation, has gained added importance, both from the

government and the business houses.

Research Methodology

The objective of this research project was to provide Gulf Bulls

Securities with analysis of different sectors with a detailed feasibility

report in respect to order growth and trend nationally and

internationally.

The section on parameters that affect the different sector required

secondary data collection and then use of valuation ratio for the

estimating the revenue which they can generate in future like steel

prices to sales ratio, cement prices to sales ratio along with

independent variables like inflation, interest rates etc.

One of the sections is to establish ratio analysis and order book

analysis, for which data relating to the companies traded at Sensex,

Nse etc was collected and spot and risk factor has been associated.

13
Price of raw material and sales trend were also established.

Beta factor of each company was studied.

Seasonal variations in order book for each of company was

calculated from the secondary data collected and analysis has been

done as to how much are the seasonality in each of these stocks

Last section of my research was to do valuation ratio as a common

factor indicating the future prospectus of the companies. In this

study, mainly two types of data collection techniques were used i.e.

with the help of research analyst and secondly with the help of

research report given by project guide at the company. In both the

methods, the analysis has been done for the sector. It was taken

care that I refrained from expressing my own opinion. All the data

collected was made in such a way that it acted as a structured

instrument.

Limitations

• The biggest problem that I faced during this research study

was that of data collection.

• Calculation of Valuation ratios was another problem

• In my research it was difficult to get persons at company to

give out information regarding their order of the project and

value of uncompleted project.

• Year ending period and my survey period were same, creating

a problem, as people were scared to give required data. They

said they would have to consult their C.A regarding it.

14
CHAPTER 1
COMPANY
PROFILE

15
 COMPANY’S PROFILE

About company

Gulf Bulls Securities Pvt. Ltd. is a company registered under the

Companies Act, 1956 .It is a professionally managed group headed

by the directors, having vast experience in the stock market.

The company is serving a diverse customer base of institutional and

retail investors The Company has a balanced mix of revenues from

emerging markets and is well positioned to leverage the growth

potential offered by these markets.

GBS provides investors a robust platform to trade in Equities in NSE

and BSE, and derivatives in NSE. The company has a worldwide

vision and it along with its associates is currently providing state of

the art stock broking services through all the major stock

exchanges, trading through NSE & BSE, depository services through

CDSL and all the services are available under the one roof. With its

ability to evolve with the changing environment the Company has

been able to put itself to the forefront of stock broking activities.

With its network spreading across various parts of India, it has made

a distinct mark among the stock broking houses and high net worth

corporate as well as individuals.

The company offers financial information, analysis, investment

guidance, news & views, which are designed to meet the

16
requirements of everyone from a beginner to a savvy and well-

informed trader.

“Our vision is to grow our business and make our presence across

the world.”

“Our mission is to create and introduce the new definition of

investments around the globe.”

Management Team:

Name Designation

Mr. Vivek Rana Chairman / Managing Director

Mr Rajiv Balhara Director

Mr. Kuldeep Sharma Director

Mr. Yajur Chaudhary Director

Mr. Rajneesh Aggarwal Director

Mr. Vipin Kumar Director

Mr. Gajraj Singh Director

Mr. Anil Kaushik Director

17
Prominent feature of Gulf Bulls Securities

• Strong research department located at Faridabad office.

• Well structured infrastructure for trading.

• Highly skilled and experience staff.

• Dedicated user friendly website for its customers, named

www.monepore.com and www.moneyporeexpress.com.

• Money pore express, software developed by Gulf Bulls

Securities provides retail investors better opportunity to

trade at home and that to at greater speed and

convenience.

Areas of Expertise

Gulf Bulls offers real time trading opportunities on the NSE. It also

offers depository and online services to clients for account

accessing and information through its online portal catering to the

needs of mobile trader as well as the net savvy investor. Gulf Bulls

offers state-of –the–art online trading through its website

(www.gulfbullsecurity.co.in). Regular updates during trading hours,

and access to information, analysis and research, and a range of

monitoring tools is available. The company has steadily building up

a comprehensive portfolio of products and services apart from

conventional broking. High speed anywhere trading through the net,

18
online depository services, commodities trading and retail debt

products are increasingly areas of special emphasis for the

company.

Research

Gulf Bulls is a research driven organization. Daily Call is its

morning newsletter that takes a trading call on the market and

gives a ringside view of the overnight national and international

events. Customers get real time feeds on news, comments and

recommendations through instant messaging that are of utmost

essence to the serious trader. The Weekly Watch delivered to all the

clients every Saturday evening is the most comprehensive reports

of its kind. The report summons developments over the past week,

major economic talking points, summary on derivatives markets,

technical outlook and trading ideas for the forthcoming week and

fundamental investments with an exhaustive research report for a

medium to long term horizon. On the commodities side, it releases

daily and weekly reports providing outlook on international agri-

commodities.

Mutual Funds

Gulf Bulls provides a host of services for customers investing in

mutual funds. It offers wide range of services like, rankings of

different mutual fund schemes, list of new schemes issued in the

19
market, interviews with fund managers, InstaNAV – a quick

search based application that enables customers to get the related

information about the desired scheme, Primer – a brief description

about mutual funds, RBI procedural guidelines and a Risk Profiler –

which helps the customers in ascertaining one’s own profile, thus

minimizing risk.

Advisory Services

Apart from broking business, Gulf Bulls is also engaged in offering

advisory services of investments into mutual funds, primary market,

life insurance and other small saving products. The distribution

services add up to their broking business and are serviced by

experts at each location. The business is supported by an efficient

research and back office team. Gulf Bulls’ set of diligent advisors

helps its customers plan and get more out of one’s money. The

schemes include, fixed income, bank fixed deposits, company fixed

deposits, small savings schemes, tax saving schemes and NRI

deposits. Gulf Bulls also provides tax planning services – where a list

of tax saving schemes and a forum for Q&A where the queries are

answered by the tax advisors; and an NRI advisory body, where it

provides information for NRIs in helping them makes judicious

investment decisions.

20
Loan Advisory

Gulf Bulls also provides advisory services on the loan schemes of

certain banks to its customers. The schemes include, home loans,

professional loans, educational loans, consumer loans and auto

loans. Its advisory services are classified into four categories

namely; Primers – giving an overview about all schemes that are

available, Calculators – where it helps the customers with quick

calculators, Jargon Buster – a translator and Digital Advisors – which

help in making decisions easy. It has entered into partnership with

many leading banks in providing this facility.

Performance

The Company registered strong growth during the first 10 months of

2007. The company added 26,460 domestic customer accounts in

2007 as compared to 25,295 in 2006. Number of terminals, sub

brokers and employees almost doubled during this period.

Growth Areas

Gulf Bulls has diversified its business to other areas such as portfolio

management services and is looking forward at opening overseas

branches. It plans to introduce company fixed deposits and

merchant banking to its current offerings. It is also aiming at

increasing their institutional client base, acquiring new

business/brokerage firms and also entering into joint venture

operations in the near future.

21
Membership

Cash Market: NSE

Products offered

Currently Gulf Bulls Securities and Stock broking is offering following

product bouquet to people who wish to deal in stock market

Online

Online trading account: Rs. 750

Online trading account

Online Software Money pore Express

Online package: Rs. 500 (+ Rs 5000 margin)

Demat

Online trading account/Online Software Money pore Express

SWOT Analysis

Strength

• Highly skilled and experienced staff.

• Excellent infrastructure

• Branches all over India

• Strong research department, headed by V K Sharma

• Various investment services under one roof

22
Weakness

• In adequate center within the city, vis-à-vis its major

competitors

• No mass marketing programme

Opportunity

• Growing investment in capital market from retail investors

• Development of online trading as the speed of communication

has increased

• Tapping young investors and making them their loyal client

• Initiate awareness about stock market and initiate classes for

people interested to trade but are anxious because of their

lack of knowledge.

Threat

• Bigger players like Reliance entering market

• Reducing brand loyalty among clients

• Security threat in online trading

23
 CHAPTER 3

RESEARCH AN

INTRODUCTION

24
 RESEARCH an Introduction

Research in common parlance refers to a search for knowledge. One

can also define research as a scientific and systematic search for

pertinent information on a specific topic. Some people consider

research as a movement, a movement from the known to the

unknown. It is actually a voyage of discovery. We all possess the

vital instinct of inquisitiveness for things. When the unknown

confronts us, we wonder and our inquisitiveness make us probe and

attain full understanding of the unknown. This inquisitiveness is the

mother of all knowledge and the method, which a person employs

for obtaining this knowledge of whatever the unknown, can be

termed as research.

Research is an academic activity and as such the term should be

used in a technical sense. Research is an original contribution to the

existing stock of knowledge made for its advancement. It is the

pursuit of truth with the help of study, observation, comparison, and

experiment. In short, the search for knowledge through objective

and systematic method of finding solutions to a problem is research.

Significance of research

It is very important to understand the importance of research to

perform it better and also to appreciate a research work. So I

thought of stating the significance of research. “All progress is born

of inquiry. Doubt is better than overconfidence, for it leads to

25
inquiry and inquiry leads to invention” is a famous Hudson

Maxim in context of which the significance of research can be well

understood. Increased amount of research makes progress possible.

Research inculcates scientific and inductive thinking and it promotes

the development of logical habits of thinking and organization. The

role of research in several fields of applied economics and finance,

whether related to business or to the economy as a whole, has

greatly increased in modern times. The increasingly complex nature

of business and government has focused attention on the use of

research in solving operational problems.

TECHNICAL ANALYSIS

Technical analysis is simply the study of prices as reflected on

price charts. Technical analysis assumes that current prices

should represent all known information about the markets.

Prices not only reflect intrinsic facts, they also represent human

emotion and the pervasive mass psychology and mood of the

moment. Prices are, in the end, a function of supply and demand.

However, on a moment to moment basis, human emotions…fear

greed, panic, hysteria, elation, etc. also dramatically effect

prices. Markets may move based upon people’s expectations, not

necessarily facts. A market "technician" attempts to disregard

the emotional component of trading by making his decisions

based upon chart formations, assuming that prices reflect both

26
facts and emotion. Analysts use their technical research to

decide whether the current market is a BULL MARKET or a BEAR

1. STOCK CHARTS

A stock chart is a simple two-axis (X-Y) plotted graph of price and

time. Each individual equity, market and index listed on a public

exchange has a chart that illustrates this movement of price over

time. Individual data plots for charts can be made using the

CLOSING price for each day. The plots are connected together in a

single line, creating the graph. Also, a combination of the

OPENING, CLOSING, HIGH and/or LOW prices for that market session

can be used for the data plots. This second type of data is called a

PRICE BAR. Individual price bars are then overlaid onto the graph,

creating a dense visual display of stock movement. Stock charts

can be drawn in two different ways. An ARITHMETIC chart has

equal vertical distances between each unit of price. A

LOGARITHMIC chart is a percentage growth chart.

2. TRENDS

The stock chart is used to identify the current trend. A trend reflects

the average rate of change in a stock's price over time. Trends exist

in all time frames and all markets. Trends can be classified in three

ways: UP, DOWN or RANGEBOUND. In an uptrend, a stock rallies

often with intermediate periods of consolidation or movement

against the trend. In doing so, it draws a series of higher highs

and higher lows on the stock chart. In an uptrend, there will

27
be a POSITIVE rate of price change over time. In a

downtrend, a stock declines often with intermediate periods of

consolidation or movement against the trend. In doing so, it draws

a series of lower highs and lower lows on the stock chart. In

a downtrend, there will be a NEGATIVE rate of price change

over time. Range bound price swings back and forth for long

periods between easily seen upper and lower limits. There is no

apparent direction to the price movement on the stock chart and

there will be LITTLE or NO rate of price change. Trends tend to

persist over time. A stock in an uptrend will continue to rise until

some change in value or a condition occurs. Declining stocks will

continue to fall until some change in value or conditions

occur. Chart readers try to locate TOPS and BOTTOMS, which

are those points where a rally or a decline ends. Taking a

position near a top or a bottom can be very profitable.

Trends can be measured using TRENDLINES. Very often a

straight line can be drawn UNDER three or more pullbacks from

rallies or OVER pullbacks from declines. When price bars then return

to that trend line, they tend to find SUPPORT or RESISTANCE

and bounce off the line in the opposite direction.

3. VOLUME

Volume measures the participation of the crowd. Stock

charts display volume through individual HISTOGRAMS

below the price pane. Often these will show green bars for up

28
days and red bars for down days. Investors and traders can

measure buying and selling interest by watching how many up

or down days in a row occur and how their volume compares

with days in which price moves in the opposite direction. Stocks

that are bought with greater interest than sold are said to be

under ACCUMULATION. Stocks that are sold with great interest

than bought are said to be under DISTRIBUTION. Accumulation

and distribution often LEAD price movement. In other words, stocks

under accumulation often will rise some time after the buying

begins. Alternatively, stocks under distribution will often fall some

time after selling begins. It takes volume for a stock to rise but it can

fall of its own weight. Rallies require the enthusiastic participation of

the crowd.

When a rally runs out of new participants, a stock can easily fall.

Investors and traders use indicators such as ON BALANCE

VOLUME to see whether participation is lagging (behind) or

leading (ahead) the price action. Stocks trade daily with an

average volume that determines their LIQUIDITY. Liquid stocks

are very easy for traders to buy and sell. Liquid stocks require

very high SPREADS (transaction costs) to buy or sell and often

cannot be eliminated quickly from a portfolio. Stock chart analysis

does not work well on illiquid stocks.

4. PATTERNS AND INDICATORS

29
How can one organize the endless stream of stock chart data

into a logical format? Charts allow investors and traders to

look at past and present price action in order to make reasonable

predictions and wise choices. It is a highly visual medium. This one

fact separates it from the colder world of value-based analysis.

The stock chart activates both left-brain and right-brain

functions of logic and creativity. So it's no surprise that over

the last century two forms of analysis have developed that

focus along these lines of critical examination.

The oldest form of interpreting charts is PATTERN ANALYSIS.

This method gained popularity through both the writings of

Charles Dow and Technical Analysis of Stock Trends, a classic

book written on the subject just after World War II. The newer

form of interpretation is INDICATOR ANALYSIS, a math-oriented

examination in which the basic elements of price and volume are

run through a series of calculations in order to predict where price

will go next. Pattern analysis gains its power from the tendency of

charts to repeat the same bar formations over and over again.

These patterns have been categorized over the years as having a

bullish or bearish bias. Some well-known ones include

HEAD and SHOULDERS, TRIANGLES, RECTANGLES, DOUBLE TOPS,

DOUBLE BOTTOMS and FLAGS. Also, chart landscape features such

as GAPS and TRENDLINES are said to have great significance on the

future course of price action. Indicator analysis uses math

30
calculations to measure the relationship of current price

to past price action. Almost all indicators can be categorized as

TREND-FOLLOWING or OSCILLATORS. Popular trend-following

indicators include MOVING AVERAGES, ON BALANCE VOLUME and

MACD. Common oscillators include STOCHASTICS, RSI and

RATE OF CHANGE. Trend-following indicators react much more

slowly than oscillators.

They look deeply into the rear view mirror to locate the future.

Oscillators react very quickly to short-term changes in price,

flipping back and forth between OVERBOUGHT and OVERSOLD

levels.

Both patterns and indicators measure market psychology. The

core of investors and traders that make up the market each day

tend to act with a herd mentality as price rises and falls. This

"crowd" tends to develop known characteristics that repeat

themselves over and over again. Chart interpretation using these

two important analysis tools uncovers growing stress within the

crowd that should eventually translate into price change.

5. SUPPORT AND RESISTANCE

The concept of SUPPORT AND RESISTANCE is essential to

understanding and interpreting stock charts. Just as a ball

bounces when it hits the floor or drops after being thrown to

the ceiling, support and resistance defines natural boundaries for

rising and falling prices. Buyers and sellers are constantly in battle
31
mode. Support defines that level where buyers are strong

enough to keep price from falling further. Resistance defines that

level where sellers are too strong to allow price to rise further.

Support and resistance play different roles in uptrend’s and

downtrends. In an uptrend, support is where a pullback from a rally

should end. In a downtrend, resistance is where a pullback from a

decline should end. Support and resistance are created because

price has memory. Those prices where significant buyers or sellers

entered the market in the past will tend to generate a similar

mix of participants when price again returns to that level. When

price pushes above resistance, it becomes a new support level.

When price falls below support, that level becomes resistance. When

a level of support or resistance is penetrated, price tends to thrust

forward sharply as the crowd notices the BREAKOUT and jumps in

to buy or sell. When a level is penetrated but does not attract

a crowd of buyers or sellers, it often falls back below the old

support or resistance. This failure is known as a FALSE

BREAKOUT. Support and resistance come in all varieties and

strengths.

They most often manifest as horizontal price levels. But trend lines

at various angles represent support and resistance as well. The

length of time that a support or resistance level exists

determines the strength or weakness of that level. The strength or

weakness determines how much buying or selling interest will

be required to break the level. Also, the greater volume traded at

32
any level, the stronger that level will be. Support and

resistance exist in all time frames and all markets.

Levels in longer tie frames are stronger than those in shorter time

frames. The ideas of Charles Dow, the first editor of the Wall Street

Journal, form the basis of technical analysis today. The behavior

patterns that he observed apply to markets throughout the world.

FUNDAMENTAL ANALYSIS

Fundamental analysis is the process of looking at a business at the

basic or fundamental financial level. This type of analysis examines

key ratios of a business to determine its financial health and gives

you an idea of the value its stock.

Many investors use fundamental analysis alone or in combination

with other tools to evaluate stocks for investment purposes. The

goal is to determine the current worth and, more importantly, how

the market values the stock.

Earnings

It’s all about earnings. When you come to the bottom line, that’s

what investors want to know. How much money is the company

making and how much is it going to make in the future.

33
Earnings are profits. It may be complicated to calculate, but

that’s what buying a company is about. Increasing earnings

generally leads to a higher stock price and, in some cases, a regular

When earnings fall short, the market may hammer the stock. Every

quarter, companies report earnings. Analysts follow major

companies closely and if they fall short of projected earnings, sound

the alarm. For more information on earnings, see my article: It’s the

Earnings.

While earnings are important, by themselves they don’t tell you

anything about how the market values the stock. To begin building a

picture of how the stock is valued you need to use some

fundamental analysis tools. These ratios are easy to calculate, but

you can find most of them already done on sites

like cnn.money.com or MSN MoneyCentral.com.

These are the most popular tools of fundamental analysis. They

focus on earnings, growth, and value in the market. The tools are

given bellows:-

1. Earnings per Share – EPS

2. Price to Earnings Ratio – P/E

3. Projected Earning Growth – PEG

4. Price to Sales – P/S

5. Price to Book – P/B

6. Dividend Payout Ratio

34
 7. Dividend Yield

8. Book Value

9. Return on Equity

No single number from this list is a magic bullet that will give you a

buy or sell recommendation by itself, however as you begin

developing a picture of what you want in a stock, these numbers will

become benchmarks to measure the worth of potential

investments.

Ratio analysis

Ratio analysis is a powerful tool of financial analysis. a ratio is

defined as the “indicated quotient of two mathematical expressions”

and as” the relationship between two or more things.” in financial

analysis, a ratio is used as a benchmark for evaluating the financial

position and performance of a firm. The absolute accounting figures

reported in the financial statements do not provide a meaningful

understanding of the performance to some other relevant

information. For example, Rs5 corer net profits may look impressive,

but the firm s performance can be said to be good or bad only when

the net profit figure is related to the firm s investment. The

relationship between the two accounting figures, expressed

35
mathematically, is known as financial ratio. Ratio helps to

summarize the large quantities of financial performance.

Uses of ratio analysis:

• We can determine the ability of the firm to meet its current

obligations

• We determine the overall operating efficiency and

performances of the firm

• Useless in analysis of financial statements

• Useless in locating the week spots of the business

• Useless in comparison of performance

• The extent to which the firm has used its long –term solvency

by borrowing

• The efficiency with which the firm is utilizing its assets in

generating sales

• Useful in simplifying accounting figures

• Useful In forecasting purpose

• Weakness in financial structure on account of incorrect

policies in the present are revealed through accounting ratios

• The comparisons can be made on the basis of ratios

Limitations of accounting ratios:

• Ratios may be worked out for insignificant and unrelated

figures

• Price level changes affect ratio analysis

36
 • Difficult to forecast future on the basis of the past facts

• Give false result if the ratios are based on incorrect

accounting

• Ignore qualitative policies

• No single standard ratio for comparison

• Limited utility if based on single set of figures.

Financial ratios provide the basic for answering some important

questions concerning financial (well being) of the firm.

How liquid is the firm? Liquidity refers to the firms’ ability to

meet maturing obligating and to convert assets into cash. This

factor is very important to the firms’ creditors.

Is management generating sufficient profits from the firm’s

assets? Primary purpose for purchasing an asset is to produce

profits, the analysts often seek an indication of the adequacy of the

profits being realized if the level of profits appears insufficient in

relation to the investment, an investigation into the reasons for the

inferior returns is in order.

How does the firms’ management finance its investment?

These decisions have a direct impact upon the returns provided to

the common stockholders.

Are the stockholders receiving sufficient return on their

investment? The objective of financial manager is to maximize the

value of the firm’s common stock, and level of returns being

37
received by the inventors relative to their investment is a key

factor in determining the value.

STANDARDS OF COMPARISON

The ratio analysis involves comparison for a useful interpretation of

the financial statements. Standards of comparison may consist of:

• PAST RATIOS: i.e. ratios calculated from the past

financial statements of the same firm:

• PROJECTED RATIOS: i.e. ratios developed using the

projected, or pro forma, financial statements of the

same firm;

• COMPETITORS’ RATIO: i.e. ratios of some selected

firms, especially most progressive and successful

competitor, at the same point in time, and

• INDUSTRY RATIOS: i.e. ratios of the industries to

which the firms belongs

CLASSIFICATION OF RATIOS

Ratios can be classified from various points of view .In reality; the

classification depends on the objectives and available data. Ratio

38
may be based on figures in the balance sheet .in the profit &

loss account in both Thus they may be worked out on the basis of

figures contained in the financial statements.

In the view of the requirement of the various users (e.g. short term

creditors, long term creditors, management, investors etc….) of the

ratio may classify the ratio as follows-

1. INCOME STATEMENT RATIOS:-

These ratios are calculated on the basis of the terms of income

statement only e.g. gross profit ratio, stock turnover rationed

2. POSITION STATEMENT RATIOS:-

These ratios are calculated on the basis of the figures of the figures

of position statement only e.g. current ratio, debt equity ratio etc.

3. INTER STATEMENT RATIO OR COMPOSITE RATIO:-

These ratios are based on the figures of income statement as well

as position statement e.g. fixed assets turnover ratios net profit to

capital employed etc

39
 CHAPTER 5

ANALYSIS OF

DIFFERENT INDIAN

SECTORS & ITS

LEADING

COMPANIES
40
 INDIAN INFORMATION TECHNOLOGY SECTOR

Information technology, and the hardware and software associated

with the IT industry, are an integral part of nearly every major global

industry.

The information technology (IT) industry has become of the most

robust industries in the world. IT, more than any other industry or

economic facet, has an increased productivity, particularly in the

developed world, and therefore is a key driver of global economic

growth. Economies of scale and insatiable demand from both

consumers and enterprises characterize this rapidly growing sector.

The Information Technology Association of America (ITAA) explains

the “information technology” as encompassing all possible aspects

of information systems based on computers.

Both software development and the hardware involved in the IT

industry include everything from computer systems, to the design,

implementation, study and development of IT and management

systems.

41
Owing to its easy accessibility and the wide range of IT

products available, the demand for IT services has increased

substantially over the years. The IT sector has emerged as a major

global source of both growth and employment.

Features of the IT Industry at a Glance

• Economies of scale for the information technology industry are high. The

marginal cost of each unit of additional software or hardware is insignificant

compared to the value addition that results from it.

• Unlike other common industries, the IT industry is knowledge-based.

• Efficient utilization of skilled labor forces in the IT sector can help an

economy achieve a rapid pace of economic growth.

• The IT industry helps many other sectors in the growth process of the

economy including the services and manufacturing sectors.

The role of the IT Industry

The IT industry can serve as a medium of e-governance, as it

assures easy accessibility to information. The use of information

technology in the service sector improves operational efficiency and

adds to transparency. It also serves as a medium of skill formation.

MAJOR STEPS TAKEN FOR PROMTION OF IT INDUSTRY

Domain of the IT Industry

A wide variety of services come under the domain of the information

technology industry. Some of these services are as follows:

• Systems architecture

42
 • Database design and development

• Networking

• Application development

• Testing

• Documentation

• Maintenance and hosting

• Operational support

• Security services

EDUCOMP SOLUTIONS

Company description

Educomp Solutions Ltd, formerly Educomp Datamatics Limited,

was incorporated in 994 and is based in New Delhi, India. It is

India's largest market-listed educational service provider mainly

focused on the K-12 space.

Educomp group serves over 19,000 schools and 9.4 million

learners and educators across the world. Company operates

private schools across various cities and also partners with

various state governments.

It has 27 offices worldwide. In addition, the Company operates

through its various subsidiaries including authorGEN, Threebrix

eServices, Learning.com, USA, AsknLearn Pte Ltd, Singapore and

via its associates such as Savvica in Canada.

43
The company has three primary business segments :-

1. Licensing of tools that help existing education system to

Move to a higher standard of delivery.

2. Direct Intervention - running schools, pre-schools and

tutoring classes, onlinedelivery etc.

1. Post K-12 initiatives such as vocational and professional

education.

Educomp's main business is developing and licensing digital

lessons, which are uploaded onto servers and provided to

schools. It also trains teachers (75,000 in the last quarter),

provides vocational training to students with courses such as

accounting and marketing, and offers online and in-person

tutoring. It runs eight K-12 schools. It has joined up in

January with New Delhi real estate developer Ansal

Properties & Infrastructure to start 25 private schools in

new townships. It aims to start 150 schools over the next three

years.

Educomp's big money-maker is Smartclass, a range of

44
interactive digital lessons with animation and graphics that's

marketed mainly to private schools as they have deeper pockets

than public schools. The multimedia lessons-- 16,000 so far--

are based on the different curricula in place across the

country and use 12 of the country's Languages.

Key Developments during 1HFY2009

• Smart Class: Company has covered 27 cities with total plan

of 80 cities. EBIT margins for this business more than 50%.

• Margins for ICT improved to 35% from 27%

earlier, however such margins are

unsustainable in the long run, and are likely to settle around

20%.

• Educomp achieved growth rate of 700% on its education

portal Mathguru.com on paying customers.

• Margins for retail business improved from 41% to 71%

• Received financial closure for Rs 725cr of debt for its K-12

business.

• Debtor days for company have come down from 179

days to 145 days.

Important Agreements Made by the Educomp Solution

Pvt.Ltd.

45
 • The first seven “Millennium Schools” (as defined below)

are launched, with Edu Manage (as defined below) acting as

vendor of the Company’s products and services.

• The Company, via Edu Infra (as defined below) enters

collaborative agreements to ensure sufficient land is available

for development of new schools in accordance with its K-12

initiative.

• Edumatics signs a joint development agreement with U.S.

based company, Learning.com, to provide educators with

innovative, web-delivered curriculum solutions that support

student learning.

• The Company enters into a partnership with Microsoft to make

its multimedia content curriculum available for use on the

Xbox 360 platform, which

• currently has over 50,000 users worldwide. The official launch

of the product is expected during FY 2009.

• Edumatics enters into a strategic alliance and joint

development agreement with Siboney Learning Group, Inc. to

create a new online test preparation programme, leveraging

IP, a software development programme, manpower and the

expertise of both parties.

• In May, the Company acquires a 51% strategic stake (on a

fully diluted basis) in Learning.com.

COMPANY MANAGEMENT
46
 Shantanu Prakash Chairman & Managing

Jagdish Prakash Whole-Time Director

Director
Gomal Jain Director

Sankalp Srivastava Director

Shonu Chandra Director

Sankalp Srivastava AUDIT COMMITTEE

Chairman, Independent & Non-

Executive

Subsidiaries of the company

Name of Company Ownership Interest

Edumatics Inc. -U.S.A. 1655 100%

Educomp Learning Private Limited –India 51%

Educomp Professional Private Limited – 100%

India

Sikhya Solutions LLC-U.S.A. 100%

Learning.com, U.S.A. 51%

The Company has seventeen subsidiaries, one associate and two

planned joint ventures. The subsidiaries focus mainly on providing

services and products directly to the individual consumer as part of

the Company’s Direct initiatives. In Fiscal 2008, Direct Initiatives

contributes 14.09% of the total consolidated revenues of Educomp.

47
SHARE DATA

Market Cap Rs.3647.25 Crs

Price Rs.1898.00

BSE Sensex 9459.34

BSE Code 532696

NSE Code INE216H01019

Face Value Rs.10

52-Week High/Low Rs.4219/1331

Index BSE 100 ,BSE Mid Cap

Group A

Listed on BSE/NSE 13th January 2006

Shareholding pattern(%)

Promoters 55.03%
FII's 6.97%
Public and Others 38.00%

MONTHLY HIGH AND LOW VALUE OF SHARE PRICE OF

EDUCOMP SOLUTION PVT.LTD

MONTH HIGH LOW

48
 PRICE DATE PRICE

DATE

MARCH 4,309.00 3-Mar-08 2,901.00 10-Mar-08

2008

APRIL 2008 4,219.00* 28-April-08 3,380.00 3-April-08

MAY 2008 4,185.00 23-May-08 3,651.00 12-May-08

JUNE 2008 4,065.00 2-June-08 2,569.00 30-June-08

JULY 2008 3,589.00 24-Jul-08 2,320.00 1-Jul-08

AUG 2008 3,841.00 29-Aug-08 3,099.00 1-Aug-08

SEPT 2008 4,020.00 1-Sep-08 2,985.00 18-Sep-08

OCT 2008 3,449.00 1-Oct-08 1,515.00 27-Oct-08

NOV 2008 2,825.00 5-Nov-08 1,627.00 20-Nov-08

DEC 2008 2,865.00 22-Dec-08 1,982.15 2-Dec-08

JAN 2009 2,722.00 7-Jan-09 1,375.00 21-Jan-09

FEB 2009 2,177.00 19-Feb-09 1,331.00** 6-Feb-09

MARCH 2,039.90 17-Mar-09 1,473.60 6-Mar-09

2009

*Note: It was also company 52-weeks high as on 20-march-

09

** It was also company 52-weeks low as on 20-march-09

➢ As the high/low for every month is specified here, we can

determine the difference which is highest in percentage for

the particular month.

49
 ➢ In the month of October 2008, we can see the kind of volatility

present in share price of Educomp as it is having the

difference of 48.85% within high and low in the equity report

for the month.

MONTHWISE HIGHEST DIFFERENCE BETWEEN INTRADAY

HIGH AND LOW PRICE OF EDUCOMP SOLUTION PVT.LTD

MONTH DATE HIGH LOW DIFFERENCE

MARCH 10-Mar-08 3,504.00 2,901.00 603.00

2008

APRIL 2008 2-Apr-08 3,950.00 3,530.00 420.00

MAY 2008 13-May-08 4,009.00 3,730.00 279.00

JUNE 2008 24-Jun-08 3,310.00 2,931.00 379.00

JULY 2008 23-Jul-08 3,579.90 3,102.00 477.90

AUG 2008 12-Aug-08 3,619.70 3,292.20 327.50

SEPT 2008 19-Sep-08 3,880.00 3,371.00 509.00

50
 OCT 2008 29-Oct-08 2,400.10 1,830.00

NOV 2008 19-Nov-08 2,406.90 1,875.00 570.10

531.90

DEC 2008 18-Dec-08 2,674.00 2,305.25 368.75

JAN 2009 21-Jan-09 1,932.00 1,375.00 557.00

FEB 2009 10-Feb-09 1,968.00 1,595.00 373.00

MARCH 13-Mar-09 1,793.00 1,585.15 207.85

2009

Margin

Average Difference between the day High and day Low in the last

one year for Educomp Solution is at Rs.230 and for last three month

is Rs.120 .If on an average we take 10-12% of this as a risk free

return then it comes out anywhere between Rs. 14-16 which is

margin at 0% risk.

TECHNICAL ANALYSIS FOR THE MONTH OF JANUARY,

FEBRUARY, AND MARCH 2009

51
 Resistance

Support
Level

January 2009
3,000.00

2,500.00

2,000.00

1,500.00 High
Low
1,000.00
Close
500.00

0.00
9

09

09

09

09

09

09

09

09

09

09

09

09

09
00
00

20

20

20

20

20

20

20

20

20

20

20

20

20
-2

-2

1-

1-

1-

1-

1-

1-

1-

1-

1-

1-

1-
1-

1-
1
1
-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0
04

06

12

14

22

24

30
02

08

10

16

18

20

26

28

The stock has seen a downtrend for past few months, we have

taken Share High, Low and closing price into consideration in order

to determine the difference between Day high and day low which is

significantly.

During January the Support level was 1750, and the Resistance level

was 2105, and each time it has broken the resistance or support we

have reported a move of 30-40 point downside or upside.

52
 F e b ru a ry 200 9
2,500.00

2,000.00

1,500.00
Hig h
1,000.00 L ow
Clo se
500.00

0.00
9

09

09

09

09

09

09

09

09

09

09

09
00

00

20

20

20

20

20

20

20

20

20

20
20
-2

-2

2-

2-

2-

2-

2-

2-

2-

2-

2-

2-

2-
02

02

-0
-0

-0

-0

-0

-0

-0

-0

-0

-0

-0
-

10

12

14

26
02

04

06

08

16

18

20

22

24
For the month of February, the stock declined due to some of the

rumours about the company accounting fudging case, but was

resolved very well by the Management . It has been able to break

the previous month support level.

So it has attained new its 52 week low price level. Support level was

1500 points and the Resistance level was 2050 points. Even the

market sentiments were not going with the stock.

53
 March 2009
2,500.00

2,000.00
Resistance
1,500.00
High
1,000.00 Low
Close
500.00

0.00
09

09
09

09

09

09

09

09

09

09
20

20

20

20

20

20

20

20

20

20
3-

3-
3-

3-

3-

3-

3-

3-

3-

3-
-0

-0

-0

-0

-0

-0

-0

-0

-0

-0
02

04

06

08

10

12

14

16

18

20
March month remained positive for the market as a result this script

continues to achieve new high in this time frame. The gap between

Low and High was significantly low and closing price was closer to

the highest price on all the trading day. Support level was 1680

points and resistant level was 1900 points.

Looking at this data we have come to the conclusion that Educomp

Solution followed market trend and investors were optimistic and

Profit booking was reasonably low.

JANUARY EQUITY CHARTING

54
 W
eeklyChart5Jan-9Jan
3,000.00

2,5
00.00

2,000.00

1
,5
00.00

1
,000.00

5
00.00

0.00
1
/5/2009 1
/6/2009 1
/7
D/2
a0
t0
e9 1
/8/2009 1
/9/2009

• HIGH 2643 5-JAN-2009

• LOW 2127 9-JAN-2009

• fall of Rs.516 within a week

• Analyst recommendation: To be away from the stock price as it

has been hit hardly during the first week of January.

• Resistance Level: Rs.2650

• Support Level: Rs.2100

Share Price (Rs.)

WeeklyChart12Jan-16Jan
2,100.00
2,050.00
2,000.00
1,950.00
1,900.00
9

1,850.00
0

0
0
0

0
/2

/2

/2

/2

/2
2

6
/1

/1

/1

/1

/1

D
ate
1

• HIGH 2088 15 -JAN-2009

55
 • LOW 1535 16-JAN-2009

• Fall of Rs.553 within a week

• Analyst recommendation: Accounts fudging allegation has made

the share price to move in the negative way.

• Resistance Level: Rs.2050

• Support Level: Rs.1500

Share Price (Rs.)

W
eeklyC
hart1
9Ja
n -2
3Ja
n
2
,50
0.0
0
2
,00
0.0
0
1
,50
0.0
0
1
,00
0.0
0
5
00.0
0
9

9
0

0
.00 0
0

0
2
2

2
/

/
1
9

3
/1

/2

/2

/2

/2

D
ate
1

• HIGH 1796 29-JAN-2009

• LOW 1720 17-JAN-2009

• Fall of Rs.76 within a week

• Analyst recommendation: Change occurred but minimal change

because of the downside happened in the third week.

• Resistance Level: Rs.1800

• Support Level: Rs.1650

56
Share Price (Rs.)
W
eeklyChart27Jan-30Jan
1,820.00
1,800.00
1,780.00
1,760.00
1,740.00
1,720.00
1,700.00

9
0

0
1,680.00 0

0
0

0
2

2
/

/
7

0
8

/3
/2

/2

/2
D
Eate
1

1
• HIGH 1825 27-JAN-2009

• LOW 1652.55 27-JAN-2009

• Rise of Rs.53 Within a week

FEBRUARY EQUITY CHARTING

SHRE PRICE

R
ESE
ARCHR
EPOR
T

2,000.00
1,500.00
1,000.00 Series1
50 0.00
9

0.0
0
0

0
0
0

0
/2

/2

/2
/2

/2
/2

/3

/4

/6
/5
2

D
ATE

• HIGH 1695 2-FEB-2009

• LOW 1394 5-FEB-2009

• fall of Rs.304 within a week

• Analyst recommendation: Allegation from ministry has

pressurized and had hit hardly during the first week of February.

• Resistance Level: Rs.1550

57
• Support Level: Rs.1400
SHARE PRICE
R
ESE
A R
C HR
EPOR
T

2,500.00
2,000.00
1,500.00 Series1
1,000.00
500.00

9
9

9
9

0
0.00

0
0

0
0

/2

/2

2
/2

/
0

3
/9

/1

/1

/1

/1
2

2
D
A TE

• HIGH 2097 13-FEB-2009

• LOW 1597 09-FEB-2009

• Fall of Rs.600 within a week

• Analyst recommendation: FII taking in the position of share price

for the time period of the second week.

• There has been gradual increase in the the share price of the

stock of educomp solution.

• Resistance Level: Rs.2100

• Support Level: Rs.1900

SHARE PRICE

R
ESE
ARCHR
EPOR
T

2,200.00
2,100.00
2,000.00
1,900.00 S
eries1
1,800.00
1,700.00
9

1,600.00
0

1,500.00
0

0
0

0
2

2
/2

/2

/2
/

/
7

0
6

/1

/1

/2
/1

/1
2

D
ATE

• HIGH 2177.50 19-FEB-2009

• LOW 1711.10 20-FEB-2009

58
 • Fall of Rs.400 within a week

• Resistance Level: Rs.2100

• Support Level: Rs.1700

SHARE PRICE

R
ESE
A R
C HR
EPOR
T

1,650.00
1,600.00
1,550.00 Series1
9

9
1,500.00
0

0
0

0
/2

/2

/2

/2
4

7
/2

/2

/2

/2
2

D
A TE

• HIGH 1725.00 24-FEB-2009

• LOW 1480.00 26-FEB-2009

• Fall of Rs.120 within a week

• Resistance Level: Rs.1630

• Support Level: Rs.1550

MARCH EQUITY CHARTING

SHARE PRICE

R
ESE
A R
CHR
EPOR
T

1,650.00
1,600.00
1,550.00 Series1
1,500.00
9

1,450.00
0

0
0

0
0

0
/2

/2
/2

/2

/2
/2

/3

/5

/6
/4
3

D
ATE

59
• HIGH 1605 2-MAR-2009

• LOW 1530 3-MAR-2009

• Fall of Rs.75 within a week

• Resistance Level:Rs.1600

• Support Level: Rs.1550

SHARE PRICE

R
ESE
A R
C HR
EPOR
T

1,800.00
1,700.00
1,600.00 Series1
1,500.00
9

9
1,400.00
9

1,300.00
0

0
0

0
0

0
0

/2

/2

/2

/2
/2

3
/9

/1

/1

/1

/1
3

D
A TE

• HIGH 1762 13-MAR-2009

• LOW 1513 09-MAR-2009

• Rise of Rs.249 within a week

• Resistance Level: Rs.1750

• Support Level: Rs.1500

SHARE PRICE

R
ESE
ARCHR
EPOR
T

2,000.0
0
1,950.0
0
S
eries1
1,900.0
0
9

9
0

1,850.0
0
0

0
0

0
2

/2

2
/

/
7

0
6
/1

/1

/1

/1

/2
3

D
ATE

60
 • HIGH 2039.90 17-MAR-2009

• LOW 1826.00 20-MAR-2009

• Rise of Rs.200 within a week

• Resistance Level:Rs.2000

• Support Level: Rs.1900

ResearchReport

2,250.00
2,200.00
2,1
50.00
2,1
00.00
Series
1
2,050.00
2,000.00
1
,950.00
1
,900.00
3/23/2009 3/24/2009 3/25/200
9 3/26/2009 3/27/2009

Date

• HIGH 2255.00 27-MAR-2009

• LOW 1940 13-MAR-2009

• Rise of Rs.250 within a week

• Resistance Level: Rs.2300

• Support Level: Rs.2050

Financials

Good 2QFY09 results: %age share of revenue among

various segments has changed significantly.

61
2nd quarter saw huge increase in contribution from

SmartClass and Retail line of business, going forward

SmartClass, will continue to remain main driver for growth for

next three financial years.

RATIO ANALYSIS:

Profitability Ratios Mar-08 Mar-07 Mar-06

Operating Profit 48.2 48.12 50.58

62
margin

Gross profit Margin 35.87 39.31 40.44

Net Profit Margin 25.51 25.54 25.89

Turnover Ratios

Inventory Turnover 185.88 32.75 30.1

Ratio

Debtor Turnover 2.29 2.16 2.08

Ratio

Fixed Asset Turnover 1.27 1.67 2.76

Ratio

Solvency Ratio

Current Ratio 5.41 4.5 5.33

Debt Equity Ratio 1.28 1.09 0.11

Interest Covering 21.69 25.81 37.13

Ratio

Valuation Ratio

P/E adjusted 35 110 na

P/BV 18 24 31

VALUATION RATIOS AS ON 31ST MARCH 2009

EPS 47.87

RETURN ON AVERAGE EQUITY 24.43%

DIVIDEND PAYOUT RATIO 25% (02-06-2008)

63
P/E RATIO 50.32 (23-03-2009)

PEG RATIO 2.625

Analysis of Ratios:-

Company’s Debt Equity Ratio has increased significantly from

0.11 in 2006 to 1.27 in 2008. Company has already made

financial closure of secured debt for capital expenditure

requirement for K-12 business up to the year 2011. Company’

Interest coverage ratio remains comfortable as most of the debt of

the company is in the form of FCCB maturing in 2012. Company

had high inventory turnover ratio as company has built up

inventory of installing computers for its SmartClass and ICT

business.

Future Outlook

• Company is poised to continue perform exceeding

well with more than 70% revenue growth for period

FY09-FY11 and margins staying above 45%.

• Net Profits are expected to rise 5 fold from Rs.700

million in 2008 to 3566 million in FY11giving a CAGR of

64
 70%.

• Company’s P/E to growth ratio is highly discounted for

FY10 and FY11, as company is expected to continue its

growth trajectory of 30% for several more years.

Growth Outlook

Company is likely to post very high growth rate for a long time.

Revenue figures are expected to show a CAGR of 70% for the period

2009-2011, 35% for the period 2011-2014 and 20% for the period

2014-2016. We forecast strong 65% CAGR in Net Profits over FY09-

FY11E and see limited risks to estimates given. EBIT margins are
65
likely to improve as revenue share of high margin retail and

online business is likely to improve considerably. We expect ROE to

double and settle in the range between 30-35%.

Company has forward P/E of 7.5 for FY-2011 on constant prices

while growth rate is expected to be upwards of 30% for year FY11-

FY14. Company will continue to shine even in downturn as

spending on Education and price levels are highly resilient to

economic downturns. Another positive for this company is its short

payback period on its investment as significant business comes

from long term contracts of 5 years. Company understands its

strengths and challenges ahead to deal with these challenges.

Company has recognized four areas of opportunities/ strengths as

under:

1. Large market opportunity(scale)

2. Create barriers of entry for other players through strong

IP and

product differentiation.

3. High operating margins (50%+)

4. Experience and ability to execute

66
Risks:

• Due to high margins and nature of business, company might

face competition from new entrants.

• Company is in high growth phase; PEG (P/E to Growth)

ratio will be an important consideration for the stock. Any

disappointment

on Earnings Growth numbers will see a downward price

movement.

• Free cash flows to remain negative for a while; if credit

market tightens or company fails to deliver on

expectation, raising fresh

funds will be a problem.

• If government reduces spending on education, earnings and

growth potential are likely to taper down.

• Company faces huge execution risks in its Edu-Infra

business. Also company has been very aggressive in its

growth plans, both

Organic and Inorganic, and it would be very difficult to

manage such growth plans under unforeseen

circumstances (E.g.-Key

Man Risk, Death of MD/Promoter).

SUPPORT AND RESISTANCE LEVEL FOR JUNE MONTH

67
 Market is at the resistant level (SENSEX 10,300 points as

on 15th May, 2009) and this share price is highly correlated with

market so for next 1 month Educomp share price is expected to

achieve a new support level of 2670 points but looking at the

international market we can say that international investors are bit

optimistic so market can sustain at this high for some more time.

News from India

Reserve Bank of India is expected to relax further Repo Rate and

CRR, which can keep market interest for some more time. Inflation

is all time Low (As on 14th May 2009) etc. Further stimulus

announced made by the govt. of India can uplift the market to

15000, but 4th quarters result and annual result would be the major

focus for the investor and it would also decide the direction of the

market in the upcoming months.

“Looking at the above given information we can project the

new Support Level at 2770* points and Resistance Level at

3540* points for the Second and third week of May”.

SUPPORT AND RESISTANCE LEVEL FOR THE COMING MONTHS

OF 2009

Beginning of June news could be favorable but will the same

Support and Resistance Level maintain for the rest of the weeks; our

68
team have done research on it and made the conclusion that it

will not be maintaining the same levels.

REASONS:

1- Market fall is expected because it cannot sustain at this level

for longer time (Market as on 2nd April, 2009).

2- Company 35-40% Revenue of total revenue comes in this

quarter alone.

3- 4th Quarter Results are expected in the month of April and it

may be good news for the investors, particular for education

sector.

4- General Election is not far away and market will take some

rest during this time frame.

“Looking at the above given information I projected that the

new Support Level for the Month of June will be 2700* points

and Resistance level will be 3500* points”.

Why Buy: Valuations at 22x FY09E, 12.25x FY2010E and 8.5x

FY2011E, on the lower side look cheap. More over company is

expected to post CAGR of 50%+ in revenues for next four years.

EBITDA margins for 2QFY09 excluding extraordinary forex losses

were around 60%. Earnings have been forecasted keeping EBITDA

69
on the lower side at 45-50%.Higher EBITDA will lead to further

revision in Earnings Estimate. Continue recessionary conditions will

make this stock more attractive relatively as Education segment

remains recession proof.

Downside Risks:

1. Short Term Market sentiments (High beta of 1.4)

2. Lower Earnings than market expectations

3. Execution/Regulatory/Key Man Risks

4. Tight credit conditions will pose difficulty for

company to raise more cash at cheaper interest

rates.

SWOT ANALYSIS OF EDUCOMP

Strengths:

• Global R&D facility.

• Retention of the man-power is the best in the industry.

• Impressive list of clientele.

• Relatively lower receivable compared to the industry average.

Weaknesses:

• Low operating margin of the other group companies.

70
 • Free floating stock is very less.

Opportunities:

• In the branded product category.

• In the consultancy area.

• In the emerging technology areas like Blue Tooth, WAP etc.

Threats:

• Increasing cost of human capital.

• Slowdown in the US economy.

• Appreciation of Indian Currency

• Will face fierce competition in the areas of e-business and

ASP services.

INDIAN BANKING SECTOR

The Indian Banking industry, which is governed by the Banking

Regulation Act of India, 1949 can be broadly classified into two

major categories, non-scheduled banks and scheduled banks.

Scheduled banks comprise commercial banks and the co-operative

banks. In terms of ownership, commercial banks can be further

grouped into nationalized banks, the State Bank of India and its

group banks, regional rural banks and private sector banks (the old/

71
new domestic and foreign). These banks have over 67,000

branches spread across the country.

The first phase of financial reforms resulted in the nationalization of

14 major banks in 1969 and resulted in a shift from Class banking to

Mass banking. This in turn resulted in a significant growth in the

geographical coverage of banks. Every bank had to earmark a

minimum percentage of their loan portfolio to sectors identified as

“priority sectors”. The manufacturing sector also grew during the

1970s in protected environs and the banking sector was a critical

source. The next wave of reforms saw the nationalization of 6 more

commercial banks in 1980. Since then the number of scheduled

commercial banks increased four-fold and the number of bank

branches increased eight-fold.

After the second phase of financial sector reforms and liberalization

of the sector in the early nineties, the Public Sector Banks (PSB) s

found it extremely difficult to compete with the new private sector

banks and the foreign banks. The new private sector banks first

made their appearance after the guidelines permitting them were

issued in January

1993. Eight new private sector banks are presently in operation.

These banks due to their late start have access to state-of-the-art

technology, which in turn helps them to save on manpower costs

and provide better services.

72
During the year 2000, the State Bank Of India (SBI) and its 7

associates accounted for a 25 percent share in deposits and 28.1

percent share in credit. The 20 nationalized banks accounted for

53.2 percent of the deposits and 47.5 percent of credit during the

same period. The share of foreign banks (numbering 42), regional

rural banks and other scheduled commercial banks accounted for

5.7 percent, 3.9 percent and 12.2 percent respectively in deposits

and 8.41 percent, 3.14 percent and 12.85 percent respectively in

credit during the year 2000.

Current Scenario

The industry is currently in a transition phase. On the one hand, the

PSBs, which are the mainstay of the Indian Banking system are in

the process of shedding their flab in terms of excessive manpower,

excessive non Performing Assets (Npas) and excessive

governmental equity, while on the other hand the private sector

banks are consolidating themselves through mergers and

acquisitions.

PSBs, which currently account for more than 78 percent of total

banking industry assets are saddled with NPAs (a mind-boggling Rs

830 billion in 2000), falling revenues from traditional sources, lack of

modern technology and a massive workforce while the new private

sector banks are forging ahead and rewriting the traditional banking

business

73
model by way of their sheer innovation and service. The PSBs are of

course currently working out challenging strategies even as 20

percent of their massive employee strength has dwindled in the

wake of the successful Voluntary Retirement Schemes (VRS)

schemes.

The private players however cannot match the PSB’s great reach,

great size and access to low cost deposits. Therefore one of the

means for them to combat the PSBs has been through the merger

and acquisition (M& A) route. Over the last two years, the industry

has witnessed several such instances. For instance, Hdfc Bank’s

merger with Times Bank Icici Bank’s acquisition of ITC Classic, Gulf

Bulls Finance and Bank of Madura. Centurion Bank, Indusind Bank,

Bank of Punjab, Vysya Bank are said to be on the lookout. The UTI

bank- Global Trust Bank merger however opened a pandora’s box

and brought about the realization that all was not well in the

functioning of many of the private sector banks.

Private sector Banks have pioneered internet banking, phone

banking, anywhere banking, mobile banking, debit cards, Automatic

Teller Machines (ATMs) and combined various other services and

integrated them into the mainstream banking arena, while the PSBs

are still grappling with disgruntled employees in the aftermath of

successful VRS schemes. Also, following India’s commitment to the

W To agreement in respect of the services sector, foreign banks,

74
including both new and the existing ones, have been permitted

to open up to 12 branches a year with effect from 1998-99 as

against the earlier stipulation of 8 branches.

Talks of government diluting their equity from 51 percent to 33

percent in November 2000 has also opened up a new opportunity

for the takeover of even the PSBs. The FDI rules being more

rationalized in Q1FY02 may also pave the way for foreign banks

taking the M& A route to acquire willing Indian partners.

Aggregate Performance of the Banking Industry

Aggregate deposits of scheduled commercial banks increased at a

compounded annual average growth rate (Cagr) of 17.8 percent

during 1969-99, while bank credit expanded at a Cagr of 16.3

percent per annum. Banks’ investments in government and other

approved securities recorded a Cagr of 18.8 percent per annum

during the same period.

In FY01 the economic slowdown resulted in a Gross Domestic

Product (GDP) growth of only 6.0 percent as against the previous

year’s 6.4 percent. The WPI Index (a measure of (inflation) increased

by 7.1 percent as against 3.3 percent in FY00. Similarly, money

supply (M3) grew by around 16.2 percent as against 14.6 percent a

year ago.

75
The growth in aggregate deposits of the scheduled commercial

banks at 15.4 percent in FY01 percent was lower than that of 19.3

percent in the previous year, while the growth in credit by SCBs

slowed down to 15.6 percent in FY01 against 23 percent a year ago.

The industrial slowdown also affected the earnings of listed banks.

The net profits of 20 listed banks dropped by 34.43 percent in the

quarter ended March 2001. Net profits grew by 40.75 percent in the

first quarter of 2000-2001, but dropped to 4.56 percent in the fourth

quarter of 2000-2001.

On the Capital Adequacy Ratio (CAR) front while most banks

managed to fulfill the norms, it was a feat achieved with its own

share of difficulties. The CAR, which at present is 9.0 percent, is

likely to be hiked to 12.0 percent by the year 2004 based on the

Basle Committee recommendations. Any bank that wishes to grow

its assets needs to also shore up its capital at the same time so that

its capital as a percentage of the risk-weighted assets is maintained

at the stipulated rate. While the IPO route was a much-fancied one

in the early ‘90s, the current scenario doesn’t look too attractive for

bank majors.

Interest Rate Scene

The two years, post the East Asian crises in 1997-98 saw a climb in

the global interest rates. It was only in the later half of FY01 that the

US Fed cut interest rates. India has however remained more or less

insulated. The past 2 years in our country was characterized by a

76
mounting intention of the Reserve Bank Of India (RBI) to

steadily reduce interest rates resulting in a narrowing differential

between global and domestic rates.

The RBI has been affecting bank rate and CRR cuts at regular

intervals to improve liquidity and reduce rates. The only exception

was in July 2000 when the RBI increased the Cash Reserve Ratio

(CRR) to stem the fall in the rupee against the dollar. The steady fall

in the interest rates resulted in squeezed margins for the banks in

general.

Governmental Policy

After the first phase and second phase of financial reforms, in the

1980s commercial banks began to function in a highly regulated

environment, with administered interest rate structure, quantitative

restrictions on credit flows, high reserve requirements and

reservation of a significant proportion of lendable resources for the

priority and the government sectors. The restrictive regulatory

norms led to the credit rationing for the private sector and the

interest rate controls led to the unproductive use of credit and low

levels of investment and growth. The resultant ‘financial repression’

77
led to decline in productivity and efficiency and erosion of

profitability of the banking sector in general.

This was when the need to develop a sound commercial banking

system was felt. This was worked out mainly with the help of the

recommendations of the Committee on the Financial System

(Chairman: Shri M. Narasimham), 1991. The resultant financial

sector reforms called for interest rate flexibility for banks, reduction

in reserve requirements, and a number of structural measures.

Interest rates have thus been steadily deregulated in the past few

years with banks being free to fix their Prime Lending Rates(PLRs)

and deposit rates for most banking products. Credit market reforms

included introduction of new instruments of credit, changes in the

credit delivery system and integration of functional roles of diverse

players, such as, banks, financial institutions and non-banking

financial companies (Nbfcs). Domestic Private Sector Banks were

allowed to be set up, PSBs were allowed to access the markets to

shore up their Cars.

Implications of Some Recent Policy Measures

The allowing of PSBs to shed manpower and dilution of equity are

moves that will lend greater autonomy to the industry. In order to

lend more depth to the capital markets the RBI had in November

2000 also changed the capital market exposure norms from 5

percent of bank’s incremental deposits of the previous year to 5

78
percent of the bank’s total domestic credit in the previous

year. But this move did not have the desired effect, as in, while

most banks kept away almost completely from the capital markets,

a few private sector banks went overboard and exceeded limits and

indulged in dubious stock market deals. The chances of seeing

banks making a comeback to the stock markets are therefore quite

unlikely in the near future.

The move to increase Foreign Direct Investment FDI limits to 49

percent from 20 percent during the first quarter of this fiscal came

as a welcome announcement to foreign players wanting to get a

foot hold in the Indian Markets by investing in willing Indian partners

who are starved of net worth to meet CAR norms. Ceiling for FII

investment in companies was also increased from 24.0 percent to

49.0 percent and have been included within the ambit of FDI

investment.

The abolishment of interest tax of 2.0 percent in budget 2001-02

will help banks pass on the benefit to the borrowers on new loans

leading to reduced costs and easier lending rates. Banks will also

benefit on the existing loans wherever the interest tax cost element

has already been built into the terms of the loan. The reduction of

interest rates on various small savings schemes from 11 percent to

9.5 percent in Budget 2001-02 was a much awaited move for the

banking industry and in keeping with the reducing interest rate

79
scenario, however the small investor is not very happy with

the move.

Some of the not so good measures however like reducing the limit

for tax deducted at source (TDS) on interest income from deposits

to Rs 2,500 from the earlier level of Rs 10,000, in Budget 2001-02,

had met with disapproval from the banking fraternity who feared

that the move would prove counterproductive and lead to increased

fragmentation of deposits, increased volumes and transaction costs.

The limit was thankfully partially restored to Rs 5000 at the time of

passing the Finance Bill in the

Parliament. April 2001-Credit Policy Implications The rationalization

of export credit norms in will bestow greater operational flexibility

on banks, and also reduce the borrowing costs for exporters. Thus

this move could trigger exports growth in the future. Banks can also

hope to earn increased revenue with the interest paid by RBI on CRR

balances being increased from 4.0 percent to 6.0 percent.

80
 ICICI BANK:

ICICI Bank is India's second-largest bank with total assets of Rs.

3,744.10 billion (US$ 77 billion) at December 31, 2008 and profit

after tax Rs. 30.14 billion for the nine months ended December 31,

2008. The Bank has a network of 1,419 branches and about 4,644

ATMs in India and presence in 18 countries. ICICI Bank offers a wide

range of banking products and financial services to corporate and

retail customers through a variety of delivery channels and through

its specialized subsidiaries and affiliates in the areas of investment

banking, life and non-life insurance, venture capital and asset

management. The Bank currently has subsidiaries in the United

Kingdom, Russia and Canada, branches in United States, Singapore,

Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International

Finance Centre and representative offices in United Arab Emirates,

China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia.

Our UK subsidiary has established branches in Belgium and

Germany.

ICICI Bank's equity shares are listed in India on Bombay Stock

Exchange and the National Stock Exchange of India Limited and its

American Depositary Receipts (ADRs) are listed on the New York

Stock Exchange (NYSE).

History

81
ICICI Bank was originally promoted in 1994 by ICICI Limited, an

Indian financial institution, and was its wholly-owned subsidiary.

ICICI's shareholding in ICICI Bank was reduced to 46% through a

public offering of shares in India in fiscal 1998, an equity offering in

the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's

acquisition of Bank of Madura Limited in an all-stock amalgamation

in fiscal 2001, and secondary market sales by ICICI to institutional

investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at

the initiative of the World Bank, the Government of India and

representatives of Indian industry. The principal objective was to

create a development financial institution for providing medium-

term and long-term project financing to Indian businesses. In the

1990s, ICICI transformed its business from a development financial

institution offering only project finance to a diversified financial

services group offering a wide variety of products and services, both

directly and through a number of subsidiaries and affiliates like ICICI

Bank. In 1999, ICICI become the first Indian company and the first

bank or financial institution from non-Japan Asia to be listed on the

NYSE.

After consideration of various corporate structuring alternatives in

the context of the emerging competitive scenario in the Indian

banking industry, and the move towards universal banking, the

managements of ICICI and ICICI Bank formed the view that the

merger of ICICI with ICICI Bank would be the optimal strategic

alternative for both entities, and would create the optimal legal
82
structure for the ICICI group's universal banking strategy. The

merger would enhance value for ICICI shareholders through the

merged entity's access to low-cost deposits, greater opportunities

for earning fee-based income and the ability to participate in the

payments system and provide transaction-banking services. The

merger would enhance value for ICICI Bank shareholders through a

large capital base and scale of operations, seamless access to

ICICI's strong corporate relationships built up over five decades,

entry into new business segments, higher market share in various

business segments, particularly fee-based services, and access to

the vast talent pool of ICICI and its subsidiaries.

In October 2001, the Boards of Directors of ICICI and ICICI Bank

approved the merger of ICICI and two of its wholly-owned retail

finance subsidiaries, ICICI Personal Financial Services Limited and

ICICI Capital Services Limited, with ICICI Bank. The merger was

approved by shareholders of ICICI and ICICI Bank in January 2002,

by the High Court of Gujarat at Ahmadabad in March 2002, and by

the High Court of Judicature at Mumbai and the Reserve Bank of

India in April 2002. Consequent to the merger, the ICICI group's

financing and banking operations, both wholesale and retail, have

been integrated in a single entity.

SUBSIDIARY COMPANIES

83
At March 31, 2008, ICICI Bank had 17 subsidiaries as listed

below:

• Domestic Subsidiaries International Subsidiaries

• ICICI Securities Limited ICICI Bank UK PLC

• ICICI Securities Primary Dealership Limited ICICI Bank Canada

• ICICI Prudential Life Insurance Company Limited ICICI Wealth

Management Inc.1

• ICICI Lombard General Insurance Company Limited ICICI Bank

Eurasia Limited Liability Company

• ICICI Prudential Asset Management Company Limited ICICI

Securities Holdings Inc.2

• ICICI Prudential Trust Limited ICICI Securities Inc.3

• ICICI Venture Funds Management Company Limited ICICI

International Limited

• ICICI Home Finance Company Limited

• ICICI Investment Management Company Limited

• ICICI Trusteeship Services Limited

Recent developments

• Completed Rs200b follow on offering

• Amalgamated Sangli Bank with itself

Board Members

84
➢ Mr. N. Vaghul, Chairman

➢ Mr. Sridar Iyengar

➢ Mr. Lakshmi N. Mittal

➢ Mr. Narendra Murkumbi

➢ Dr. Anup K. Pujari

➢ Mr. Anupam Puri

➢ Mr. M.K. Sharma

➢ Mr. P.M. Sinha

➢ Prof. Marti G. Subrahmanyam

➢ Mr. T.S. Vijayan

➢ Mr. V. Prem Watsa

➢ Mr. K.V. Kamath, Managing Director & CEO

➢ Ms. Chanda Kochhar, Joint Managing Director & Chief Financial

Officer

➢ Mr. V. Vaidyanathan, Executive Director

➢ Mr. Sonjoy Chatterjee, Executive Director

➢ Mr. K. Ramkumar, Executive Director

85
SHARE DATA

Company Name ICICI BANK

Market Cap Rs. 389.03B

Price Rs.349.45

BSE Sensex 9459.34

BSE Code 532174

NSE Code INE090A01013

Face Value Rs.10

52-Week High/Low Rs. 960.90/252.75

Beta of the Company 1.60

Returns1 Year -56.81 %

Weightage in SENSEX 5.32

Co-efficient of Determination 0.79

(R^2)

Free-float adj. factor as on 1

31/04/09

Index BSE 100 ,BSE Mid Cap

Group A

MFs invested in this company

Scheme % of scheme asset size

Templeton Fixed Horizon 99.95

Fund Series 1 - 13 M -
Institutional Plan - Dividend

Grindlays Fixed Maturity Plan 99.35

- 7 - A - Growth

86
Grindlays Fixed Maturity Plan 99.35
- 7 - B - Growth

Grindlays Fixed Maturity Plan 99.35

- 7 - A - Dividend

Grindlays Fixed Maturity Plan 99.35

-7-B-

Q3-2009: Key highlights

• 25% quarter-on-quarter increase in profit after tax to Rs.

12.72 billion in Q3 2009 from Rs. 10.14 billion in Q2-2009.

• Profit after tax of Rs. 12.30 billion in Q3-2008

• Capitalized on opportunities in declining interest rate scenario:

treasury gains of Rs. 9.76 billion in Q3-2009

• 19% year-on-year decrease in operating & direct marketing

agency expenses despite substantial increase in branches

• Net interest margin maintained at 2.4%

• Strategy of conscious moderation in credit growth

• Contraction in standalone loan book during the year to Rs.

2,125.21 billion at December 31, 2008

• Net NPA ratio of 1.95% at December 31, 2008

Share Holding Pattern

87
 Shareholdingpattern

7.68, 12% 11.52, 18% Banks, Fininsti &

0.41, 1% insurance
6.49, 10% FII's

Pvt Corporatebodies

NR I's,OCB's&foreign
others
General Public
39.01, 59%

MONTHWISE HIGH AND LOW VALUE OF SHARE PRICE OF ICICI

BANK LTD.

88
Month Monthly High in (Rs.) Monthly Lowin (Rs.)

Date Value Date Value

Jan-08 14-Jan-08 1465.00 22-Jan-08 1005.55

Feb-08 4-Feb-08 1245.20 11-Feb-08 996.00

Mar-08 3-Mar-08 1065.00 18-Mar-08 720.00

Apr-08 28-Apr-08 947.00 1-Apr-08 732.00

May-08 5-May-08 960.90 30-May-08 778.10

Jun-08 18-Jun-08 826.00 30-Jun-08 611.50

Jul-08 24-Jul-08 779.70 16-Jul-08 515.10

Aug-08 12-Aug-08 779.70 1-Aug-08 610.00

Sep-08 4-Sep-08 729.90 30-Sep-08 458.00

Oct-08 1-Oct-08 565.00 27-Oct-08 282.15

Nov-08 5-Nov-08 491.00 21-Nov-08 308.10

Dec-08 18-Dec-08 480.90 2-Dec-08 305.00

Jan-09 7-Jan-09 537.95 27-Jan-09 358.10

Feb-09 10-Feb-09 441.95 27-Feb-09 311.25

Mar-09 27-Mar-09 387.40 6-Mar-09 252.75

89
Major Gain And Lose For ICICI BANK LTD. From Jan-08 To

March-09

Five Major Gains For ICICI BANK in (%) terms

Date Prev.Close Day Close Change % Change
13-Oct-08 364.1 425.3 61.20 16.81%
31-Oct-08 345.75 399.35 53.60 15.50%
18-Jul-08 551.2 617.6 66.40 12.05%
23-Jul-08 661.3 738.25 76.95 11.64%
25-Jan-08 1,134.00 1,259.25 125.25 11.04%

Five Major Loses For ICICI BANK in (%) terms

Date Prev.Close Day Close Change % Change
10-Oct-08 453.5 364.1 -89.40 -19.71%
24-Oct-08 365.45 310 -55.55 -15.20%
17-Mar-08 878.2 757.4 -120.80 -13.76%
29-Sep-08 561.25 493.3 -67.95 -12.11%
7-Jan-09 523.15 468.05 -55.10 -10.53%

MONTHLY MARGIN FOR ICICI BANK LTD.

Month Monthly Avg. Margin % Monthly Avg. Margin

Jan-08 92.985 7.449%

Feb-08 56.919 5.064%

90
 Mar-08 63.986 7.528%

Apr-08 43.393 5.204%

May-08 32.278 3.677%

Jun-08 35.779 4.859%

Jul-08 45.559 7.359%

Aug-08 37.250 5.451%

Sep-08 45.074 7.452%

Oct-08 46.538 11.595%

Nov-08 34.183 8.763%

Dec-08 29.074 7.184%

Jan-09 30.163 7.009%

Feb-09 20.392 5.368%

Mar-09 21.093 6.963%

Technical Analysis :

Performance of ICICI Bank Ltd. In last 1 year

91
 Performance of ICICI Bank in last 1 year

1,600.00

1,400.00

1,200.00

1,000.00

800.00 Close

600.00
Resistance level:
400.00 Rs.760

200.00

0.00

11/1/2008

12/1/2008
10/1/2008
1/1/2008

2/1/2008

3/1/2008

4/1/2008

5/1/2008

6/1/2008

7/1/2008

8/1/2008

1/1/2009

3/1/2009
9/1/2008

2/1/2009
Support Level:
Rs.300

• Rumours started surfacing about the bank’s overseas

exposure and a run on its deposits as on Oct’08

• Such rumours prompted some depositors to withdraw money

• The rescue mission helped ICICI Bank’s stocks to recoup

heavy losses.

Monthly Data :

ICICI Bank's Performance On May'08

1000
950
Share Price

900 Resistance Level:Rs 940

850 Series1
800
Support Level: Rs.
750
805 92
700
5/ 08

5/ 0 8

5/ 08

10 8

20 8
12 8

14 8

16 8

18 8

22 8

24 8

26 8

28 8

30 8

8
5/ 0 0

5/ 0 0
5/ 0 0

5/ 0 0

5/ 00

5/ 0 0

5/ 0 0

5/ 0 0

5/ 00

5/ 0 0

00
5/ 00
20

20
20

2
/2

/2

/2

/2

/2
/2

/2

/2

/2

/2

/2
2/

4/

6/

8/
5/

Date
 ➢ Reason- As we could see the downturn of the stock in the

month of May’08 the reason was allotment of Equity shares

under the ESOS, 2000. They allotted around 2.5lakh equity

shares of face value of Rs10.

ICICI Bank's Performance On June'08

RESISTANCE
900 LEVELRs.780
800
700
Share Price

600
500
Series1 SUPPORT LEVEL: Rs.
400
300
200
100
0
20 8
6/ 08

6/ 0 8

6/ 08

10 8

12 8

14 8

16 8

18 8

22 8

24 8

26 8

28 8

30 8

8
6/ 0 0

6/ 0 0
6/ 0 0

6/ 0 0

6/ 00

6/ 0 0

6/ 0 0

6/ 0 0

6/ 00

6/ 0 0

00
6/ 00
20

20
20

/2

/2

/2

/2

/2
2

/2

/2

/2

/2

/2

/2
2/

4/

6/

8/
6/

Date

➢ Reason- ICICI Bank informed about the payment of dividend &

14th Annual General Meeting of the bank to be held in July 26,

2008, so we can say that the share price would move up in

July.

93
 ICICI Bank's Performance On July'08
Resistance Level:
800 Rs. 750
700
600
Share Price

500 Support Level : Rs.

400 Series1 505
300
200
100
0
7/ 0 8

7/ 0 8

7/ 0 8

7/ 0 8

11 8

13 8

17 8

21 8

23 8

27 8

31 8

8
15 8

19 8

25 8

29 8
7/ 00

7/ 00

7/ 00

7/ 00

7/ 00

7/ 00

7/ 00

7/ 0 0

7/ 00
00
7/ 0 0
7/ 00
20

20

20

20

/2

/2

/2
2

/2

/2

/2

/2

/2

/2

/2

/2
1/

3/

5/

9/
7/
7/

Date

➢ Reason- As we could see the rise in share price after the mid

of July due to bank income increased by 1485.6 as compared

to quarter ended June 30, 2008.

➢ Second thing was increase in Interest rates for various tenors

of retail Fixed

➢ Deposits by 0.75% to 1.00% w.e.f from Aug 1st, 2008.

ICICI Bank's performance On Aug'09

900 Resistance
800 Level:Rs 790
700
Share Price

600
500 Support
Series1
400 level:Rs630.
300
200
100
0
8/ 0 8

8/ 0 8

8/ 0 8

8/ 0 8

11 8

15 8

23 8

29 8
13 8

17 8

19 8

21 8

25 8

27 8

8
8/ 0 0

8/ 0 0

8/ 0 0

8/ 0 0

8/ 0 0

8/ 0 0
00
8/ 0 0

8/ 0 0

8/ 0 0
8/ 00
20

20

20

20

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2
1/

3/

5/

7/

9/
8/

Date

94
 ➢ Reason- ICICI had benefit from their Quarter 1 st results, that’s

why its price was increased than they allotted equity shares to

ESOS, 2000. But because of results IC had manage some how.

ICICI Bank's Performance On Sept'08

800
700 Resistance Level:Rs.
600 725
Share Price

500
400 Series1
Support Level: Rs.
300
200 550
100
0
9/ 0 8

9/ 0 8

13 8

15 8

17 8

19 8

21 8

23 8

25 8

27 8

29 8

8
9/ 0 8

9/ 0 8

11 8

9/ 0 0

9/ 0 0

9/ 0 0

9/ 0 0
9/ 0 0

9/ 0 0

9/ 0 0

9/ 0 0

9/ 0 0

00
9/ 00
20

20

20

20

2
/2

/2

/2

/2

/2

/2

/2

/2

/2

/2
1/

3/

5/

7/

9/
9/

Date

➢ REASON:-The Graph shows a downward trend in the month of

September. The vital reason for this is the financial crisis and

a sudden downturn in the banking sector.

➢ There were rumors of Insider trading that some of the

person’s in the top management selling their shares.

95
 ICICI Bank's Performance On Oct'08

600
500 Resistance Level:Rs.
470
Share Price

400
300 Series1
200
Support level: Rs.301
100
0
/3 8

/5 8

/7 8

/9 8
/1 08

/1 08

/1 08

/1 08

/1 08

/2 08

/2 08

/2 08

/2 08

/2 08

/3 08
08
10 0 0

10 0 0

10 0 0

10 0 0

10 /2 0

10 /2 0

10 /2 0

10 /2 0

10 /2 0

10 /2 0

10 /2 0

10 /2 0

10 /2 0

10 2 0
20
10 /20
/2

/2
/2

/2

9/

1/
/1

7
3

3
10

Date

REASON:-There was a downfall in the prices because of the

announcement of new BOD of the organization.

IC ICI Bank's Performance On D ec'08

500 Resistance Level: Rs

450
400 455
350
Share price

300 Support level: Rs.400

250 Series1
200
150
100
50
0
/3/ 8
/5/ 8
/7/ 8
/9 8
/11 08

/1 08
/1 08

/17 08
/19 08
/2 08
/23 08
/25 08
/27 08
/29 08
/31 08

8
12 20 0
12 200
12 200

12 200

00
12 /2 0
12 /2 0

12 /2 0

12 /2 0
12 / 20
12 /2 0

12 /2 0
12 /2 0

12 /2 0
12 /2 0
12 /2 0

/2
/1/

3
5

1
12

Da te

➢ Reasons- There was uptrend in prices due to Repurchase &

subsequent Extinguished of Bonds and cuts in lending &

deposit rates.

96
 ICICI Bank's Performance On Jan'09

600
500 Resistance Level:
Share Price

400 Rs. 440

300 Series1
200
100
0
1/ 0 9

1/ 0 9

13 9

15 9

17 9

19 9

21 9

23 9

25 9

27 9

29 9

9
1/ 0 9

1/ 0 9

11 9

1/ 0 0

1/ 0 0

1/ 0 0

1/ 0 0
1/ 0 0

1/ 0 0

1/ 0 0

1/ 0 0

1/ 0 0

00
1/ 00
20

20

20

20

2
/2

/2

/2

/2

/2

/2

/2

/2

/2

/2
1/

3/

5/

7/

9/
1/

Date

➢ Reason- ICICI announced Quarter 3 Results and posted a net

profit of Rs 15597.60 million for the quarter ended December

31, 2008 as compared to Rs 11198.20 million for the quarter

ended December 31, 2007.

IC IC I B a n k's P e rfo rm a n ce O n F e b '0 9

500 Resistance Level:

450 Rs445
400
350 Support level: Rs.325
Share Price

300
250 S eries 1
200
150
100
50
0
2/4 0 9

2/6 0 9

2/8 0 9
2/1 00 9

2/1 0 09

2/2 0 09

2/2 0 09
2/1 0 09

2/1 0 09

2/1 0 09

2/2 0 09

2/ 0 09

9
00
20
/20

/20

/2

/2
2
2/2

2
6/2

8/2

2
2/2

6/2
/

4/
0/

0/
2/2

24

Da te

97
 ➢ Reasons: There was a decline in the share prices at the

end of the month because of the news that the bank tops the

list of credit cards frauds & it amounts to losses of around

11.47 cr.

IC IC I B an k's P erfo rm an ce o n M arch '0 9

450 Resistance Level:

400 Rs.349
350
300 Support level: Rs.255
share Price

250
c los ing pric e
200
150
100
50
0
3/ 0 9
3/ 0 9

3/ 0 9
3/ 00 9
3/ 0 09

3/ 0 09
3/ 0 09
3/ 0 09
3/ 0 09
3/ 0 09

3/ 0 09
3/ 009

9
00
20
20

20
2
/2

/2

/2
/2

/2
/2

/2

/2

/2
2/
4/
6/
8/
10
12
14
16
18
20
22
24
26
3/

Da te

An upward movement of the stock prices has been seen in the

month of March because in a ceremony held in Hong Kong, ICICI

Bank has been awarded the following titles under The Asset Triple A

country awards for 2009:-

• Best Transaction Bank in India

• Best Trade Finance Bank in India

• Best Cash Management Bank in India

• Best Domestic Custodian in India

JANUARY EQUITY CHARTING

98
Weekly charts of Jan’09:

Weekly Chart

540
Share Price in (Rs.)

520

500
Resistance Level:
480
Rs.525
460
Support level: Rs.465
440

420
1/5/2009 1/6/2009 1/7/2009 1/8/2009 1/9/2009
Date

➢ Reason: ICICI Bank Ltd has informed BSE regarding a Press

Release dated December 31, 2008, titled "ICICI Bank cuts

lending and deposit rates".

Weekly Chart(12 Jan-16 Jan)

450
Resistance Level: Rs.442
Share Price in (Rs.)

440

430

420

410 Support level: Rs. 408

400

390
1/12/2009 1/13/2009 1/14/2009 1/15/2009 1/16/2009
Date

➢ Reason:

ICICI Bank Ltd has informed BSE that a meeting of the Board

of Directors of the Bank will be held on January 24, 2009, inter

99
 alia, to consider the approval of audited accounts for the

quarter ended December 31, 2008 (Q3).

Weekly Chart(19 Jan-23 Jan)

420
410
Share Price in (Rs.)

400 Resistance Level:

390
Rs380
380
370
360
350
340 Support level: Rs.368
330
1/19/2009 1/20/2009 1/21/2009 1/22/2009 1/23/2009
Date

➢ Interest rates to come down which will benefit SME’s.

➢ The prices are more towards stability because of increase in

Q3 profit by 3.4 %.

Weekly Chart (27Jan-30 Jan)

420

410 Resistance Level’s.

Share Price in (Rs.)

402
400

390

380
Support Level: Rs.
370 390

360
1/27/2009 1/28/2009 Date 1/29/2009 1/30/2009

➢ Reasons-Rise in share price of ICICI Bank due to

announcement of Q3 Results .ICICI posted a net profit of Rs

15597.60 million for the quarter ended December 31, 2008 as

10
0
 compared to Rs 11198.20 million for the quarter ended

December 31, 2007.

FEBRUARY EQUITY CHARTING

Weekly Chart For the month of Feb:

Performane Of ICICI Bank from 2nd Feb to 6th Feb

410
405
Resistance Level’s.
400
402
Share Price

395
390 Series1
385
380 Support Level: Rs.
375 390
370
2/2/2009 2/3/2009 2/4/2009 2/5/2009 2/6/2009
Date

➢ Reasons- Change in directorate with effect from 27 Jan, 2009.

ICICI Bank Ltd has informed BSE regarding a Press Release dated

January 24, 2009 titled "Performance Review - Quarter ended

December 31, 2008".

10
1
 Performance of ICICI Bank from 9th feb to 13th feb'09

440

435 Resistance Level: Rs.

430
435.5
Share price

425 Series1

420
Support Level; Rs.
415 421.5

410
2/9/2009 2/10/2009 2/11/2009 2/12/2009 2/13/2009
Date

➢ Reasons- Volatility is higher due to Repurchase & subsequent

Extinguishment of Bonds.

Performance of ICICI bank from 16th Feb to 20th Feb'09

450
400 Resistance Level: Rs.
350 408
300
Share Price

250 Support Level: Rs. 300

Series1
200
150
100
50
0
2/16/2009 2/17/2009 2/18/2009 2/19/2009 2/20/2009
Date

➢ Reason: ICICI Bank has decided to follow the slow-moving

pace in disbursing auto loans, unless there is clarity on the

repossession norms for vehicles. The lack of clarity is the

direct result of a Supreme Court judgment, which requires

10
2
 lenders to follow the due process of law for recovering

vehicles from defaulters.

Performance of ICICI Bank from 24th feb to 27th feb '09

345

340 Resistance Level; Rs.

340.5
335
Share Price

330 Series1

325 Support Level: Rs. 325

320

315
2/24/2009 2/25/2009 2/26/2009 2/27/2009
date

➢ Reason: There was an increase in prices after 25th Feb

because the bank was awarded Dun & Bradstreet Banking

Award 2009.

MARCH EQUITY CHARTING

Weekly Performance of ICICI Bank in March’09

Performance from 2nd March to 6th March

310

300
Resistance Level: Rs.
290 300
Share price

280 Series1 Support Level: Rs.

270
270

260

250
3/2/2009 3/3/2009 3/4/2009 3/5/2009 3/6/2009
Date

10
3
 ➢ Reason: The RBI has taken a positive step by announcing

the cut of 50 basis points in repo as well as reverse repo rate,

said Ms Chanda Kochhar, CEO-designate, ICICI Bank, said. The

RBI has sought to create conditions conducive to the

consumption and investment, taking into account the global

developments and their impact on India: slowdown in growth

on one hand and decline in inflation on the other.

Performance from 9th March to 13th March

320
310 Resistance Level: Rs.
310
300
Share Price

290
280 Series1
270 Support Level: Rs 283
260
250
240
3/9/2009 3/10/2009 3/11/2009 3/12/2009 3/13/2009
date

➢ Reason: ICICI BANK made a recovery in this week after falling

of more than 12% in the previous week due to positive global

news and the effect of stimulus package announced by the

Govt. of India.

10
4
 Performance From 16th March to 20th March'09

340
Resistance Level: Rs.
335 338

330
Share Price

Support Level: Rs. 324

325 Series1

320

315

310
3/16/2009 3/17/2009 3/18/2009 3/19/2009 3/20/2009
Date

➢ Reason: ICICI Bank is planning to set up a new entity to house

its automated teller machines (ATMs) as well as the point-of-

sale (PoS) terminals, which accept credit and debit card

payments. This is the first time that an Indian bank is planning

to transfer its ATM as well as PoS assets to a separate

company.

Performance from 23rd March to 27th March'09

390
380 Resistance Level: Rs.
370
382
Share price

360
Series1
350
Support level: 350
340
330
320
3/23/2009 3/24/2009 3/25/2009 3/26/2009 3/27/2009
date

10
5
 ➢ Reason: "Banks should start considering 0.50 per cent

cut in interest rate ... Possibly in a week or few weeks,"

Kamath said. He also said "Clearly, inflation is nearing zero,

but we are not able to bring down lending rate to single digit.

So there is a need to look at more policy action,".

Financials

➢ Operating profit ex-treasury is down 10% YoY and 26%

QoQ

NII grew 2% YoY but declined 7% QoQ to Rs19.9b. Loans declined

1% YoY and 4% QoQ to Rs2.1t. Reported margins were stable at

2.4%. Fee income at Rs13.5b was down 25% YoY and 28% QoQ.

Treasury income rose from Rs2.8b in 3QFY08 to Rs9.8b in 3QFY09

- driving PAT. Treasury Income during the quarter includes Rs2.5b

on MTM reversal. Opex declined 18% YoY and was stable QoQ.

Operating profit ex-treasury is down 10% YoY and 26% QoQ in

3QFY09. Total deposits declined by 9% YoY and 6% QoQ to Rs2.

This is partly due to strategic slowdown and mainly due to flight of

retail deposits.

➢ Asset quality deterioration continues

Reported gross NPAs declined 6% QoQ to Rs96b as management

wrote off Rs16b of gross NPAs during the quarter and sold off Rs2b

of NPAs. NPA generation during the quarter was Rs12b (stable for

last 4-5 quarter). Due to the write off decision; provision coverage

declined to 54% from 58% a quarter ago. Net NPAs increased 4%

10
6
QoQ despite Rs10b of fresh provision during the quarter. Net

NPAs now stand at 9% of net worth. Management expects gross

NPA build up to continue driven by rising defaults in unsecure

portfolios and CVs (account for 16% of total loan book). While so

far the corporate book is not showing any signs of weakness, it could

throw up NPAs in FY10. We have modeled NPA cost rising to 1.7%

in FY09 and 1.9% in FY10 (from 1.3% in FY08) and then falling to

1.5% in FY11.

➢ ICICI Prudential Life impacted severely

ICICI Pru Life’s retail WNRP and NBAP declined 33% QoQ in 3QFY09.

ICICI Prudential Life NBAP declined by 5% YoY in 9MFY09 to Rs7.12b.

NBAP decline was 40% YoY in 3QFY09. NBAP margin contracted to

18.9% in 9MFY09 from 19.3% in 9MFY08 –however was stable

QoQ.

➢ Overseas subsidiaries a mixed bag

ICICI UK’s total assets declined QoQ from USD8.7b to USD7.6.

Loan book however improved marginally from USD2.5b in

September 2008 to USD2.7b in December 2008. ICICI UK earned

profit of ~USD37m during 3QFY09. However due to large MTMs in

1HFY09, 9MFY09 PAT is merely USD 1.4m. MTM taken through

reserves during 3QFY09 was a substantial USD71m v/s USD42m

booked in 1HFY09.

ICICI Canada’s total assets increased QoQ from USD5.5b to

USD6.5b. Loan book grew sharply 40% QoQ to USD3.6b. Earnings

10
7
were CAD11m in 3QFY09 and CAD33m in 9MFY09.

➢ Reducing target price to Rs446 - upside of 23%

We expect ICICI Bank to report EPS of Rs34 in FY09 and Rs39 in

FY10. BV would be Rs439 in FY09 and Rs463 in FY10. ABV

(adjusted for 50% investment in subs and 65% net NPAs) would be

Rs364 in FY09 and Rs384 in FY10. We reduce our target price from

Rs497 to Rs446 mainly due to a) applying 0.8x multiple to BV adjusted

for 50% investments in subsidiaries and 65% net NPAs (earlier not

adjusted for NPAs) and b) reducing the value of ICICI Pru Life from

Rs116/share to Rs82/share.

Quarterly Results in brief:

Particulars Dec’08 Sept’08 Absolute %

(Rs crore) (Rs crore) Change chan
ge

Sales 7,836.08 7,834.98 1.1 0.014

Operating 5,094.27 5,171.41 -77.14 -1.4

profit

Interest 5,845.67 5,687.36 157.91 2.77

Gross profit 2,770.84 2,284.91 485.93 21.26

EPS(Rs) 11.43 9.11 2.32 25.46

Analysis:

10
8
 • The sales have increased by 0.014% in Q3.

• Operating profit has decreased on the assumption that either

operating expenses have increased or there is an increase in

NPA’s.

• As there is an increase in gross profit & EPS, it shows that

the demand of the share will increase in the future.

RATIO ANALYSIS:-

Y/E MARCH 2007 2008 2009E 2010E 2011E

Spreads
Analysis(%)

Avg. Yield-Earning 7.9 8.9 8.7 8.3 8.3

Assets

Avg.Cost- 6.4 7.4 7.2 6.4 6.2

Int.Bear,Liab.

Interest Spread 1.6 1.4 1.4 1.9 2

Net Interest 2 2.1 2.3 2.7 2.8

Margin

Pofitability
Ratios(%)

ROE 13.4 11.7 7.9 8.6 10.6

Adjusted ROE 13.4 12.9 8.8 9.7 12.1

Int. 74.4 76.3 73.6 67.9 66.1

Expended/int.Ear
ned

Other Inc./Net 55.1 54.7 48.1 45.6 44.9

Income

10
9
Efficiency
Ratios(%)

Op. Exps./Net 57.9 53.3 45.6 44.1 43.6

Income

Empl. Cost/Op. 24.2 25.5 28.7 27.9 28.4

Exps.

Busi. Per Empl.(Rs 110.7 110.7 112.8 99.9 104.4

m)

NP per Empl.(Rs. 9.3 10.3 9.4 9.5 11.9

lac)

Asset-Liability
Profile(%)

Adv./Deposit 85 92.3 100.9 101 100.3

Ratio

CASA Ratio % 21.8 26.1 28 31.5 33.5

Invest/Deposit 39.6 45.6 49.7 50.7 49.3

Ratio

G-Sec/Invest 73.8 67.6 62.3 59.2 60.8

Ratio

Gross NPAs to 2.1 3.3 4.3 4.6 4.1

Adv.

Net NPAs to Adv. 1 1.5 1.9 1.7 1.3

CAR 11.7 14 14.9 14 12.9

Tier 1 7.4 11.8 11.5 10.7 9.7

Valuation

Book 270 418 439 463 500

Value(Rs.)

Price-BV (x) 0.9 0.8 0.8 0.7

11
0
ABV(for Subs 256 397 415 440 480
Invst. And
NPAs)

EPS(Rs.) 34.6 37.4 33.8 38.6 51.2

EPS Growth(%) 21.2 8 -9.7 14.3 32.6

Price-Earning 10.5 9.7 10.8 9.4 7.1

(x)

Adj.Price- 6.9 6.4 7.1 5.9 4.4

Earnings(x)

COMPARATIVE VALUATIONS:-

ICICI BANK HDFC BANK AXIS BANK

P/E(x FY09E 7.4 18.5 17.8

)

FY010 6.4 14.8 13.4

E

P/BV( FY09E 0.7 2.8 2.6

x)

FY010 0.6 2.1 2.2

E

ROE( FY09E 8.5 15.6 15.4

%)

FY10E 9 16.6 17.9

ROA( FY09E 0.9 1.3 1.1

%)

FY010 1 1.4 1.1

E

RESULT ANALYSIS:-

11
1
 3QFY0 3QFY0 YOY 2QFY0 QO FY08 FY09E FY10E
9 8 GR. 9 Q
% GR.
%

Interest 78,361 79,118 78,350 0 3,07,8 3,13,1 3,01,6

Income 83 42 85

Interest 58,457 59,521 56,874 3 2,34,8 2,30,6 2,04,7

Expense 42 21 90

Net 19,90 19,59 2 21,47 73,04 82,52 96,89

Interest 4 7 6 1 1 5
Income(NII)

Other 25,150 24,266 4 18,773 34 88,108 76,615 81,244

Income

- Fees 13,470 17,850 18,760 -28 66,270 66,270 69,584

- Treasury 9,760 2,820 246 -1,530 -738 8,150 4,000 5,000

Income(Incl
uding
MTM)

- Others 1,920 3,596 1,543 24 13,688 6,345 6,660

Net Income 45,05 43,86 3 40,25 12 1,61,1 1,59,1 1,78,1

4 3 0 49 35 39

Total 17,341 21,276 -18 17,400 0 81,542 70,704 76,359

Operating
Costs

- Staff 5,030 5,705 -12 4,881 3 20,789 20,276 21,290

Costs

- Other 12,311 15,571 -21 12,520 -2 60,753 50,428 55,069

Opex

Operating 27,71 22,58 23 22,84 21 79,60 88,43 1,01,7

Profit 3 7 9 7 1 80

Provisions 10,080 7,600 33 9,235 9 29,046 37,684 42,990

PBT 17,63 14,98 18 13,61 30 50,56 50,74 58,79

3 7 4 1 7 0

Tax 4,910 2,681 83 3,472 41 8,984 13,194 15,873

Tax Payout 28 18 3 26 18 26 27
11
2
SUPPORT AND RESISTANCE LEVEL FOR JUNE MONTH

Market is at the resistant level (SENSEX 14,500 points as on

20th Mayl, 2009) and ICICI BANK share price is highly correlated with

market so for next 10 days ICICI BANK share price is expected to

achieve a new support level of 650 points.

News from India

Reserve Bank of India is expected to relax further Repo Rate, CRR,

and SBI already had followed the move by cutting the lending rate

and home loan rate to all segments and it is expected that all others

banks can also follow the same ,which can impact the profitability of

the banking sector.

“Looking at the above given information we can project the

new Support Level at 650* points and Resistance Level at

750* points for the Second and third week of June”.

SUPPORT AND RESISTANCE LEVEL FOR THE COMING MONTHS

Beginning of June the news could be favorable but will the same

Support and Resistance Level maintain for the rest of the weeks; our

team have done research on it and made the conclusion that it will

not be maintaining the same levels.

11
3
REASONS:

• Market fall is expected because it cannot sustain at this level

for longer time (Market as on 2nd April, 2009).

• 4th Quarter Result would the deciding point for the share price

of ICICI BANK.

• General Election is not far away and market will take some

rest during this time frame.

• Loss from the overseas market by having exposure to foreign

exchange may be crucial point for the ICICI BANK share price.

“Looking at the above given information I projected that the

new Support Level for the Month of June will be 670* points

and Resistance level will be 810* points”.

Key investment arguments :-

• Modest loan growth with improving margin would result

in significant net interest income growth; fee income is

expected to remain buoyant

• Subsidiaries hold significant values

Valuation and view:-

• Improvement in CASA and margins, and reduction in

net NPAs will be the key triggers to watch out for.

• Adjusted for subs value at Rs139/share (reduced from

11
4
 Rs169); stock trades at 0.6x FY10E ABV (adjusted

for 50% investment in subs and 65% net NPAs).

• We value ICICIBC at Rs446/share (0.8x FY10E ABV

+ Rs139/share for subs value).

Sector view:-

• YTD loan growth of 24% and deposit growth of 21%. 

Concerns on slowing economic growth.

• Selective buying favoring banks with higher earnings

visibility and reasonable valuations.

Key investment risks:-

• NPAs have been increasing over the last few quarters and

have reached 2% (net) as on December 2008 .

• NIM and CASA ratio continue to be one of the lowest in the

industry.

SWOT ANALYSIS

➢ STRENGHTS:

1) Online Services: ICICI Bank provides online services of all it’s banking

facilities. It also provides D-Mart account facilities on-line, so a person can

access his account from anywhere he is. [D-Mart is a dematerialized account

opened by a salaried person for purchase & sale of shares of different

companies.]

11
5
2) Advanced Infrastructure: Branches of ICICI Bank are well

equipped with advanced technology to provide the customers with

taster banking services. All the computerized machines are located

in suitable manner & are very useful to the customers & staff of the

bank.

3) Friendly Staff: The staff of ICICI Bank in all branches is very

friendly & help the customers in all cases. They provide faster

services along with bonding & personal relationship with the

customers.

4) 12 hrs. Banking services: Compared to other bank ICICI bank

provides long hrs. of services i.e. 8-8 services to the customers. This

service is one of it’s kind & is very helpful for the customers who are

in urgent need of money.

5) Other Facilities to the Customers & Employees: ICICI Bank also

provides other facilities like drinking water facilities, proper sitting

arrangements to the customers. And there are also proper

Ventilation & sanitary facilities for the employees of the bank.

6) Late night ATM services: ICICI bank provides late night ATM

services to the customers. The ATM centers of ICICI bank works

even after 11:00pm. at night in certain branches.

➢ Weakness:

1) High Bank Service Charges: ICICI bank charges highly to

customers for the services provided by them when compared to

11
6
other bank & that is why it is only in the reach of higher class

of society.

2) Less Credit Period: ICICI bank provides credit facilities but only

upto limited period. Even when the credit period is not over it

sends reminder letters to the customers which may annoy them.

➢ OPPORTUNITIES:

1) Bank –Insurance services: The bank should also provide

insurance services. That means the bank can have a tie-up with a

insurance company. The bank will advertise & promote the different

policies introduced by the insurance company & convince their

customers to buy insurance policies.

2) Increase in percentage of Returns on increase: The bank should

provide higher returns on deposits in comparison of the present

situation. This will also upto large extent help the bank earn profits

& popularity.

3) Recruit professionally guided students: Bank & Insurance is a

special non-aid course where the students specialize in the

functioning & services of the bank & also are knowledge about

various tax policies. The bank can recruit these students through

tie-ups with colleges. Such students will surely prove as an asset to

the bank.

4) Associate with social cause: The bank can also associate itself

with social causes like providing relief aid patients, funding towards

11
7
 natural calamities. But this falls in the 4th quadrant so the bank

should neglect it.

➢ THREATS

1) Competition: ICICI Bank is facing tight competition locally as well as

internationally. Bank like CITI Bank, HSBC, ABM, Slandered

Chartered, HDFC also provide equivalent facilities like ICICI do and

also ICICI do not have consistency in its international operation.

2) Net Services: ICICI Bank provides all kind of services on-line.

There can be easy access to the e-mail ids of the customers through

wrong people. The confidential information of the customers can be

leaked easily through the e-mail ids.

3) Decentralized Management: Each branch manager is given the

authority of taking decisions in their respective branches. The

decisions made by different managers are diverse and any one

wrong decision can laid to heavy losses to the bank.

4) No Proper Facilities To Uneducated customers: ICICI Bank

provides all services through electronic computerized machines.

This creates problems to the less educated people. But this threat

falls in the 4th quadrant so its negligible. The company can avoid this

threat.

Indian Realty Sector

Till a few months back, the real estate industry in India was

witnessing a boom, it is only sometime back the industry is facing a

11
8
downturn. But one cannot deny that the real estate market of

India is still unorganized, fairly fragmented, mostly characterized by

small players with a local presence. Earlier, real estate developers

were viewed with an element of doubt. Realty players and

developers were quite often identified as people dealing with large

amounts of unaccounted money and lacking transparency. One felt

that they would use unscrupulous means to acquire a variety of

regulatory approvals. The tremendous growth of the real estate

sector and the change of belief of people can be attributed to

various fundamental factors such as growing economy, growing

business needs, etc. However, this boom in the Indian real estate

sector is restricted to areas such as commercial office space, retail

and housing sectors.

Currently, the sector is facing a major resource crunch. There is an

obvious lack of qualified skilled people/workers in construction firms,

PMC firms, etc. Along with this, the manpower shortage is the

shortage of availability of relevant statistics which has raised an

ambiguity in the minds of people as to how much construction

activity is actually taking place and one can not actually gauge the

demand and supply trends accurately. As a majority of developers

are concerned about developing up-market and high-class

apartments/villas and penthouses, the opportunities and issues of

affordable, low cost housing in India have been ignored so far, as a

result there is a dearth of low cost affordable units.

11
9
 UNITECH

COMPANY PROFILE:-

Unitech Ltd. Established in 1971 by a group of technocrats led by

Mr. Ramesh Chandra, Unitech has over the last three decades

emerged as one of the leading business houses in India. Apart from

the flagship business of real estate development, the group has

interests in varied businesses such as Fund management,

Infrastructure development and Transmission tower manufacturing.

The Group has recently ventured into mobile telecom business.

The Group’s flagship company Unitech Limited is a leading

real estate developer in India with a market capitalization of around

USD 6 billion. Unitech has been at the forefront of the rapid

transformation of Indian real estate sector in the recent years.

The Company was incorporated on 9th February1971 as United

Technical Consultants Pvt. Ltd., and was converted into a public

Limited Company on 3rd October1985. The company carries on

construction of industrial projects on a turnkey basis and execution

of Housing Projects and export orders.

The Company was promoted by a group of technocrats, proficient in

the field of soil and foundation engineering and managed By

Professionals. The Company undertakes projects both in India and

Abroad.
12
0
 Unitech has the most diversified product mix comprising

residential, commercial/Information Technology (IT) parks, Retail,

Amusement parks, Hotels and Special Economic Zones. It is known

for the quality of its product and is the first real estate developer to

have been certified ISO 9001:2000 certificate in North India.

SHAREHOLDING PATTERN DEC 31, 2008

Category of Number of Total number of

shareholder shareholders shares % of shares

Shareholding of Promoter and Promoter Group

A)
Indian 38 1091232375 67.22

B)
Foreign 1 3822000 0.24

Public shareholding

A)
Institutions 193 127446588 7.86

B) Non-
institutions 499315 400874037 24.69

Total 499547 1623375000 100.01

Unitech Share Price from 01-Jan-08 to 31-Mar-09

12
1
 Price

100
200
300
400
500
600

0
1/1/2008

2/1/2008

3/1/2008

4/1/2008

5/1/2008

6/1/2008

7/1/2008

8/1/2008

Date
9/1/2008

10/1/2008
UnitechShare Price from01-Jan-08 to31-Mar-09

11/1/2008

12/1/2008

1/1/2009

2/1/2009

3/1/2009

2
12
36
nce
level

Level
Resista

Support
 SHARE PERFORMANCE CHART ON BSE

400
350
300
250
200
150
High Price
100
Low Price
50
10/1/2008

11/1/2008

12/1/2008

3/1/2009
4/1/2008

5/1/2008

6/1/2008

7/1/2008

8/1/2008

9/1/2008

1/1/2009

2/1/2009

• 52 Week High 338.00 05-May-2008

• 52 Week Low 21.80 28-Nov-2008

• All Time High 338.00 05-May-2008

• All Time Low 21.80 28-Nov-2008

OCTOBER 2008

12
3
 U n it e c h S h a r e P r ic e o f O c t - 0 8
150

100 Resistanc

Price
50 e level
0 101.0

10/1/08

10/5/08
10/7/08
10/9/08
10/3/08

10/13/08
10/15/08

10/21/08
10/23/08

10/29/08
10/31/08
10/11/08

10/17/08
10/19/08

10/25/08
10/27/08
Date Support
level
30.00

• HIGH 115.40 01-OCT-2008

• LOW 31.00 24-OCT-2008

• Fall of rs.84.40 within a month

• Sale is decrease by 75%.

• Rate was down because Net Profit Decrease by 62%. &

Expenditure increased by 62% .

NOVEMBER 2008

U ni t ec h S har e P r i c e o f N o v - 0 8 Resistanc
60 e level
40
56.00
Price

20
0
11/7/08
11/3/08
11/5/08

11/9/08
11/11/08
11/13/08
11/15/08
11/17/08
11/19/08
11/21/08
11/23/08
11/25/08
11/27/08

Support
Da t e level
23.00

• HIGH 56.55 10-NOV-2008

• LOW 23.15 28-NOV-2008

12
4
• Fall of rs.33.40 within a month

• Sale is decrease by 75%.

• Rate was down because Net Profit Decrease by 62%. &

Expenditure increased by 62%

DECEMBER 2008

U ni t e c h S ha r e P r i c e o f D ec - 0 8
Resistanc
50 e level
40
30 45.00
Price

20
10
0
08

08

08

08

08

Support
20

20

/20

/20

/20
/1/

/8/

/15

/22

/29

Date
12

12

level
12

12

12

32.00

• HIGH 45.75 22-DEC-2008

• LOW 24.00 01-DEC-2008

• Fall of rs.21.75 within a month

• Sale is decrease by 75%.

• Rate was down because Net Profit Decrease by 62%. &

Expenditure increased by 62%

• Inflation is decrease by 2 % from last month.

12
5
 JANUARY 2009

Unite ch Share Price of Jan-09

50 Resistanc
40
30 e level
Price

20 47.00
10
0
09

09

9
00

00

00
20

20

Support
/2

/2
/2
1/

8/

15

22

29
1/

1/

Date
1/

1/

1/
level
26.50

• HIGH 47.60 05-JAN-2009

• LOW 26.9523-JAN-2009

• Fall of rs. 20.75 within a month.

• Inflation is decrease by 1 % from last month.

FEBRUARY 2009

33
Unite ch Shar e Price of Fe b-09 Resistanc
32
31 e level
30
32.10
Price

29
28
27
26
25
2/6/2009
2/2/2009
2/4/2009

2/8/2009
2/10/2009

2/14/2009
2/16/2009
2/18/2009
2/20/2009
2/22/2009
2/24/2009
2/26/2009
2/12/2009

Support
Date
level
27.65

• HIGH 32.15 11-FEB-2009

• LOW 27.7505-FEB-2009

• Fall of rs. 04.40 within a month

• Inflation is decrease by 2.10 % from last month.

12
6
 MARCH 2009

Unite ch Share Price of M ar-09

40 Resistanc
30
e level
Price

20
10 36.40
0
9

09

09
9
00

00

00

20

20
2

/2
2/

9/

/
16

23

30
3/

3/

Support

3/

3/
3/

Date
level
24.70

• HIGH 36.50 26-MAR-2009

• LOW 24.8009-MAR-2009

• Fall of rs. 11.70 within a month

• Inflation is decrease by .2.80 % from last month.

JANUARY EQUITY CHARTING

Fir s t We e k of Jan'09 Resistance

50 level 47.50
40

30

20

10

0
1/5/2009 1/6/2009 1/7/2009 1/8/2009 1/ 9/2009
D ate Support
level
26.50

• HIGH 47.60 05-JAN-2009

• LOW 36.0009-JAN-2009

• Fall of rs. 11.60 within a week

12
7
 Se cond We e k of Jan'09
Resistanc
36 e level
34
34.80
32

Price 30

28

26
Support
1/12/2009 1/13/2009 1/14/2009 1/15/2009 1/16/2009 level
Date
29.40

• HIGH 34.95 14-JAN-2009

• LOW 29.4516-JAN-2009

• Fall of rs. 05.50 within a week

Resistanc
e level
31.90

Support
level
26.80

T h ir d W e e k Of Ja n '09
34
32
30
Price

28
26
24
1 /1 9/2 0 09 1/20/20 0 9 1 /21/20 09 1/22/20 09 1/23/2 0 09
DA t e

• HIGH 31.95 19-JAN-2009

• LOW 26.9523-JAN-2009

12
8
• Fall of rs. 05.00 within a week

Resistanc
e level
32.50

Support
level
27.15

Forth We e k of Jan'09

33
32
31
30
29
Price

28
27
26
25
24
1/27/2009 1/28/2009 1/29/2009 1/30/2009
Date

• HIGH 32.50 30-JAN-2009

• LOW 27.1527-JAN-2009

• Fall of rs. 05.35 within a week

FEBRUARY EQUITY CHARTING

12
9
 Resistanc
e level
29.25

Support
level
27.75

Fir s t W e e k o f Fe b '09

29.5
29
28.5
Price

28
27.5
27
26.5
2/2/2009 2/3/2009 2/4/2009 2 /5/2009 2/6/2009
Date

• HIGH 29.30 02-FEB-2009

• LOW 27.7505-FEB-2009

• Fall of rs. 01.55 within a week

Se cond We e k of Fe b'09

33
32 Resistanc
31 e level
Price

30
29
32.10
28
27
2/9/2009 2/10/2009 2/11/2009 2/12/2009 2/13/2009 Support
Date level
31.10

13
0
• HIGH 32.15 11-FEB-2009

• LOW 29.0509-FEB-2009

• Fall of rs. 03.10 within a week

Third Week of Feb'09

30.5
30
29.5 Resistanc
29
e level
Price

28.5
28
27.5 29.25
27
26.5
2/16/2009 2/17/2009 2/18/2009 2/19/2009 2/20/2009
Date Support
level
28.30

• HIGH 30.20 16-FEB-2009

• LOW 28.0520-FEB-2009

• Fall of rs. 02.15 within a week

13
1
 Resistanc
e level
28.90

Support
level
28.10

Fo u r th W e e k o f Fe b '09

29
2 8.8
2 8.6
2 8.4
Price

2 8.2
28
2 7.8
2 7.6
2/24/2 009 2 /25/200 9 2/2 6/2 00 9 2 /2 7 /2 0 09
Da te

• HIGH 28.90 26-FEB-2009

• LOW 28.1025-FEB-2009

• Fall of rs. 00.80 within a week

MARCH EQUITY CHARTING

13
2
 Resistanc
e level
26.60

Support
level
25.60

First Week of Mar'09

27.5

27

26.5
Price

26

25.5

25

24.5
3/2/2009 3/3/2009 3/4/2009 3/5/2009 3/6/2009
Date

• HIGH 26.95 02-MAR-2009

• LOW 25.5505-MAR-2009

• Fall of rs. 01.40 within a week

Second Week of Mar'09

Resistanc
27
26.5 e level
26
25.5
26.50
Price

25
24.5
24
23.5
3/9/2009 3/10/2009 3/11/2009 3/12/2009 3/13/2009 Support
Date
level
25.00

13
3
• HIGH 26.50 13-MAR-2009

• LOW 25.0512-MAR-2009

• Fall of rs. 01.45 within a week

Resistanc
e level
27.10

Support
level
25.95

T hir d w e e k o f M ar '09

27.5
27
26.5
Price

26
25.5
25
3/16/2009 3/17/2009 3/18/2009 3/19/2009 3/20/2009
Date

• HIGH 27.15 19-MAR-2009

• LOW 25.9517-MAR-2009

• Fall of rs. 01.20 within a week

13
4
 Resistanc
e level
36.00

Support
level
29.00

Fo u r t h W e e k o f M ar '09

40

30
Price

20

10

0
3/23/2009 3/24/2009 3/25/2009 3/26/2009 3/27/2009
Date

• HIGH 36.50 26-MAR-2009

• LOW 28.0023-MAR-2009

• Fall of rs. 08.50 within a week

YEARLY MARGIN FOR UNITCH LTD.

YEAR Avg. Margin Avg. Margin (%)
2008 15.931 8.935%
TILL MAR-09 2.747 8.666%

13
5
 MONTHLY MARGIN FOR UNITECH LTD.
Month Monthly Avg. Margin Monthly Avg. Margin (%)
Jan-08 39.441 9.033%
Feb-08 28.867 7.764%
Mar-08 24.897 8.828%
Apr-08 13.305 4.748%
May-08 13.955 5.015%
Jun-08 14.098 7.320%
Jul-08 12.974 8.084%
Aug-08 8.935 5.249%
Sep-08 10.467 7.850%
Oct-08 11.745 19.132%
Nov-08 5.578 13.489%
Dec-08 4.007 11.342%
Jan-09 4.41 12.739%
Feb-09 1.953 6.629%
Mar-09 1.537 5.816%

Margin:-The Average Margin for UNITECH LTD. In the last one year

and 3 months is 8.75% and Monthly Margin Range from 4-19%. The

Margin at 0% Risk comes out 1.5% or Paisa 41 relating to current

market price, considering 15% as the Risk free margin for UNITECH

LTD.

Financials:
13
6
• Strong asset base offsets short-term liquidity

concerns:Unitech reported a moderate financial performance

in Q2’09 due to the

liquidity crisis and a slowdown in the real estate sector. The

EBIDTA

margin improved considerably because of a drop in the

construction cost.We upgrade our rating from Hold to Buy due

to the following reasons:

• Huge land bank spread across the country: Unitech has

13,923 acres

of land spread across all major cities of the country. Nearly

70% of the

land has been purchased from the government with

clear titles.

Approximately 70 % of the land bank spreads across the

four cities of

Kolkata (35%), NCR (14%), Chennai (12%), and Vizag (9%).

• Operating margins likely to fall but remain at higher

levels: The

operating margin is likely to decline from the current 59.9%

due to the

expected fall in property prices and a shift in focus towards

low-margined

middle income housing. However, lower steel and cement

13
7
 prices are

expected to partially offset the decline in the margins.

• Short-term liquidity likely to improve: Unitech is

struggling with short-

term liquidity concerns due to its high leverage and debt

obligation of

Rs. 27 bn due by the end of FY09. We believe that it can tide

over thecurrent situation through the sale and monetization of

its assets.

• Attractive valuation : Unitech’s stock currently trades

at a 43.4%discount to our fair value estimate of Rs. 46,

which incorporates the

substantial decline in real estate prices across all segments.

We believe

that the stock has a long-term upside potential as the

Company has ahuge land bank at diversified locations, a

strong asset base, and the expertise and execution skills.

Quarterly Data Q2'08 Q1'0 Q2'09 YOY% QOQ%

9

(Rs. mn,except per share data)

Net Sales 10135 1031 9831 -3.00% -4.70%

7

EBITDA 5071 6084 6092 20.20% 0.10%

Net Profit 4101 4233 3589 -12.50% 15.20%

13
8
Margins(%)

EBITDA 50.00% 59.00 62.00%

%

NPM 40.50% 41.00 36.50%

%

Per Share Data

(Rs.)

EPS 2.5 2.6 2.2 -12.60% -15.20%

Result Highlights

Unitech’s consolidated revenue declined 3% yoy, from Rs.

10.1 bn in

Q2’08 to Rs. 9.8 bn in Q2’09, due to the slowdown in the

construction and

real estate sales. Construction revenue declined 64% yoy,

from Rs. 517.9

mn in Q2’08 to Rs. 186.7 mn in Q2’09. However, revenue

increased 6.9%

yoy in H1’09. We expect revenue to fall at a CAGR of 15.4 %

between

2008 and 2010, due to the liquidity crisis and the slowdown

in demand.

13
9
 In spite of the decline in revenue, the EBIDTA margin

increased

considerably to 62% in Q2’09, from 50% in Q2’08, due to a

drop in cement

and steel prices, resulting in a significant 28.3% drop in the

real estate

construction cost. The margin for H1’09 increased 6.5 pts on a

yoy basis,

from 53.4% in H1’08 to 59.9% in H1’09. We believe that the

margin will

come under pressure due to the expected fall in property

prices.

Unitech’s second quarter net profit declined 12.5% yoy to

Rs. 3.6 bn (Rs. 2.2 per share) in Q2’09, from Rs. 4.1 bn (Rs.

2.5 per share) in Q2’08. Net profit margin declined by 396

bps from 40.5% in Q2’08 to 36.5% in Q2’09. This was mainly

driven by a 69.8% yoy rise in interest expenses, from Rs.0.79

bn in Q2’08 to Rs.1.3 bn in Q2’09. We believe that the net

profit margin will drop further because of the high interest cost

and the shift towards low-margined middle income housing.

Quarterly Q2'08 Q1'09 Q2'09 YOY% QOQ TTM TTM YOY%

Data % ENDED ENDEDQ

14
0
 Q2'08 2'09

( Rs. mn,except per

share data

Revenue

Real 8303 9140 8077 - - 39242 37331 -

Estate 2.70% 11.60 4.90%
%

Construc 518 316 187 -64% - 2338 1739 -

tion 40.90 25.60
% %

Consultin 772 251 990 28.30 294.30 1131 1883 66.50

g % % %

Hospitali 26 31 32 26.70 4.90% 103 132 28.30

ty % %

Electrical 140 206 208 49.10 1.30% 720 790 9.70%

%

Others 377 373 336 - - 792 1294 63.30

10.90 9.90% %
%

Total 10135 10317 9831 44326

EBIT

Real 6049 6049 5257 - - 27249 24769 -

Estate 13.10 13.10 9.10%
% %

Construc 42 42 37 - - 116 156 34.90

tion 10.60 10.60 %
% %

Consultin 251 251 984 292.10 292.10 733 1789 144.10

g % % %

Hospitali 2 2 0 89.50 89.50 10 -4 -

ty % % 135.00
%

Electrical 8 8 -22 NM NM 45 30 -
33.90
%

Others 24 24 7 - - 96 139 44.40

72.40 72.40

14
1
 % %
%

Total 6376 6376 6264 28250 26880

EBIT
Margins

Real 72.90 66.20 65.10 69.40% 66.30%

Estate % % %

Construc 8.00% 13.10 19.90 5.00% 9.00%

tion % %

Consultin 32.50 99.90 99.40 64.80% 95.00%

g % % %

Hospitali 7.50% 6.20% 0.60% 10.00% -2.70%

ty

Electrical 5.60% 3.80% - 6.20% 3.70%

10.40
%

Others 6.40% 6.50% 2.00% 12.20% 10.80%

Outlook

The real estate market is facing a deep-rooted slowdown due

to the

combination of the liquidity crisis and the high interest rates.

Residential prices have declined up to 25% from their peaks in the

last few months, while commercial and retail rentals have

declined nearly 20 % in some major metropolitan areas. Besides,

banks have tightened the credit and reduced the loan-to-value

amount for home loans. Therefore, we expect the real estate

market to respond with reduced demand and a significant price

downswing over the next 12-24 months.

Unitech’s second quarter financial performance was adversely

14
2
affected

due to the liquidty crisis and the slump in real estate

demand. The

Company is highly leveraged with a debt-equity ratio of 2.4x and a

trailing

6-month interest coverage ratio of 5.0. Its debt stood at Rs. 85.5 bn

as of March 31, 2008. The Company has a debt obligation of Rs. 27

bn, due by March 2009 . The recent deal with Telenor, a

Norwegian-based telecom company, to divest a 60% stake in its

telecom venture for Rs 61 bn will act as a small breather, allowing

the Company to partially reduce its debt burden on its balace

sheet.

We believe that in the prevailing low liquidity environment, the

Company may not be able to mobilise funds from commercial

banks as the latter have stopped lending to realty firms due to the

high-risk weightage of the sector.

Therefore, the Company is actively looking to raise debt through

private equity in the current financial year to fund the ongoing

development projects. Further, it is also planning to reduce its

debt burden through the the sale of office space, land, and a

hotel in the next 3-4 months. We expect that the aggressive

capital structure may force it to monetize some of its projects

before they become economically optimal, thereby sacrificing some

returns.

14
3
We believe that the Company’s operating margin will fall from

the present 59.9% due to its strategic shift of focus towards the

low-margined middle income housing (affordable homes) and the

expected fall in property prices. In addition, housing projects in

locations such as Vizag will further pressurize the margin.

However, construction costs are falling due to the decline in

cement and steel prices. We expect these costs to come down

further as commodity prices are decreasing because of the expected

global recession. Hence, the fall in property prices is likely to

offset the gains expected from the lower raw material costs. As

a result, the operating margin is expected to fall from the current

levels.

We have arrived at the NAV per share of Rs. 96, which

incorporates the substantial decline in real estate prices and

a 15% dilution of Unitech’s stake at the project level. We

have used a 17.2% cost of equity to value the Company and

have arrived at a WACC of 15.4%.

Unitech is one the large listed companies that does not

disclose its

quarterly balance sheet and cash flow statement to the investors.

As a

result, I have limited visibility of the Company’s earnings growth

and

current liquidity situation. Considering the weak demand scenario

14
4
 and the limited financial information available, I believe the

stock will trade at a discount to its NAV, which we have

assumed at 25%.

My fair value estimate for the Company is therefore Rs. 46 per

share, which represents a 76.6% upside to the current share price.

Hence, I upgrade our rating on the stock from Hold to Buy.

Year To FY05 FY06 FY07 FY08 FY09 FY10E CAGR(

March E %)

Rs.mn,except per
share data

Net Sales 6452 9266 32883 41404 15.40%

EBITDA 779 1806 20109 23687 23.70%

Net Profit 335 925 12667 16619 30.20%

Margins(%)

EBITDA 12.10 19.50 61.20 57.20 54.00 46.50%

% % % % %

NPM 5.20% 10.00 38.50 40.10 30.70 27.30%

% % % %

Per Share Data (Rs.)

EPS 0.2 0.6 7.8 10.2 5.8 5 30.20%

PER(x) 14.2x 40.7x 62.6x 2.6x 4.5x 5.3x

RATIO ANALYSIS:-

14
5
 SUPPORT AND RESISTANCE LEVEL FOR JUNE MONTH

Market is showing uptrend in the last two weeks and SENSEX is now

at 14500. Unitech share price is also showing uptrend due

to highly correlation with market so for next 1 month Unitech share

price is expected to achieve a new support level of Rs.77 points but

looking at the international market we can say that international

investors are bit optimistic so market can sustain at this high for

some more time.

Domestic News

Reserve Bank of India is expected to relax further Repo rate and

CRR, which can keep market interest for some more time. Inflation

is also under control and it is now at all time Low (As on 15th May

2009) etc.

14
6
“Looking at the above given information we can project

the new Support Level at 77* points and Resistance Level at

107* points for the Second week of June”.

SUPPORT AND RESISTANCE LEVEL FOR THE COMING MONTHS

OF 2009

Beginning of June the news could be favorable but will the same

Support and Resistance Level maintain for the rest of the weeks; our

team have done research on it and made the conclusion that it will

not be maintaining the same levels.

REASONS:

• Market fall is expected because it can’t sustain at this level for

longer time (Market as on 2nd April, 2009).

• As it can be noticed from the 3rd quarter result of 2008 that

the net profit is just 13% of the total sales. So its effect will

definitely be seen in the share price of the company. The

share price of the company can reduce in the coming weeks

due to this negative news.

• This is also one of our prediction for the coming weeks that

the support level of the share price will be at Rs77 and the

resistance level of the share will be at Rs107 due to the

reason that the support and resistance level of the shares in

the past 15 weeks remain at a level below Rs77 and Rs 107.

14
7
 • 4th Quarter Results are expected in the month of April

and it is expected that the result will be better in comparison

to the last quarter. Price of the share can move a little bit

upward but it will remain in the support and resistance level

given above.

• Inflation data is going negative for the market, so it can affect

the share price of the company.

“Looking at the above given information our Team has

projected new Support Level for the week of 3rd and 4th

will be Rs.75 and Resistance level will be Rs.110 points”.

Key Risks :-

• Failure to secure private equity deals in projects may result in

a lack of

funding and could lead to delays in execution. This may also

exert

pressure on funding costs, thereby negatively affecting the

net margins.

• Delays in project completion and a slowdown in residential

demand

due to high interest rates would hurt the Company’s growth

prospects.

SWOT Analysis of Unitech

Strengths
14
8
1. Unitech is the second largest engineering and construction companies

in India with a strong international presence in regions of South Asia, the Asia

Pacific, the Middle East, the Caspian, Africa and the United Kingdom. It has

over 40 subsidiaries spread across the globe who have engaged with over 200

clients implementing over 250 projects in over 40 countries.

2. Unitech has significant experience and very strong track record. Some of its

achievement are as follows

• It has constructed more than 8000 kilometers of pipelines

• It has constructed six million cubic meters of storage tanks and terminal

capacity

• It has executed 12 refinery modernization projects.

• It has executed onshore and offshore pipelines under extreme climatic

condition and difficult terrain including swampy and marshy terrain.

1. Unitech is one of the few companies to have a in-house comprehensive

mechanical, civil and insulation work capability for cryogenic LPG and LNG

tanks and terminals.

2. It provides engineering and construction services in diverse industries as

follows

Oil and gas projects including pipelines, storage tanks and terminals and

process facilities

• Infrastructure projects

• Power plants projects

• Civil construction projects including highways, flyovers, bridges,

elevated railroads, ports, MRTs and LRTs

• Specialty sectors like health care and industrial civil infrastructure

• Plant and facility management projects

14
9
 1. Its core capabilities lie in process and plant engineering, heavy civil

engineering and building.

Weakness

1. Unitech is exposed to uncertain political and economic environments,

government instability and legal systems, law and regulations of 18 different

countries it operates around the world which may be very different from what

is prevailing in India.

2. The company has grown by leaps and bounds in last few years which may

create obstacles to manage growth and reduce profitability and operations.

3. Major projects are subject to pre-qualified based on several criteria like

experience, technology capacity and performance, safe record, financial

strength and size of previous projects. Recently in the energy and petroleum

sector major emphasis on increasing developing larger, more technically

complex projects and awarding to a fully integrated project contractor. Though

contracts are obtained through competitive bidding process but pre-

qualification plays a key role.

4. Unitech ability to qualify only to a certain value and high concentration on

projects with potential high margins may hinder from taking up such large

complex projects.

5. Unitech is entering into a number of new businesses which require significant

expense and financial and operational resources. Its entry into real estate

development in India and providing onshore integrated drilling services in the

oil and gas sector may not prove unprofitable because of limited experience.

Unitech Investment in Pipavav Shipyard is exposed to execution risk since it is

yet to commence commercial operations.

15
0
 6. Due to its presence in pipelines it has helped it to record highest

operating margins in the industry buts increasing level of exposure to road

projects has led to declining margins.

Opportunities

1. High level of investments expected in the existing areas of specialization

2. Has vast international presence in pipeline projects related to oil and gas sector

3. Increase in the level of road investments and BOT road projects will help in

booking more infrastructure orders.

4. Around the world like United States and whole of Europe has opted for 10%

blending of bio-ethanol take place in diesel and petrol within a period of 4 to 5

years. Brazil,

5. Unitech can take up to 100 meter water depth in offshore pipeline. There is a

large opportunity on account of the replacement of the old lines in Bombay

high and south basin sea

Threats

1. International contracts are usually fixed price contract .Therefore business is

exposed to commodity price volatility as a sharp increase in raw material

prices may impact margins

15
1
2. Corporate capital expenditure and infrastructure investments are

interest rate sensitive. Therefore significant increase in interest rate may

reduce the investments

3. Global and domestic hydrocarbon capital expenditure are prone to oil prices.

Any reduction in oil prices may reduce investment in hydrocarbon industry

4. As a major portion of revenue of the company is from outside India. Sharp

fluctuation in currency may impact profitability.

15
2
 CHAPTER 6

CONCLUSION

CONCLUSION

The growing influence of global developments on the Indian

economy was manifest in the surge in capital inflows in 2007-08, a

phenomenon observed earlier in other emerging market economies.

This is a natural concomitant of the robust macroeconomic

fundamentals like high growth, relative stability in prices, healthy

financial sector and high returns on investment. Sometimes, it also

reflects the rigidities in the economy, particularly the interest

differentials.
15
3
The strength, resilience and stability of the country’s external

sector are reflected by various indicators. These include a steady

accretion to reserves, moderate levels of current account deficit,

changing composition of capital inflows, flexibility in exchange

rates, sustainable external debt levels with elongated maturity

profile and an increase in capital inflows.

The current account has followed an inverted “U” shaped pattern

during the period from 2001-02 to 2006-07, rising to a surplus of

over 2 per cent of GDP in 2003-04. Thereafter it has returned close

to its post-1990s reform average, with a current account deficit of

1.2 per cent in 2005-06 and 1.1 per cent of GDP in 2006-07.

For the Educomp solutions Company is likely to post very high

growth rate for a long time. Revenue figures are expected to show a

CAGR of 70% for the period 2009-2011, 35% for the period 2011-

2014 and 20% for the period 2014-2016.

We forecast strong 65% CAGR in Net Profits over FY09-FY11E and

see limited risks to estimates given. EBITDA margins are likely to

improve as revenue share of high margin retail and online

business is likely to improve considerably. We expect ROE to double

and settle in the range between 30-35%.For the Icici Bank NII grew

2% YoY but declined 7% QoQ to Rs19.9b. Loans declined 1% YoY and

4% QoQ to Rs2.1t. The sales have increased by 0.014% in

Q3.Operating profit has decreased on the assumption that either

operating expenses have increased or there is an increase in

15
4
NPA’s.As there is an increase in gross profit & EPS, it shows

that the demand of the share will increase in the future.And for the

Unitech Unitech’s consolidated revenue declined 3% yoy, from

Rs. 10.1 bn in Q2’08 to Rs. 9.8 bn in Q2’09, due to the slowdown

in the construction and real estate sales. Short-term liquidity likely

to improve. Operating margins likely to fall but remain at higher

levels. Huge land bank spread across the country. Strong asset base

offsets short-term liquidity concerns.

Total Income has increased from Rs 14562.20 million for the quarter

ended December 31, 2007 to Rs 18228.70 million for the quarter

ended December 31, 2008.Tata Power will hold 74% equity and

IOCL will hold 26% equity in the proposed Joint Venture Company.

So with this we find that market sentiments and the announcements

effects the share prices of the companies. and equity research helps

to find out the support and resistence level of the share prices and

help us to predict the future prices of the stocks.

15
5
 ANNEXURE

ANNEXURE

EDUCOMP SOLUTIONS

BALANCE SHEET

Educomp In Rs.
Solutions Cr.

15
6
Balance Sheet

Mar '04 Mar '05 Mar '06 Mar '07 Mar '08

Sources Of Funds

Total Share 4.47 4.47 15.96 15.99 17.25

Capital

Equity Share 4.47 4.47 15.96 15.99 17.25

Capital

Share Application 0 0 0 0 0
Money

Preference Share 0 0 0 0 0
Capital

Reserves 12.59 18.92 74.35 98.71 269.57

Revaluation 0 0 0 0 0
Reserves

Networth 17.06 23.39 90.31 114.7 286.82

Secured Loans 2.93 4.37 9.92 17.55 52.3

Unsecured Loans 0 0 0 107.14 314.94

Total Debt 2.93 4.37 9.92 124.69 367.24

19.99 27.76 100.23 239.39 654.06

Total Liabilities

Application Of Funds

Gross Block 18.7 24.62 35.08 93.62 264.53

Less: Accum. 8.86 13.04 18.34 21.82 53.18

Depreciation

Net Block 9.84 11.58 16.74 71.8 211.35

Capital Work in 0.28 2 6.65 7.59 20.08

Progress

Investments 1.1 1.74 1.55 28.11 70.98

Inventories 0.85 1.01 1.74 3.25 1.41

Sundry Debtors 13.15 19.13 25.16 49.35 114.46

Cash and Bank 1.3 3.06 28.6 30.77 54.34

Balance

15
7
Total Current 15.3 23.2 55.5 83.37
Assets 170.21

Loans and 1.69 1.99 6.03 21.93 36.44

Advances

Fixed Deposits 0 0 31.06 64.19 224.69

Total CA, Loans & 16.99 25.19 92.59 169.49 431.34

Advances

Deffered Credit 0 0 0 0 0

Current Liabilities 8.22 12.74 6.63 23.73 70.11

Provisions 0 0 10.75 13.94 9.6

Total CL & 8.22 12.74 17.38 37.67 79.71

Provisions

Net Current 8.77 12.45 75.21 131.82 351.63

Assets

Miscellaneous 0 0 0.08 0.06 0.04

Expenses

19.99 27.77 100.23 239.38 654.08

Total Assets

Contingent 0 0 17.44 17.95 29.24

Liabilities

Book Value (Rs) 38.15 52.3 56.59 71.75 166.31

PROFIT AND LOSS

Educomp In Rs.
Solutions Cr.

Profit & Loss

account

Mar '04 Mar '05 Mar '06 Mar '07 Mar '08

15
8
Income

Sales Turnover 24.75 29.82 52.3 106.57 262.1

Excise Duty 0 0 0 0 0

Net Sales 24.75 29.82 52.3 106.57 262.1

Other Income 1.26 2.29 1.07 5.07 14.8

Stock Adjustments 0 0 0 0 0

Total Income 26.01 32.11 53.37 111.64 276.9

Expenditure

Raw Materials 6.86 3.37 0 0 0

Power & Fuel Cost 0 0 0 0 0

Employee Cost 5.49 6.35 7.5 10.51 25.58

Other 0 0 9.54 30.42 79.73

Manufacturing
Expenses

Selling and Admin 0 0 7.63 12.15 18.83

Expenses

Miscellaneous 6.06 6.74 1.17 2.2 11.62

Expenses

Preoperative Exp 0 0 0 0 0
Capitalised

Total Expenses 18.41 16.46 25.84 55.28 135.76

Operating Profit 6.34 13.36 26.46 51.29 126.34

PBDIT 7.6 15.65 27.53 56.36 141.14

Interest 0.38 0.55 0.71 1.99 5.82

PBDT 7.22 15.1 26.82 54.37 135.32

Depreciation 3.73 4.89 5.31 9.39 32.3

Other Written Off 0 0 0.02 0.02 0.02

Profit Before Tax 3.49 10.21 21.49 44.96 103

Extra-ordinary -0.42 -0.06 -0.02 -0.74 0

items

PBT (Post Extra- 3.07 10.15 21.47 44.22 103

ord Items)

Tax 1.61 3.83 7.57 15.64 32.94

15
9
Reported Net 1.89 6.33 13.92 28.65 70.06
Profit

Total Value 11.55 13.09 25.85 55.28 135.76

Addition

Preference 0 0 0 0 0
Dividend

Equity Dividend 0 0 2.39 3.31 4.32

Corporate 0 0 0.34 0.56 0.73

Dividend Tax

Per share data (annualised)

Shares in issue 44.73 44.73 159.6 159.85 172.47

(lakhs)

Earning Per 4.22 14.15 8.72 17.92 40.62

Share (Rs)

Equity Dividend 0 0 15 20 25
(%)

Book Value (Rs) 38.15 52.3 56.59 71.75 166.31

CASH FLOW STATEMENT

16
0
Educomp Solutions In Rs.
Cr.

Cash Flow

Mar '05 Mar '06 Mar '07 Mar '08

10.16 21.47 44.9 103

Net Profit Before Tax

Net Cash From Operating 8.46 11.24 18.04 68.1

Activities

Net Cash (used in)/from -8.27 -14.61 -88.46 -215.72

Investing Activities

Net Cash (used in)/from 1.09 60.8 109.07 330.66

Financing Activities

Net (decrease)/increase 1.27 57.43 35.3 183.04

In Cash and Cash
Equivalents

Opening Cash & Cash 1.05 2.23 59.66 94.96

Equivalents

Closing Cash & Cash 2.32 59.66 94.96 279.03

Equivalents

16
1
 ICICI BANK

BALANCE SHEET

ICICI Bank In Rs. Cr.

Balance Sheet

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

Capital and Liabilities:

Total Share 1,086.75 1,239.83 1,249.34 1,462.68 1,463.29

Capital

Equity Share 736.75 889.83 899.34 1,112.68 1,113.29

Capital

Share Application 0.02 0 0 0 0

Money

Preference Share 350 350 350 350 350

Capital

Reserves 11,813.20 21,316.16 23,413.92 45,357.53 48,419.73

Revaluation 0 0 0 0 0
Reserves

Net Worth 12,899.97 22,555.99 24,663.26 46,820.21 49,883.02

Deposits 99,818.78 1,65,083. 2,30,510. 2,44,431. 2,18,347.

17 19 05 82

Borrowings 33,544.50 38,521.91 51,256.03 65,648.43 67,323.69

Total Debt 1,33,363. 2,03,605. 2,81,766. 3,10,079. 2,85,671.

28 08 22 48 51

Other Liabilities & 21,396.17 25,227.88 38,228.64 42,895.39 43,746.43

Provisions

Total Liabilities 1,67,659. 2,51,388. 3,44,658. 3,99,795. 3,79,300.

42 95 12 08 96

Assets

Cash & Balances 6,344.90 8,934.37 18,706.88 29,377.53 17,536.33

with RBI

Balance with 6,585.07 8,105.85 18,414.45 8,663.60 12,430.23

Banks, Money at
Call

Advances 91,405.15 1,46,163. 1,95,865. 2,25,616. 2,18,310.

16
2
 11 60 08 85

Investments 50,487.35 71,547.39 91,257.84 1,11,454. 1,03,058.

34 31

Gross Block 5,525.65 5,968.57 6,298.56 7,036.00 7,443.71

Accumulated 1,487.61 1,987.85 2,375.14 2,927.11 3,642.09

Depreciation

Net Block 4,038.04 3,980.72 3,923.42 4,108.89 3,801.62

Capital Work In 96.3 147.94 189.66 0 0

Progress

Other Assets 8,702.59 12,509.57 16,300.26 20,574.63 24,163.62

1,67,659. 2,51,388. 3,44,658. 3,99,795. 3,79,300.

40 95 11 07 96
Total Assets

Contingent 97,507.79 1,19,895. 1,77,054. 3,71,737. 8,03,991.

Liabilities 78 18 36 92

Bills for collection 9,803.67 15,025.21 22,717.23 29,377.55 36,678.71

Book Value (Rs) 170.35 249.55 270.37 417.64 445.17

PROFIT AND LOSS

ICICI Bank In Rs. Cr.

Profit & Loss

account

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

Income

Interest Earned 9,409.89 13,784.5 22,994.29 30,788.3 31,092.55

0 4

Other Income 3,416.23 5,036.62 6,962.95 8,878.85 8,117.76

Total Income 12,826.1 18,821.1 29,957.24 39,667.1 39,210.31

2 2 9

Expenditure

Interest expended 6,570.89 9,597.45 16,358.50 23,484.2 22,725.93

4

Employee Cost 737.41 1,082.29 1,616.75 2,078.90 1,971.70

16
3
Selling and Admin 1,040.49 2,360.72 4,900.67 5,834.95
Expenses 5,977.72

Depreciation 590.36 623.79 544.78 578.35 678.6

Miscellaneous 1,881.77 2,616.78 3,426.32 3,533.03 4,098.22

Expenses

Preoperative Exp 0 0 0 0 0
Capitalised

Operating Expenses 3,177.78 5,274.23 8,849.86 10,855.1 10,795.14

8

Provisions & 1,072.25 1,409.35 1,638.66 1,170.05 1,931.10

Contingencies

10,820.9 16,281.0 26,847.02 35,509.4 35,452.17

2 3 7
Total Expenses

2,005.20 2,540.07 3,110.22 4,157.73 3,758.13

Net Profit for the

Year

Extraordionary 0 0 0 0 -0.58
Items

Profit brought 53.09 188.22 293.44 998.27 2,436.32

forward

Total 2,058.29 2,728.29 3,403.66 5,156.00 6,193.87

Preference Dividend 0 0 0 0 0

Equity Dividend 632.96 759.33 901.17 1,227.70 1,224.58

Corporate Dividend 90.1 106.5 153.1 149.67 151.21

Tax

Per share data (annualised)

Earning Per Share 27.22 28.55 34.59 37.37 33.78

(Rs)

Equity Dividend (%) 85 85 100 110 110

Book Value (Rs) 170.35 249.55 270.37 417.64 445.17

Appropriations

Transfer to Statutory 547 248.69 1,351.12 1,342.31 2,008.42

Reserves

Transfer to Other 600.01 1,320.34 0 0.01 0.01

Reserves

16
4
Proposed 723.06 865.83 1,054.27 1,377.37
Dividend/Transfer to 1,375.79
Govt

Balance c/f to 188.22 293.44 998.27 2,436.32 2,809.65

Balance Sheet

Total 2,058.29 2,728.30 3,403.66 5,156.01 6,193.87

CASH FLOW STATEMENT

ICICI Bank In Rs. Cr.

Cash Flow

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

2527.2 3096.61 3648.04 5056.1 5116.97

Net Profit Before

Tax

Net Cash From 9131.72 4652.93 23061.95 - -14188.49

Operating Activities 11631.15

Net Cash (used -3445.24 -7893.98 - - 3857.88

in)/from 18362.67 17561.11

Investing Activities

Net Cash (used -1227.13 7350.9 15414.58 29964.82 1625.36

in)/from Financing
Activities

Net 4459.34 4110.25 20081.1 683.55 -8074.57

(decrease)/increase
In Cash and Cash
Equivalents

Opening Cash & 8470.63 12929.97 17040.22 37357.58 38041.13

Cash Equivalents

Closing Cash & Cash 12929.97 17040.22 37121.32 38041.13 29966.56

Equivalents

UNITECH
16
5
BALANCE SHEET

Top of Form

Bottom of Form

Unitech

Balance Sheet In Rs. Cr.

Mar '04 Mar '05 Mar '06 Mar '07 Mar '08

Sources Of Funds

Total Share 12.49 12.49 12.49 162.34 324.68

Capital

Equity Share 12.49 12.49 12.49 162.34 324.68

Capital

Share Application 0 0 0 0 0
Money

Preference Share 0 0 0 0 0
Capital

Reserves 138.2 161.42 212.05 998.66 1,819.14

Revaluation 0 0 0 0 0
Reserves

Networth 150.69 173.91 224.54 1,161.00 2,143.82

Secured Loans 60.32 280.19 632.57 2,839.67 5,506.45

Unsecured Loans 71.33 43.63 54.2 765.39 2,611.08

Total Debt 131.65 323.82 686.77 3,605.06 8,117.53

Total Liabilities 282.34 497.73 911.31 4,766.06 10,261.35

Application Of Funds

Gross Block 41.34 50.86 83.17 99.87 132.05

Less: Accum. 23.55 25.51 28.44 30.24 35.96

Depreciation

Net Block 17.79 25.35 54.73 69.63 96.09

Capital Work in 622.09 1,106.14 1,824.66 4,408.59 7,083.41

Progress

Investments 83.39 166.57 282.39 518.93 1,397.99

Inventories 26.66 29.3 32.26 32.77 13.66

16
6
Sundry Debtors 61.92 57.14 76.54 97.55
739.74

Cash and Bank 26.65 56.56 74.73 128.62 236.01

Balance

Total Current 115.23 143 183.53 258.94 989.41

Assets

Loans and 168.5 310.77 866.97 3,090.88 7,624.58

Advances

Fixed Deposits 57.31 138.32 85.9 667.19 135.17

Total CA, Loans & 341.04 592.09 1,136.40 4,017.01 8,749.16

Advances

Deffered Credit 0 0 0 0 0

Current Liabilities 770.19 1,364.74 2,314.33 3,798.30 6,316.27

Provisions 11.79 27.68 72.55 449.8 749.03

Total CL & 781.98 1,392.42 2,386.88 4,248.10 7,065.30

Provisions

Net Current -440.94 -800.33 -1,250.48 -231.09 1,683.86

Assets

Miscellaneous 0 0 0 0 0
Expenses

Total Assets 282.33 497.73 911.3 4,766.06 10,261.35

59.87 376.88 434.87 1,640.51 2,325.69

Contingent
Liabilities

Book Value (Rs) 120.67 139.27 179.81 14.3 13.21

PROFIT AND LOSS

16
7
Unitech In Rs.
Cr.

Profit & Loss

account

Mar '04 Mar '05 Mar '06 Mar '07 Mar '08

Income

Sales Turnover 373.95 509.33 653.13 2,441.74 2,486.79

Excise Duty 0 0 0 0 0

Net Sales 373.95 509.33 653.13 2,441.74 2,486.79

Other Income 6.19 17.86 21.52 155.38 482.36

Stock 7.27 2.65 4.38 1.57 -19.11

Adjustments

Total Income 387.41 529.84 679.03 2,598.69 2,950.04

Expenditure

Raw Materials 27.41 58.33 65.45 80.53 26.46

Power & Fuel 0 0 0 0 0

Cost

Employee Cost 10.38 15.95 31.11 65.62 98.43

Other 298.87 359.62 396.1 853.98 981.25

Manufacturing
Expenses

Selling and 14.81 22.6 30.84 38.06 52.7

Admin Expenses

Miscellaneous 4.21 5.9 7.17 15.55 23.7

Expenses

Preoperative Exp 0 0 0 0 0
Capitalised

355.68 462.4 530.67 1,053.74 1,182.54

Total Expenses

Operating Profit 25.54 49.58 126.84 1,389.57 1,285.14

PBDIT 31.73 67.44 148.36 1,544.95 1,767.50

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Interest 9.54 21.92 37.14 193.71
393.38

PBDT 22.19 45.52 111.22 1,351.24 1,374.12

Depreciation 1.69 2.14 3.1 4.54 8.58

Other Written Off 0 0 0 0 0

Profit Before Tax 20.5 43.38 108.12 1,346.70 1,365.54

Extra-ordinary 2.5 -1.05 -0.51 0.44 -0.38

items

PBT (Post Extra- 23 42.33 107.61 1,347.14 1,365.16

ord Items)

Tax 6.46 13.46 38.48 361.27 334.83

Reported Net 14.07 29.92 69.64 983.56 1,030.68

Profit

Total Value 328.26 404.07 465.22 973.2 1,156.09

Addition

Preference 0 0 0 0 0
Dividend

Equity Dividend 3.75 5 16.23 40.58 40.58

Corporate 0.48 0.65 2.28 6.9 6.9

Dividend Tax

Per share data (annualised)

Shares in issue 124.88 124.88 124.88 8,116.88 16,233.75

(lakhs)

Earning Per 11.27 23.96 55.77 12.12 6.35

Share (Rs)

Equity Dividend 30 40 10 25 12.5

(%)

Book Value (Rs) 120.67 139.27 179.81 14.3 13.21

CASH FLOW STATEMENT

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Unitech In Rs
Cr.

Cash Flow

Mar '04 Mar '05 Mar '06 Mar '07 Mar '08

Net Profit Before 20.84 43.37 108.13 1344.83 1365.51

Tax

Net Cash From 60.35 87.66 -260.46 -1755.68 -3686.44

Operating Activities

Net Cash (used -26.08 -93.24 -121.05 -117.32 -771.21

in)/from

Investing Activities

Net Cash (used -0.04 116.5 347.25 2508.19 4033.01

in)/from Financing
Activities

Net 34.23 110.92 -34.26 635.19 -424.64

(decrease)/increase
In Cash and Cash
Equivalents

Opening Cash & 49.73 83.96 194.89 160.63 795.82

Cash Equivalents

Closing Cash & 83.96 194.89 160.63 795.82 371.18

Cash Equivalents

BIBLIOGRAPHY

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The books referred for the project work are:

Books

• Agarwal J.D., “Securities Analysis & Portfolio Management”

• Agarwal J.D., “Advance Financials Risk Analysis”

• Agarwal, J.D., “Readings for Financial Management”; IIF

Publication.

• Brigham & Erhardt’s “Corporate Finance”, Thomson Publishers

Websites

• www.economictimes.com

• www.fmc.gov.in

• www.rbi.gov.in

• www.sebi.gov.in

• www.moneycontrol.com

• www.nseindia.com

• www.bseindia.com

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