A STUDY ON

STOCK MARKET PERFORMANCE OF SELECTED IT COMPANIES IN INDIA,

AT TRUSTLINE IN TIRUPATI, CHITTOOR (DT)

A PROJECT REPORT

Submitted in partial fulfillment of the

Requirement for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted by
P.ChinnaRamana
(Reg.No. ABS12020)

Under the guidance of

Mr.T.Swathanthra Babu
M.A.,MBA, (Phd).
HEAD OF THE DEPARTMENT

DEPARTMENT OF MANAGEMENT STUDIES

ACCORD BUSINESS SCHOOL

(Affiliated to Sri Venkateswara University, TIRUPATI and Approved by AICTE)
Chiguruwada Road, TIRUPATI -517507
CHITTOOR(DIST), A.P.INDIA

2011-2013

1
 ACCORD BUSINESS SCHOOL
(Affiliated to S.V. University, TIRUPATI and Approved by AICTE)
Chiguruwada Road, TIRUPATI-517507

CERTIFICATE

This is to certify that the project work entitled “A STUDY ON STOCK MARKET
PERFORMANCE OF SELECTED IT COMPANIES IN INDIA,AT TRUSTLINE IN

TIRUPATI.” is bonafide work done and submitted by Mr.P.CHINNARAMANA, (Reg.No:

ABS12020) in partial fulfillment of the requirement for the award of the degree of MASTER
OFBUSINESS ADMINISTRATION by the ACCORD BUSINESS SCHOOL, affiliated to S.V.
University, TIRUPATI during 2011-2013.

HEAD OF THE DEPARTMENT UNDER THE GUIDANCE

OF

, Mr.T.Swathantra Babu Mr.T.Swathantra Babu

MBA, M. Phil,(Ph.D) M.A. MBA.,,(Ph.D).

Head of the Department

JBIPGC – TIRUPATI JBIPGC - TIRUPATI

2
 DECLARATION

I here by declare that the Project Work entitled “A STUDY ON STOCK MARKET
PERFORMANCE OF SELECTED IT COMPANIES IN INDIA,AT TRUSTLINE IN

TIRUPATI.” is original and bonafide work of my own for the partial fulfillment of the requirement
for the award of the Degree of MASTER OF BUSINESS ADMINISTRATION and submitted to
S.V. University, Tirupati, under the guidance of Mr.T.SWATHANTRA BABU Department of
Management Studies, ACCORD BUSINESS SCHOOL, Tirupati and it has not submitted to any
other University or Institute. The empirical conclusions and findings on this report are based on the
information collected by me.

Place: Tirupati (P.CHINNARAMANA)

DATE: (Reg.No. ABS12020))

3
 ACKNOWLEDGEMENT

It is a pleasure to acknowledge the kind of help and suggestions given by the persons
mentioned below during my project work.

I express my sincere gratitude to TRUST LINE For granting permission to undergo the
project works in the company.

I express my sincere thanks to Mr.K.NAGARAJU, Principal ACCORD BUSINESS

SCHOOL of post graduation. Tirupati, granting me to complete the project.

I am sincerely grateful to Mr.T.SWATHANTRA BABU , MBA, M.Phil.,(Ph.D) Associate

professor our Head of department JB institute of Post graduation course, Tirupati for granting me his
permission to undergo my project training.

It is a great pleasure for me to expresses my gratitude to my project guide

Mr.T.SWATHANTRA BABU, MBA.,(Ph.D) associate professor, department of management
studies, JBIPGC Tirupati for her valuable guidance.

I express my gratitude towards MR.K.LOKESH (BRANCH MANAGER ) , TRUST

LINESECURITIES LTDTirupati who guided & encouraged in the completion of my project in
their estimated organization.

I am also thankful to my management, faculty, family members and friends who directly or
indirectly helped me in completing this project.

(P.CHINNARAMANA)

4
 CONTENTS

CHAPTERS TITLE Page No.

EXECUTIVE SUMARY 6

CHAPTER-I Introduction

Industry Profile 11

Company Profile

CHAPTER-II REVIEW OF LITERATURE 35

CHAPTER-III RESEARCH METHODOLOGY

38
Need for the study

Objectives of the study

Sources of data

Tools used for analysis

Scope of the study

Limitations of the study

CHAPTER-IV DATA ANALYSIS & INERPRETATION 41

CHAPTER-V FINDINGS, SUGGESTIONS & CONCLUSION 62

ANNEXURE-I 63
BIBLIOGRAPHY

5
EXECUTIVE
SUMMARY
 A STUDY ON
STOCK MARKET PERFORMANCE OF SELECTED IT COMPANIES IN INDIA, AT
TRUSTLINE, IN TIRUPATI, CHITTOOR (DT)

P.CHINNARAMANA

MBA 3RD SEM

ACCORD BUSINESS
SCHOOL

INTRODUCTION:

Financial markets are helpful to provide liquidity in the system and for smooth
functioning of the system. These markets are the centers that provide facilities for buying and
selling of financial claims and services. The financial markets match the demands of
investment with the supply of capital from various sources. Based on the maturity of claim
financial market is classified into two types:

They are: 1.Money markets (short-term)

2.Capital markets (long-term)

INDUSTRY PROFILE:

A capital market is a market for securities where business enterprises can raise long
term funds . It is defined as market in which money is provided for periods longer than a year
as the raising of short term funds takes place on another markets ( i.e. the money market )

Company profile:
 Trust line securities limited “is a stock brokerised company, , established in 1989, 

 The code of this organization “ISO 9001:2008” 

 Dr. Muksesh Kansal , Chairman and Managing Director of the trust line and Mrs.
Sarika Kansal , Director of the trust line ,are the promoters of the trust line 

 Trust line head office is located in Noida, New Delhi. 

 In 21 years they have 80 own branches, 430 business associates, 510 total
locations, 1000 human assets, 1200 trading terminals, 70000 clients, and 80000
d’ mat accounts through out in our India. 

7
Products of Trust line:
Trust line securities limited has introduced severalProducts to the customers with
an advanced technology

The products are as followos

 Equity and derivative 


 Commodities trading 

 Currency trading 

 Depository services 

 Research and analysis 

 Mutual funds, insurance 

 Institutional channels 

 Investment advisory services 

 Real estate services. 

Technology:
Trust line securities limited does compromise in technology investment compares to other
firms we have a great and marvelous technology like

 Latest firewalls to secure network 


 WIFI enabled office and other location 

 ISDN backup 

 Top end routers and switches 

 24 hrs power backup 

 FTP to download data and branches 

 VSAT network 

 Radio frequency for standard by arrangement 

 Sophisticated research software 

 Client support through remote central excellent back office software 

8
OBJECTIVE OF THE STUDY:

 To study the movement of equity share prices of HCL Technologies,Oracle

financial services software and Tech Mahindra during 2009-2012. 

  To understand the ONLINE TRADING system and it’s process at TRUSTLINE 
SECURITIES LTD 

 To suggest retail investor about the concept of fundamental analysis of shares –
the safest approach for investing in stock market 

SOURCE OF DATA
 Secondary data collection from the following 

• Newspapers

• Books

• Internet

• BSE data

• NSE data

• GOVT reports(SEBI)

 Primary data collected ,by watching daily price updates in market from 21st MAY
2012 to 10th JULY 2012. 

 Experts opinion from marketing. 

SCOPE OF THE STUDY:

This study cover introduction to capital market and trading to serve as basic
material for capital market operations and share value comparision of the mentioned 3
companies above

Need of the Study:

The need of the study is to provide the techniques and planning in today’s
investment environment. Apart from this , keenly understanding and analysing all issues
that are emerged in software industry .

9
LIMITATIONS OF THE STUDY

 The company has large clients but limited analysts, which limited the amount of
time that they could spend with us to provide the required data.So,that the
aspired analysing could not take place. 

 The two months time period was a limitation to do an extensive study of the IT
sector stocks' performance. 

 Study may not cover the entire IT INDUSTRY performance 

FINDINGS:
The returns are declining and risks are climbing up in 3 companies

Global economic downturn became the major reason for declining of returns
and increasing of risks

Of the 3 companies , HCL technologies is considered as fundamentally

strongfinancial company for investing , eventhough there is a decline in the
returns. This can be understood by observing the average returns and risks
compared to other two companies

Suggestions
1. From technical analysis, it is seen seen that average returns of the IT sector had
performed better than market so, we suggested investors to invest in IT sector
when all the market conditions are stable.

2. It is Suggested to investor to invest in HCL TECHNOLOGIES because of

average high returns when compared to other two companies

3. It is suggested to investors to analyze fundamental factors before investing in

the companies.

Conclusion
HCL TECHNOLOGIES is the best performance stock in the IT sector followed By Tech
Mahindra in the present study,both performed better than Oracle Finance Service Software
these two companies have a positive correlation when compared to NIFTY movement.The
investors have to consider the fundamental factors such as Economy, Industry and Company
Status before investing.It is also good for investors if they buy shares(by considering the real
value)when the market is bearish to reap good returns

10
 Chapter – 1
Indroduction
Industry Profile
&
Company Profile

11
12
 INTRODUCTION
Stock Market

A stock market is a primarily a virtual exchange of securities (that is, shares and debentures,
which companies use as a means of raising finance) and derivatives (i.e. virtual instruments such as
contracts that relate to assets and securities and can be traded). It is virtual in the sense that the
market is an intangible concept, rather than a physical place, and as a result of advancing
technologies traders can now get involved with little more than a laptop or mobile phone. The
market brings together a range of traders of all shapes and sizes - from small, one-man bands trading
for their own personal gains through to hedge funds managing billions in assets, and everything in
between.

Stock markets list the securities of publicly traded companies, identified in the UK by the
appendage 'plc'. As distinct from a regular limited company ('Ltd.'), plc's offer their shares to the
public at large, who are generally concerned with trading on the price point of a given share rather
than its yield. Shares can change hands several times on a daily basis, and at insignificant levels the
company is unconcerned with who owns those shares.

Shares themselves are intangible assets, entitling the bearer to an annual payment known as a
'dividend', paid out of distributable profits, and often corresponding voting rights in proportion to the
size of the share held at the AGM, where major strategic decisions such as electing the board are put
to the vote. The bearer of a share at any given point is in effect a part owner of the business to which
those shares pertain, and it is this aspect that gives a share any underlying value.

The price of a share at any given stage is dictated by supply and demand within the market,
and rises or falls every time a share is bought or sold. This effectively means that shares are priced
by the collective will and attitudes of the market, comprised of all the traders and investment houses
that actively trade in those securities.

Traders buy shares when they feel they are underpriced relative to future company
performance, and sell shares when the detect overpricing, or when they feel the market has yet to
take account of a particular factor playing in to the value of a share, such as company performance
or some external but related factor that could impact on the success of the company. In most cases,

13
transactions are instantaneous, even when there is no corresponding buyer/seller to counteract a
buy/sell order, because of the role of 'market makers' - usually large funds such operated by
insurance firms, banks and pension providers which offer to 'make' the market in the absence of a
second party to any trade, to allow the markets to run fluidly at all times.

Stock markets generally trade over a set duration of hours, usually reflecting the working day
in their particular region, allowing the zealous trader to trade different markets round the clock -
from London to New York to Tokyo - while affording those companies so listed to raise capital in
the form of initial share issues to the market. As a result, the markets operate on a slick basis almost
around the clock, bringing together buyers and sellers of securities and giving businesses and
governments a free, unadulterated bellwether for the economic and commercial outlook of a given
sector, industry or economy.

In essence, that's the foundation of what a stock market is, and it's by no means a
comprehensive study. Getting to know the markets requires lengthy research and an understanding
of business, economics, law and politics. Yet for those that do get to grips with how the markets
operate, the allure of trading profits is sufficient rewards for all their hard work.

A clear starting point for any would-be trader, most people have a rough idea or
preconception of what they think a stock market is and how it works. Unfortunately, the answer to
this simple question is rather complicated, and can't readily be summed up in one sentence. Indeed,
many traders may be hard pushed to articulate exactly what a stock market is and the purpose it
serves, even after years of serious trading. In this article, we're going to attempt to clear up the
ambiguity, and offer a direct and succinct answer to this most foundational of trading questions.

Most people understand that a stock market is a place where shares are bought and sold, and
in essence this is true. Most people understand a stock market is dominated by traders who speculate
on the price of shares to make a profit on the difference between the buying and selling price, and in
essence this is true. But a stock is so much more in-depth than these two basic propositions would
suggest, and requires some deeper analysis to get to the bottom of what's really going on.

14
 INDUSTRY PROFILE

The securities contract (Regulation) Act, 1956 (SCRA) defines „Stock Exchange‟ as any
body of individuals, whether incorporated or not, constituted for the purpose of assisting, regulating
or controlling the business of buying, selling or dealing in securities. Stock exchange could be a
regional stock exchange whose area of operation/jurisdiction is specified at the time of its
recognition or national exchanges, which are permitted to have nationwide trading since inception.
NSE was incorporation as National Stock Exchange.

Securities trading corporation of India Ltd. (STCI):

Securities trading corporation of India Ltd (STCI) was established byReserve bank of India
(RBI) in may 1994, jointly with public sector banks and all India financial institutions with objective
of fostering the development of an active secondary market for government securities and bond
issued by public sector undertakings, FI‟s, Corporate etc.

STCI commended business operations in June 1994 and started dealing in government
securities. On the introduction of the system of primary dealership in government securities, in
February 1996, STCI became one of the first two institutions to be accredited by RBI as a primary
dealer in government securities. The company is registered as Non-Banking Financial Company
with Reserve Bank of India and is classified as an Investment Company. Government of India have
notified STCI as an Approved Finance Institution” for the purpose of Sections 18 and 24 of the

Banking Regulations Act, 1949 and Section 42 (1) of the Reserve Bank of India Act, 1934.

STCI‟s core activities comprise participation, underwriting, market making and trading in

Government securities. The company has established a name for itself in the Indian government
securities market and has emerged as one of the leading primary dealer over the period of time. STCI
enjoys liquidity support through a refinance facility from RBI and also has access to a liquidity
adjustment facility (LAF) from RBI. Apart from the above, the company is an active partner in the
inter bank call money markets and Repo market.

STCI after strongly establishing its footings in the Government Securities Market has
progressively moved into other segments of the fixed income securities markets. The company has
become of the dominant players in the Corporate Bond Market. It participate in the primary issues of

15
bonds of All India Finance Institutions (FI‟s), Public Sector Undertakings and Corporate; and

actively deals in the secondary market. The Company has also moved into the debt derivatives
market by becoming an active market maker in interest rate swaps. In order to diversify the risk
concentration from the fixed income securities market, the company has recently started providing
portfolio management services, trading in the equities market on proprietary account

STCI Commodities Ltd:

STCI Commodities Limited is the wholly owned subsidiary of UTI Securities Ltd. STCI
Commodities Limited was incorporated on September 20, 2004.STCI Commodities Limited has
membership on Multi Commodity Exchange of India Limited (MCX) and National Commodity and
Derivatives Exchange Limited (NCDEX).

FINANCIAL MARKET:

Financial market are helpful to provide liquidity in the system and for smooth functioning of
the system. These markets are the centers that provide facilities for buying and selling of financial
claims and services. The financial markets match the demands of investment with the supply of
capital from various sources.

According to institutional basis again classified into two types:

They are:

1. Money markets (short-term)

2. Capital markets (long-term)

MONEY MARKET:

Money market is a place where we can raise short-term capital.

Again the money market is classified into

 Inter bank call money market 


 Bill market and 

 Bank loan market Etc. 

E.g., treasury bills, commercial papers, CD‟s etc 

16
CAPITAL MARKET:

Capital market is a place where we can raise long-term capital.

Again the capital market is classified into two types and they are

 Primary market and 


 Secondary market. 

E.g: Shares, Debentures, and Loans etc. 

PRIMARY MARKET:

Primary market is generally referred to the market of new issues or market for mobilization
of resources by the companies and government undertakings, for new projects as also for expansion,
modernization, addition, and diversification and up gradation. Primary market is also referred to as
New Issue Market. Primary market operations include new issues of shares by new and existing
companies, further and right issues to existing shareholders, public offers, and issue of debt
instruments such as debentures, bonds, etc.

The primary market is regulated by the Securities and Exchange Board of India (SEBI a government
regulated authority).

FUNCTIONS:

The main services of the primary market are origination, underwriting, and distribution.
Origination deals with the origin of the new issue. Underwriting contract make the shares predictable
and remove the element of uncertainty in the subscription. Distribution refers to the sale of securities
to the investors.

The following are the market intermediaries associated with the market:

1. Merchant banker/book building lead manager

2. Registrar and transfer agent
3. Underwriter/broker to the issue
4. Adviser to the issue

17
 5. Banker to the issue
6. Depository
7. Depository participant.

Investor’s protection in the primary market:

To ensure healthy growth of primary market, the investing public should be protected. The
term investor protection has a wider meaning in the primary market. The principal ingredients of
investor‟s protection are:

 Provision of all the relevant information 


 Provision of accurate information and
Transparent allotment procedures without any bias. 

SECONDARY MARKET:

The primary market deals with the new issues of securities. Outstanding securities are traded in the
secondary market, which is commonly known as stock market or stock exchange. “The secondary market is a
market where scrip‟s are traded”. It is a market place which provides liquidity to the scrip‟s issued in the
primary market. Thus, the growth of secondary market depends on the

primary market. More the number of companies entering the primary market, the greater re the
volume of trade at the secondary market. Trading activities in the secondary market are done through
the recognized stock exchanges which are 23 in number including Over The Counter Exchange of
India (OTCE), National Stock Exchange of India and Interconnected Stock Exchange of India.

Secondary market operations involve buying and selling of securities on the stock exchange
through its members. The companies hitting the primary market are mandatory to list their shares on
one or more stock exchanges in India. Listing of scrip‟s provides liquidity and offers an opportunity

to the investors to buy or sell the script‟s.

The following are the intermediaries in the secondary market:

1. Broker/member of stock exchange-buyers broker and sellers broker

2. Portfolio manager
3. Investment advisor
4. Share transfer agent
18
 5. Depository
6. Depository participants.

STOCK MARKETS IN INDIA:

Stock exchanges are the perfect type of market for securities whether of government and
semi-govt bodies or other public bodies as also for shares and debentures issued by the joint-stock
companies. In the stock market, purchases and sales of shares are affected in conditions of free
competition. Government securities are traded outside the trading ring in the form of over the
counter sales or purchase. The bargains that are struck in the trading ring by the members of the
stock exchanges are at the fairest prices determined by the basic laws of supply and demand.

Definition of a stock exchange:

“Stock exchange means anybody or individuals whether incorporated or not, constituted for
the purpose of assisting, regulating or controlling the business of buying, selling or dealing in
securities.” The securities include:

 Shares of public company. 


 Government securities 

 Bonds. 

HISTORY OF STOCK EXCHANGES:

There were only two stock exchanges operating in the 19th century. One of them was in
Mumbai setup in 1875 and the other was in Ahmedabad set up in 1894. These were organized as
voluntary non-profit-marking associations of brokers to regulate and protect their interests. Before
the control on securities under the constitution in 1950, it was a state subject and the Bombay
securities contracts (control) act of 1925 was used to regulate trading in securities. Under this act, the
Mumbai stock exchange was recognized in 1927 and Ahmedabad Stock Exchange in 1937. During
the war boom, a number of stock exchanges were organized. Soon after it became a central subject,
central legislation was proposed and a committee headed by A.D.Gorwala look into the bill for

19
securities regulation. On the basis of the committee‟s recommendations and public discussion, the

securities contract (regulation) act became law in 1956.

FUNCTIONS OF STOCK EXCHANGES:

Stock exchanges provide liquidity to the listed companies. By giving quotations to the listed
companies, they help trading and raising funds from the market. Over the hundred and twenty years during
which the stock exchanges have existed in this country and through their medium, the central and state
governments have raised crores of rupees by floating public loans. Municipal corporations, trusts and local
bodies have met their financial requirements from the public. The industry, trade and commerce is the
backbone of the country‟s economy. For this capital in crores of rupees is required.

It is obtained through the issue of stocks, shares and debentures for financing day-to-day activities,
organizing new ventures and completing projects of expansion, diversifications and modernization.

Various Stock Exchanges in India:At present there are 23 stock exchanges recognized under the
securities contracts (regulation), Act, 1956. Those are:

 Ahmadabad Stock Exchange Association Ltd.

Bangalore Stock Exchange 

 Bhubaneswar Stock Exchange Association 

 Calcutta Stock Exchange 

 Coimbatore Stock Exchange 

 Delhi Stock Exchange Association 

 Guwahati Stock Exchange Ltd. 

 Hyderabad Stock Exchange Ltd. 

 Jaipur Stock Exchange Ltd 

 Kanara Stock Exchange Ltd. 

 Ludhiana Stock Exchange Association Ltd 

 Madras Stock Exchange 

 Madhya Pradesh Stock Exchange Ltd 

20
  Magadh Stock Exchange Limited 

 Meerut Stock Exchange Ltd. 

 Mumbai Stock Exchange 

 National Stock Exchange of India 

 OTC Exchange of India 

 Pune Stock Exchange Ltd. 

 Saurashtra Kutch Stock Exchange Ltd. 

 Uttar Pradesh Stock Exchange Association 

 Vadodara Stock Exchange Ltd. 

Among these the following are the major stock exchanges:

NSE:

The National Stock Exchange of India Limited has genesis in the report of the High Powered
Study Group on Establishment of New Stock Exchanges, which recommended promotion of a
National Stock Exchange by financial institutions (FI‟s) to provide access to investors from all

across the country on an equal footing. Based on the recommendations, NSE was promoted by
leading Financial Institutions at the behest of the Government of India and was incorporated in
November 1992 as a tax-paying company unlike other stock exchanges in the country. On its
recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993,
NSE commended operations in the Wholesale Debt Market (WDM) segment in June 1994. The
Capital Market (Equities) segment commenced operations in November 1994 and operations in
Derivatives segment commenced in June 2000.

The standards set by NSE in terms of market practices and technology, have become industry
benchmarks and are being emulated by other market participants. NSE is more than a mere market
facilitator. It‟s that force which is guiding the industry towards new horizons and greater
opportunities

BSE:

The Stock Exchange, Mumbai, popularly known as “BSE” was established in 1875 as “The Native Share and
Stock Brokers Association”. It is the oldest one in Asia, even older than the Tokyo

Stock Exchange, which was established in 1878. It is a voluntary non-profit making Association of
Persons (AOP) and is currently engaged in the process of converting itself into demutualised and
corporate entity. It has evolved over the years into its present status as the premier Stock Exchange

21
in the country. It is the first Stock Exchange in the Country to have obtained permanent recognition
in 1956 from w the Govt. of India under the Securities Contracts (Regulation) Act 1956. The
Exchange, while providing an efficient and transparent market for trading in securities, debt and
derivatives upholds the interests of the investors and ensures redressal of their grievances whether
against the companies or its own member-brokers. It also strives to educate and enlighten the
investors by conducting investor education programmers and making available to them necessary
informative inputs.

A Governing Board having 20 directors is the apex body, which decides the policies and
regulates the affairs of the Exchange. The Governing Board consists of 9 elected directors, who are
from the broking community (one third of them retire ever year by rotation), three SEBI nominees,
six public representatives and an Executive Director & Chief Executive Officer and a Chief
Operating Officer.

The Executive Director as the Chief Executive Officer is responsible for the day-to-day
administration of the Exchange and the Chief Operating Officer and other Heads of Department
assist him.

The Exchange has inserted new Rule No. 126 A in its Rules, Byelaws pertaining to constitution of
the Executive Committee of the Exchange. Accordingly, an Executive Committee, consisting of
three elected directors, three SEBI nominees or public representatives, Executive Director & CEO
and Chief Operating Officer has been constituted. The Committee Consider judicial & quasi matters
in which the Governing Board has powers as an Appellate Authority, matters regarding annulment
of transactions, admission, continuance and suspension of member-brokers, declaration of a
member-broker as defaulter, norms, procedures and other matters relating to arbitration, fees,
deposits, margins and other monies payable by the member-brokers to the Exchange, etc aree settled
by it.

REGULATORY FRAME WORK OF STOCK EXCHANGE:

A comprehensive legal framework was provided by the “Securities Contract Regulation Act,
1956 “Securities Exchange Board of India 1952”. Three tier regulatory structure comprising.

 Ministry of finance 

 The Securities And Exchange Board of India 

 Governing body. 
MEMBERS OF THE STOCK EXCHANGE:

22
 The securities contract regulation act 1956 has provided uniform regulation for the admission
of members in the stock exchanges. The qualifications for becoming a member of a recognized stock
exchange are given below:

 The minimum age prescribed for the members is 21 years. 


 He should be an Indian citizen 

 He should be neither a bankrupt nor a compound with the creditors 

 He should not be convicted for fraud or dishonesty. 

 He should not be engaged in any other business connected with a company. 

 He should not be a defaulter of any other stock exchange. 

 The minimum required education is a pass in 12th standard examination. 

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

The securities and exchange board of India was constituted in 1988 under a resolution of
government of India. It was later made statutory body by the SEBI act 1992. According to this act,
the SEBI shall constitute of a chairman and four other members appointed by the central
government.

With the coming into effect of the securities and exchange board of India act, 1992, some of the
powers and functions exercised by the central government, in respect of the regulation of stock
exchange were transferred to the SEBI.

OBEJCTIVES AND FUNCTIONS OF SEBI

 To protect the interest of investors in securities. 


 Regulating the business in stock exchanges and any other securities market. 

 Registering and regulating the working of intermediaries associated with securities market as
well as working of mutual funds. 

 Promoting and regulating self – regulatory organizations. 

 Prohibiting insider trading in securities. 

 Regulating substantial acquision of shares and take over of companies. 

 Performing such functions and exercising such powers under the provisions of capital issues 
(control) act, 1947 and the securities to it by the central government.
23
  It tries to develop the securities market. 

 Promotes Investors Interest. 

 Makes rules and regulations for the securities market. 

History

The Securities and Exchange Board of India Act, 1992 (the SEBI Act) was amended in the years
1995, 1999 and 2002 to meet the requirements of changing needs of the securities market and
responding to the development in the securities market.

Based on the Report of Joint Parliamentary Committee (JPC) dated December 2, 2002 , the SEBI
Act was amended to address certain shortcomings in its provisions. The mission of SEBI is to make
India as one of the best securities market of the world and SEBI as one of the most respected
regulator in the world. SEBI also endeavors to achieve the standards of IOSCO/FSAP.

In this background, the internal group constituted by SEBI consisting of its senior officers had
proposed certain amendments to the SEBI Act. The SEBI Board had constituted an Expert Group
under the Chairmanship of Mr. Justice M. H. Kania (Former Chief Justice of India) to consider the
proposals. The report of the Expert Group is placed for eliciting public comments on the
recommendations. It may be noted that the Report does not necessarily reflect the views of SEBI on
the various proposals and recommendations. SEBI would consider the comments received from
various sources before taking any final view on the recommendations

24
In India, a demat account, the abbreviation for dematerialized account, is a type of banking account
which dematerializes paper-based physical stock shares. The dematerialized account is used to avoid
holding physical shares: the shares are bought and sold through a stock broker. This account is
popular in India. The Securities and Exchange Board of India (SEBI) mandates a demat account
for share trading above 500shares. As of April 2006, it became mandatory that any person holding a
demat account should possess a Permanent Account Number (PAN),

1. Fill demats request form (DRF) (obtained from a depository participant or DP with whom
your depository account is opened).
2. Deface the share certificate(s) you want to dematerialize by writing across surrendered for
dematerialization.
3. Submit the DRF & share certificate(s) to DP. DP would forward them to the issuer/ their
R&T agent.
4. After dematerialization, your depository account with your DP would be credited with the
dematerialized securities.

The benefits:

 A safe and convenient way to hold securities; 


 Immediate transfer of securities; 

 No stamp duty on transfer of securities; 

 Elimination of risks associated with physical certificates such as bad delivery, fake securities,
delays, thefts etc; 

 Reduction in paperwork involved in transfer of securities; 

 Reduction in transaction cost; 

 No odd lot problem, even one share can be sold; 

 Nomination facility; 

 Change in address recorded with DP gets registered with all companies in which investor
holds securities electronically eliminating the need to correspond with each of them
separately; 

25
 Transmission of securities is done by DP eliminating correspondence with
companies;automatic credit into demat account of shares arising out of
us/split/consolidation/merger etc.
Holding investments in equity and debt instruments in a single account.
Required documents:

The extent of documentation required to open a demat account may vary according to your
relationship with the institution. If you plan to open a demat account with a bank, a savings, current
and, or other account for which the holder have been issued a check book, such holder has an edge
over the non-account holder. In fact, banks usually offer additional incentives to customers who
open a demat account with them. Along with the application form, your photographs (with co
applicants) and proof of identify/ residence/date of birth have to be submitted. The DPs also ask for a
DP-client agreement to be executed on non-judicial stamp paper.

Here is a broad list:

 A cancelled check, preferably MICR 


 Proof of identification 

 Proof of address 

 Proof of PAN card (mandatory) 

 Recent photographs, one and/or more 

For proof of identification and, or address self-attested facsimile copies of PAN card, voter‟s
ID, passport, ration card, driver‟s license, photo credit card, employee ID card, bank attestation,

latest IT returns and, or latest electricity/landline phone bill are sufficient. While they only ask for
photocopies of the documents, they will need the originals for verification.

COMPANY PROFILE

About TrustLine:

 Trust line securities limited “is a stock brokarised company. It is one of the fastest
growing financial services organization, established in the year 1989. 

 The code of this organization “ISO 9001:2008” 

 Trust line has effective membership in several sectors like (equity & F and O, NSE,
NSEF, BSE, BSEF, DSE) equity shares and preference shares, commodities (MCX,
NCDEX, NMCEIL), currency (NSE, MCX-SX currency), depository (CDSL, NSDL). 
26
  The grate personalities Dr. Muksesh Kansal and Mrs. Sarika Kansal are the promoters of the
trust line and Dr. Mukesh Kansal is the chairman and managing director of the trust line 

 And another personality Mrs. Sarika Kansal is the director of the trust line. 

 Trust line head office is located in Noida, New Delhi. 

 In 21 years they have 80 own branches, 430 business associates, 510 total locations, 1000
human assets, 1200 trading terminals, 70000 clients, and 80000 d‟ mat accounts
through out in our India. 

Products of trust line: Trust line securities limited has introduced severalProducts to the
customers with an advanced technology.The products are as followos

 Equity and derivative 


 Commodities trading 

 Currency trading 

 Depository services 

 Research and analysis 

 Mutual funds, insurance 

 Institutional channels 

 Investment advisory services 

 Real estate services. 

Supporters to the trust line:

Already we have a extraordinary support ofFIIS, DIIS, Banks

FIIS:Gold mansachs, credit-suisse, India absolute, karma capital .. etc.

DIIS:UTI, Reliance Mutual Fund, Pnb Taurns Mutual Fund, Canara Robeco Asset Management
Company, National Insurance Company, Ianbank Investment Management Services.

Banks:PNB, OBC, central bank, Canara bank, Dena bank, Bank of India… etc.

27
Objective of the trustline: We endeavour to be amongst the top ranking highly networked fully
integrated broking and financial services house in the country.

Mission of the trustline: To guide all our investors to enlarge their investment by systematic
development of funds.

Vision of the trustline: To position our self‟s amongst the top integrated and professionally
managed investment and financial firms in India.

Values of the trustline: Professional management high corporate governance standardsSystem and
process drives business practices Accountability and responsibility,Integrity and commitment
services with great

Technology: Trust line securities limited no compromise in technology investment compares to

other firms we have a great and marvellous technology like

 Latest firewalls to secure network 


 WIFI enabled office and other location 

 ISDN backup 

 Top end routers and switches 

 24 hrs power backup 

 FTP to download data and branches 

 VSAT network 

 Radio frequency for standard by arrangement 

 Sophisticated research software 

 Client support through remote central excellent back office software. 

TRUSTLINE NETWORK
1. Andhra Pradesh 3.Himachal Pradesh 10. New Delhi
(A) Hyderabad 4.Gujarat 11.Orrisa
(B) Nellore 5.Haryana 12. Punjab
(C) Vizag 6. Jharkhand 13.Rajasthan
(D) Vijayawada 7.Karnataka 14. Tamil Nadu
(E) Tirupathi 8. Madhya Pradesh 15. Uttar Pradesh
2. Bihar 9.Maharastra 16. Uttar Khand
17.West Bengal
28
company Growth

Trust Line Securities Ltd. , a Company registered under the Companies Act, 1956 is a Member of
the National Stock Exchange (NSE) & Bombay Stock Exchange (BSE) of Cash and F&O Segment,
Central Depository Services (I) Ltd. (CDSL), National Securities Depository Ltd. (NSDL) and also a
Trading and Clearing member of the Currency Derivative Segment of NSE.

Trust Line is a professionally managed group headed by the directors, having vast experience in the
stock market. Besides the core promoters, the group is having its full fledged teams headed by
young and dynamic professionals like chartered accountants, company secretaries, MBAs, IT
professionals etc. to handle the various divisions of the company.

We are fully equipped with all modern infrastructures to carry on its activities. Our offices are
well connected through the VPN, Lease line, ISDN, Internet and other network facilities. All of its
operations are computerized through the advanced technologies. All offices are ultra modern, hi-
tech, well furnished and fully computerized, driven by the well-qualified professionals.

We have 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 & NSDL 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
individual

Achievements
29
Management Profile
30
Dr. Mukesh Kansal Fellow member of “The Institute of Chartered Accountants of India”, Fellow
member of “The Institute of the Company Secretaries of India” and Ph.D. on “Stock Exchange and its
significance in India” Having about 20 years of experience in Indian Stock Markets & Financial
Services, he is the Chairman and Managing Director one of the Principal Promoters of Trust Line
Securities Ltd.

Ms. Sarika Kansal Bachelor of Arts.Having more than 13 years of experience in Indian Stock
Markets & Financial Services, is the Director and one of the Principal Promoters of Trust Line
Securities Ltd.

Mr. Vinay Kumar Gupta (Master of Commerce).Having about 20 years of experience in

Indian Stock Markets & Financial Services, is a Director of Trust Line Securities Ltd.

Mission & Vision

Mission
To empower individual investors to take control of their financial matters by investing in the
securities markets, to free them from the high costs and conflicts of traditional stock broking firms
and to enable them to participate in the economic growth of India.
Vision
To provide world class investment solutions and opportunities to the investing public and the
corporate who believe in „India as a story whose time has come, and to empower them through
modern technology. To provide the most attractive and ethical Investment Solutions – guided by
values driven approach to growth, efficient and fair client service and welfare of employees.
Our Team
  Knowledgeable and experienced professionals having in-depth knowledge. 
 Dedicated employees committed to customer services. 

Our Motto
To treat customers with dignity, respect and care. Consistent efforts to improve our skills and
services to serve the customers better

Our Team

  Knowledgeable and experienced professionals having in-depth knowledge. 

 Dedicated employees committed to customer services. 

Our Motto
To treat customers with dignity, respect and care. Consistent efforts to improve our skills and
services to serve the customers better

31
Important Terms In Stock Market And In stock trading
Open -The first price at which the stock opens when market opens in the
morning. High - The stock price reached at the highest level in a day.

Low- The stock price reached the lowest level in a day.

Close- The stock price at which it remains after the end of market timings or the final price of the
stock when the market closes for a day.

Volume - Volume is nothing but quantity.

Bid - The Buying price is called as Bid price.
Offer- The selling price is called offer price.
Bid Quantity - The total number of stocks available for buying is called Bid Quantity. Offer
Quantity - The total number of stocks available for selling is called Offer Quantity.

Buying and selling of stocks - Buy is also called as demand or bid and selling is also called as
supply or offer. First selling and then buying (this only happens in day trading) is called as shorting
of stocks or short sell.
Stock Trading - Buying and selling of stocks is called stock trading.
Transaction - One complete cycle of buying and selling of stocks is called One Transaction.
Squaring off - This term is used to complete one transaction. Means if you buy then have to
sell (means square-off) and if you sell then you have to buy (means square-off).

Limit Order - In limit order the buying or selling price has to be mentioned and when the
stock price comes to that price then your order will get executed.
Market Order- When you put buy or sell price at market rate then the price get executes at the
current ratethat formerly carried premium margins for marketparticipants have become

32
Financial instruments

Spot : A spottransaction is a two-day delivery transaction (except in the case of trades between the
US Dollar, Canadian Dollar, Turkish Lira, EURO and Russian Ruble, which settle the next business
day), as opposed to the futures contracts, which are usually three months. This trade represents a
“direct exchange” between two currencies, has the shortest time frame, involves cash rather than a
contract; and interest is not included in the agreed-upon transaction.

Forward : One way to deal with the foreign exchange risk is to engage in a forward transaction.
In this transaction, money does not actually change hands until some agreed upon future date. A
buyer and seller agree on an exchange rate for any date in the future, and the transaction occurs on
that date, regardless of what the market rates are then. The duration of the trade can be one day, a
few days, months or years. Usually the date is decided by both parties. Then the forward contract is
negotiated and agreed upon by both parties.

Swap : The most common type of forward transaction is the FX swap. In an FX swap, two parties
exchange currencies for a certain length of time and agree to reverse the transaction at a later date.
These are not standardized contracts and are not traded through an exchange.

Future : Futures are standardized and are usually traded on an exchange created for this purpose.
The average contract length is roughly 3 months. Futures contracts are usually inclusive of any
interest amounts.

Option : A foreign exchange option (commonly shortened to just FX option) is a derivative where
the owner has the right but not the obligation to exchange money denominated in one currency into
another currency at a pre-agreed exchange rate on a specified date. The FX options market is the
deepest, largest and most liquid market for options of any kind in the world.

Speculation : Controversy about currency speculators and their effect on currency devaluations
and national economies recurs regularly. Nevertheless, economists including Milton Friedman have
argued that speculators ultimately are a stabilizing influence on the market and perform the
important function of providing a market for hedgers and transferring risk from those people who
don't wish to bear it, to those who do. Other economists such as Joseph Stiglitz consider this
argument to be based more on politics and a free market philosophy than on economics.

33
Large hedge funds and other well capitalized "position traders" are the main professional
speculators. According to some economists, individual traders could act as "noise traders" and have
a more destabilizing role than larger and better informed actors.

Currency speculation is considered a highly suspect activity in many countries. While investment in
traditional financial instruments like bonds or stocks often is considered to contribute positively to
economic growth by providing capital, currency speculation does not; according to this view, it is
simply gamblingthat often interferes with economic policy. For example, in 1992, currency
speculation forced the Central Bank of Sweden to raise interest rates for a few days to 500% per
annum, and later to devalue the krona. Former Malaysian Prime Minister Mahathir Mohamad is
one well known proponent of this view. He blamed the devaluation of theMalaysian ringgit in 1997
on George Soros and other speculators.

Gregory J. Millman reports on an opposing view, comparing speculators to "vigilantes" who

simply help "enforce" international agreements and anticipate the effects of basic economic "laws"
in order to profit.

In this view, countries may develop unsustainable financial bubbles or otherwise mishandle their
national economies, and foreign exchange speculators made the inevitable collapse happen sooner. A
relatively quick collapse might even be preferable to continued economic mishandling, followed by
an eventual, larger, collapse. Mahathir Mohamad and other critics of speculation are viewed as
trying to deflect the blame from themselves for having caused the unsustainable economic
conditions

Risk aversion in forex

Risk aversion in the forex is a kind of trading behavior exhibited by the foreign exchange market
when a potentially adverse event happens which may affect market conditions. This behavior is
caused when risk averse traders liquidatetheir positions in risky assets and shift the funds to less
risky assets due to uncertainty.

In the context of the forex market, traders liquidate their positions in various currencies to take up
positions in safe-haven currencies, such as the US Dollar. Sometimes, the choice of a safe haven
currency is more of a choice based on prevailing sentiments rather than one of economic statistics.
An example would be the Financial Crisis of 2008. The value of equities across world fell while the
US Dollar strengthened (see Fig.1). This happened despite the strong focus of the crisis in the USA.

34
Financial instruments

Spot : A spottransaction is a two-day delivery transaction (except in the case of trades between the
US Dollar, Canadian Dollar, Turkish Lira, EURO and Russian Ruble, which settle the next business
day), as opposed to the futures contracts, which are usually three months. This trade represents a
“direct exchange” between two currencies, has the shortest time frame, involves cash rather than a
contract; and interest is not included in the agreed-upon transaction.

Forward : One way to deal with the foreign exchange risk is to engage in a forward transaction.
In this transaction, money does not actually change hands until some agreed upon future date. A
buyer and seller agree on an exchange rate for any date in the future, and the transaction occurs on
that date, regardless of what the market rates are then. The duration of the trade can be one day, a
few days, months or years. Usually the date is decided by both parties. Then the forward contract is
negotiated and agreed upon by both parties.

Swap ; The most common type of forward transaction is the FX swap. In an FX swap, two parties
exchange currencies for a certain length of time and agree to reverse the transaction at a later date.
These are not standardized contracts and are not traded through an exchange.

Future : Futures are standardized and are usually traded on an exchange created for this purpose.
The average contract length is roughly 3 months. Futures contracts are usually inclusive of any
interest amounts.

Option : A foreign exchange option (commonly shortened to just FX option) is a derivative where
the owner has the right but not the obligation to exchange money denominated in one currency into
another currency at a pre-agreed exchange rate on a specified date. The FX options market is the
deepest, largest and most liquid market for options of any kind in the world.

35
Speculation : Controversy about currency speculators and their effect on currency devaluations
and national economies recurs regularly. Nevertheless, economists including Milton Friedman have
argued that speculators ultimately are a stabilizing influence on the market and perform the
important function of providing a market for hedgers and transferring risk from those people who
don't wish to bear it, to those who do. Other economists such as Joseph Stiglitz consider this
argument to be based more on politics and a free market philosophy than on economics.

Large hedge funds and other well capitalized "position traders" are the main professional
speculators. According to some economists, individual traders could act as "noise traders" and have
a more destabilizing role than larger and better informed actors.

Currency speculation is considered a highly suspect activity in many countries. While investment in
traditional financial instruments like bonds or stocks often is considered to contribute positively to
economic growth by providing capital, currency speculation does not; according to this view, it is
simply gamblingthat often interferes with economic policy. For example, in 1992, currency
speculation forced the Central Bank of Sweden to raise interest rates for a few days to 500% per
annum, and later to devalue the krona. Former Malaysian Prime Minister Mahathir Mohamad is
one well known proponent of this view. He blamed the devaluation of theMalaysian ringgit in 1997
on George Soros and other speculators.

Gregory J. Millman reports on an opposing view, comparing speculators to "vigilantes" who

simply help "enforce" international agreements and anticipate the effects of basic economic "laws"
in order to profit.

In this view, countries may develop unsustainable financial bubbles or otherwise mishandle their
national economies, and foreign exchange speculators made the inevitable collapse happen sooner. A
relatively quick collapse might even be preferable to continued economic mishandling, followed by
an eventual, larger, collapse. Mahathir Mohamad and other critics of speculation are viewed as
trying to deflect the blame from themselves for having caused the unsustainable economic
conditions

Risk aversion in forex : Risk aversion in the forex is a kind of trading behavior exhibited by
the foreign exchange market when a potentially adverse event happens which may affect market
conditions. This behavior is caused when risk averse traders liquidatetheir positions in risky assets
and shift the funds to less risky assets due to uncertainty.

36
In the context of the forex market, traders liquidate their positions in various currencies to take up
positions in safe-haven currencies, such as the US Dollar. Sometimes, the choice of a safe haven
currency is more of a choice based on prevailing sentiments rather than one of economic statistics.
An example would be the Financial Crisis of 2008. The value of equities across world fell while the
US Dollar strengthened (see Fig.1). This happened despite the strong focus of the crisis in the USA.

37
 Chapter - 3
RIVEW OF LITERATURE

38
 REVIEW OF LITERATURE

The concept of capital market is in a way 129 years old. Capital market was known as “share
bazaar” it was also treated as a ”satta bazaar” starting of capital market concept in India took
place with the birth of Bombay Stock Exchange.

A securities contract (Regulation) Act of 1956 of India was first major step to recognize capital
market. Bombay Stock Exchange got first recognition in 1956 under this act.

Bombay Stock Exchange, which was the major stock exchange, in way had monopoly in the
Indian capital market till the birth of National Stock Exchange. Bombay Stock Exchange
celebrated its 125th jubilee year in the 2000. The capital market, the stock exchange, the
Equity concept was baby till 1960. And the concept of mutual fund was introduced by the
government with the formation of Unit Trust of India in 1963-64.

Capital market in India is a new development compared to the western world. India was
known as under developed country from the view point of economic and industrial growth.
After getting freedom in 1947, India started thinking about planned development in 1948. The
first industrial policy development statement was made on April 6th 1948.

The concept of capital market is directly linked with industrial development of country. It is
also treated as barometer of economic growth. Industrial development started in India in 19th
century, there were very few entrepreneurs known as Tata’s, Birla’s, etc. who started
industries in their own country i.e. India. In the 20th century first quarter, this group started
big industries in major metropolitan cities.

Stock exchanges have a very important function to fulfill in the country’s economy. Its main
function is to liquefy capital by enabling a person who has invested money in.The stock
exchange is really an essential pillar of the private sector corporate economy.The stock
exchange provides a market place for purchase and sale of securities i.e. shares, bonds,
debentures, etc…The stock exchange provides the linkage between the saving in the house
hold sector and the investment in corporate economy.

By providing a market quotation of the prices of shares and bonds a sort of collective judgment
simultaneously reached by many buyers and sellers in the market. The stock exchanges serve
the role of barometer. Exchanges serve the role of barometer, not only the state of health of
individual companies, but also of the nation’s economy as a whole.Another important function

39
that the stock exchange in India discharge is of providing market for gilt-edged securities i.e.
securities issued by the government sectors, municipalities, improvement trust, and other
public bodies.

There are 23 stock exchange in India, the first being the Bombay Stock Exchange (BSE),which
began formal trading in 1875, making it one of the oldest in Asia. Over the last few years, there
has been a rapid change in the Indian securities market, especially in the secondary market.
Advanced technology and online-based transactions have modernized the stock exchanges. In
terms of the number of companies listed and total market capitalization, the Indian equity
market is considered large relative to the country’s stage of economic development. The
number of listed companies increased from 5,968 in March 1990 to about 10,000 by May 1998
and market capitalization has grown almost 11 times during the same period. The debt
market, however, is almost nonexistent in India even though there has been a large volume of
Government bonds traded. Banks and financial institutions have been holding a substantial
part of these bonds as statutory liquidity requirement. The portfolio restrictions on financial
institutions statutory liquidity requirement are still in place.

A primary auction market for Government securities has been created and a primary dealer
system was introduced in 1995. There are six authorized primary dealers. Currently, there are
31 mutual funds, out of which 21 are in the private sector. Mutual funds were opened to the
private sector in 1992. Earlier, in 1987, banks were allowed to enter this business, breaking
the monopoly of the Unit Trust of India (UTI), which maintains a dominant position. Before
1992, many factors obstructed the expansion of equity trading. Fresh capital issues were
controlled through the Capital Issues Control Act. Trading practices were not transparent, and
there was a large amount of insider trading. Recognizing the importance of increasing investor
protection, several measures were enacted to improve the fairness of the capital market. The
Securities and Exchange Board of India (SEBI) was established in 1988. Despite the rules it set,
problems continued to exist, including those relating to disclosure criteria, lack of broker
capital adequacy, and poor regulation of merchant bankers and underwriters.There have been
significant reforms in the regulation of the securities market since 1992 in conjunction with
overall economic and financial reforms.In 1992, the SEBI Act was enacted giving SEBI statutory
as an apex regulatory body. And a series of reforms was introduced to improve investor
protection. Automation of stock trading, integration of national markets, and efficiency of
market operations. India has seen a tremendous change in the secondary market for equity. Its
equity market will most likely be comparable with the world’s most advanced secondary
40
markets within a year or two. The key ingredients that underlie market quality in India’s
equity market are:

 Exchange based on open electronic limit order book;

 Nationwide integrated market with a large number of informed traders and
fluency of short or long positions; and
 No Counter Party Risk.

Chapter - 4
Research methodology

41
 Research Methodologies
Need of the Study

The need of the study is to describe the techniques and planning in today”s investment
environment. A part from this the objective project study is to keenly understand issues
examines all the essential analysis and teaches how to apply them successfully. It incorporates
sections on fundamental analysis and analysis in the contexts of companies and markets.For
the purpose study the volatility in the IT industries stock prices for certain period.

For this study the data is collected are return and risk of investing an industrial stock. Equity
analysis and market price of shares of HCL TECHNOLOGIES

SCOPE OF THE STUDY

This study cover introduction to capital market and trading to serve as basic material
for capital market operations. However basic fundamentals have been brought out which can
be for the study in large scale studies..

OBJECTIVE OF THE STUDY

 To study the movement of equity share prices of 3 it companies i.e. HCL

Technologies,,Oracle financial services software and Tech Mahindra during 2009-2013

 To understand the performance of 3 Indian IT companies in indiaduing 2009-2013 


  To understand the ONLINE TRADING system and it’s process at TRUSTLINE 
SECURITIES LTD 

 To suggest retail investor about the concept of fundamental analysis of shares – the
safest approach for investing in stock market 

42
SOURCES OF DATA

1. Secondary data collection from the following sources

 Newspapers 

 Books 

 Internet 

 BSE data 

 NSE data 

 GOVT reports(SEBI) 


2. Primary data collected ,by watching daily price updates in market from April 2009 to
March 2012.

3. Experts opinion from marketing

LIMITATIONS OF THE STUDY:

 The company has a large clients but limited analysts, which limited the amount of time
that they could spend with us to provide the required data.So, the aspired analysing
could not take place. 

The two month time period is sufficient to do an extensive study over the IT sector
stocks' performance.

Study of mere 3 IT COMPANIES may not cover the entire IT INDUSTRY performance

43
44
 Chapter - 5
Data Analysis &
Interpretation

45
DATAANALYSIS AND INTERPRETATION

HCL TECHNOLOGIES LIMITED

Monthly returns of HCL TECHNOLOGIES During 2010-2011

Date Open Close Change Returns Returns(%)

Apr-10 360 394.45 34.45 9.569444444 956.9444444
May-10 390 382.35 -7.65 -1.961538462 -196.1538462
Jun-10 383 364.15 -18.85 -4.921671018 -492.1671018
Jul-10 364 392.2 28.2 7.747252747 774.7252747
Aug-10 396.55 382.55 -14 -3.530450132 -353.0450132
Sep-10 384.15 420.75 36.6 9.527528309 952.7528309
Oct-10 422.5 403.8 -18.7 -4.426035503 -442.6035503
Nov-10 405.15 403.75 -1.4 -0.34555103 -34.55510305
Dec-10 407 456.25 49.25 12.1007371 1210.07371
Jan-11 460 490.75 30.75 6.684782609 668.4782609
Feb-11 494.4 442.45 -51.95 -10.50768608 -1050.768608
Mar-11 445 477.95 32.95 7.404494382 740.4494382

SUM OF RETURNS= STANDARD DEVIATION/RISK =

AR/ER =

46
 Monthly returns of HCL TECHNOLOGIES During 2011-2012
Date Open Close Change Returns Returns(%)

Apr-11 476.45 521.2 44.75 9.392381152 939.2381152

May-11 523 514.8 -8.2 -1.567877629 -156.7877629
Jun-11 511.4 494.75 -16.65 -3.255768479 -325.5768479
Jul-11 495.65 486.8 -8.85 -1.785534147 -178.5534147
Aug-11 487.1 410.95 -76.15 -15.63334018 -1563.334018
Sep-11 409 409.15 0.15 0.036674817 3.667481663
Oct-11 405 443.75 38.75 9.567901235 956.7901235
Nov-11 437 383.8 -53.2 -12.17391304 -1217.391304
Dec-11 394 387.95 -6.05 -1.535532995 -153.5532995
Jan-12 389 437.65 48.65 12.50642674 1250.642674
Feb-12 439.8 484.95 45.15 10.26603001 1026.603001
Mar-12 481 483.25 2.25 0.467775468 46.77754678

SUM OF RETURNS= STANDARD DEVIATION/RISK =

AR/ER =

47

48
COMPARISION OF RETURNS (%) OF HCL TECHNOLOGIES DURING 2009-201
2009-10 2010-11 2011-2012
APRIL 29.2039801 9.56944444 9.392381152
MAY 27.843738 -1.96153846 -1.56787763
JUNE 8.11046512 -4.92167102 -3.25576848
JULY 29.5698925 7.74725275 -1.78553415
AUGUST 23.9669421 -3.53045013 -15.6333402
SEPTEMBER 13.9799331 9.52752831 0.036674817
OCTOBER -10.4532164 -4.50514367 9.567901235
NOVEMBER 11.4380165 -0.34555103 -12.173913
DECEMBER 9.2219444 12.1007371 -1.53553299
JANUARY -7.33466934 6.68478261 12.50642674
FEBRUARY 6.71511628 -10.5076861 10.26603001
MARCH -2.36992645 7.40449438 0.467775468

2009-10 2010-11 2011-2012

AVERAGE /EXPECTED RETURN 11.66 2.27 0.524
STANDARD DEVIAION/RISK 13.94 7.37 8.79

49
 HCL TECHNOLOGIES
16
14
12
10
8
6
4
2
0
2009-10 2010-11 2011-2012
AVERAGE /EXPECTED RETURN
11.66 2.27 0.524
MARCH
STANDARD DEVIAION/RISK 13.94 7.37 8.79

INTERPRETATION
From the above graph, it is observed that the returns of the hcl tech ltd is
decreasng as years passes by, in the year 2009-2010 returns are in a healthy position but in
the successor finncial years 2010-11 & 2011-12 returns are decreasing. Coming to risk, in
2010-11 is lower compared to other two financial Years

50
 Monthly returns of ORACLE FINANCIAL SERVICES SOFTWARE-2009-2010
OPEN CLOSE CHANGE RETURNS RETURNS(%) R-ER
APRIL 745 883.4 138.4 0.185772 18.5771812 269.5238388
MAY 900 1158.35 258.35 0.287056 28.7055556 704.6665198
JUNE 1175 1249.35 74.35 0.063277 6.32765957 17.36938633
JULY 1259.9 1535.7 275.8 0.218906 21.8906262 389.2976118
AUGUST 15305 1736.3 -13568.7 -0.88655 -88.655341 8247.426232
SEPTEMBE 1740 1840.55 100.55 0.057787 5.77873563 13.09524758
OCTOBER 1840 2125.9 285.9 0.15538 15.5380435 178.9720473
NOVEMBE 2124 2141.25 17.25 0.008121 0.81214689 1.816707999
DECEMBE 2160 2318.05 158.05 0.073171 7.31712963 26.59598602
JANUARY 2325 2376.9 51.9 0.022323 2.23225806 0.005221228
FEBRUARY 2160 2237.5 77.5 0.03588 3.58796296 2.039078224
MARCH 2216 2300.05 84.05 0.037929 3.79287004 2.666264555

( ) = √∑
STANDARD DEVIATION / −1

Average return / expected return(ER) = ∑

SUM OF RETURNS= 25.90483 SUM OF R-ER= 1333.65

AR/ER= 2.16 STANDARD DEVIATION/RISK 11.01

51
 Monthly returns of ORACLE FINANCIAL SERVICES SOFTWARE-2010-11
OPEN CLOSE CHANGE RETURNS RETURNS(%) R-ER
APRIL 2301.1 2167.25 -133.85 -0.05817 -5.816783 18.44516
MAY 2161 2061.85 -99.15 -0.04588 -4.588154 9.401298
JUNE 2060 2261.4 201.4 0.097767 9.776699 127.6606
JULY 2250 2106.8 -143.2 -0.06364 -6.364444 23.44927
AUGUST 2130 2035.6 -94.4 -0.04432 -4.431925 8.467663
SEPTEMBER 2043 2235.45 192.45 0.0942 9.4199706 119.7267
OCTOBER 2250 2210.2 -39.8 -0.01769 -1.768889 0.060954
NOVEMBER 2215 2084 -131 -0.05914 -5.914221 19.29161
DECEMBER 2089.95 2338.4 248.45 0.118878 11.887844 179.8239
JANUARY 2348 2288.85 -59.15 -0.02519 -2.519165 0.994339
FEBRUARY 2290 2048.05 -241.95 -0.10566 -10.5655 81.78493
MARCH 2145 1986.7 -158.3 -0.0738 -7.379953 34.31562

STANDARD DEVIATION/( ) = √∑ −1

Average return / expected return(ER) = ∑

SUM OF RETURNS= -18.2645 SUM OF R-ER= 623.4220847

AR/ER= -1.522 STANDARD DEVIATION/RISK= 7.528

52
Monthly returns of ORACLE FINANCIAL SERVICES SOFTWARE-2011-2012
OPEN CLOSE CHANGE RETURNS RETURNS(%) R-ER
APRIL 1999 2021.45 22.45 0.01123062 1.12306153 2.8796
MAY 2036.6 2222.95 186.35 0.09150054 9.15005401 40.06958
JUNE 2239.6 2288.6 49 0.02187891 2.18789069 0.399562
JULY 2330 2118.85 -211.15 -0.0906223 -9.0622318 141.1874
AUGUST 2139 1816 -323 -0.1510051 -15.100514 321.1448
SEPTEMBER 1780.05 1900.4 120.35 0.06761046 6.76104604 15.53184
OCTOBER 1895 2113.7 218.7 0.11540897 11.5408971 76.05405
NOVEMBER 2090.1 2031.75 -58.35 -0.0279173 -2.7917325 31.49154
DECEMBER 2066.65 1857.45 -209.2 -0.1012266 -10.122662 167.5125
JANUARY 1845 1984.6 139.6 0.07566396 7.56639566 22.52827
FEBRUARY 1984.65 2645.65 661 0.33305621 33.3056206 929.3731
MARCH 2640 2620.3 -19.7 -0.0074621 -0.7462121 12.71787

STANDARD DEVIATION/( ) = √ ∑
−1

Average return / expected return(ER) = ∑

SUM OF RETURN 33.81161 SUM OF R-ER= 1760.89

AR/ER= 2.82 STANDARD DEVIATION/RISK= 12.65

53
COMPARISION OF RETURNS (%) OF ORACLE FINANCIAL DURING 2009-2012
2009-10 2010-11 2011-2012
APRIL 18.57718 -5.81678 1.12306153
MAY 28.70556 -4.58815 9.15005401
JUNE 6.32766 9.776699 2.18789069
JULY 21.89063 -6.36444 -9.0622318
AUGUST -88.6553 -4.43192 -15.100514
SEPTEMBER 5.778736 9.419971 6.76104604
OCTOBER 15.53804 -1.76889 11.5408971
NOVEMBER 0.812147 -5.91422 -2.7917325
DECEMBER 7.31713 11.88784 -10.122662
JANUARY 2.232258 -2.51917 7.56639566
FEBRUARY 3.587963 -10.5655 33.3056206
MARCH 3.79287 -7.37995 -0.7462121

STANDARD DEVIATION/( ) = √∑ −1

Average return / expected return(ER) = ∑

2009-10 2010-11 2011-2012

AVERAGE /EXPECTED RETURN 2.16 -1.522 2.82
STANDARD DEVIAION/RISK 29.92 7.528 12.65

54
 ORACLE FINANCIAL SERVICES SOFTWARE
35

30

25

20

15

10

-5
2009-10 2010-11 2011-2012
AVERAGE /EXPECTED RETURN
2.16 -1.522 2.82
MARCH
STANDARD DEVIAION/RISK 29.92 7.528 12.65

INTERPRETATION;
From the above graph, it is observed that the returns of oracle are flat in two
financial years i.e 2009-10 & 2011-12 and entered the negative region in 2010-
11. The risk is higher in 2009-10 than other two financial years

55
 TECH MAHINDRA

Monthly returns of TECH MAHENDRA-2009-2010

OPEN CLOSE CHANGE RETURNS RETURNS(%) R-ER
APRIL 266 327.9 61.9 0.232707 23.270677 138.7843
MAY 321.3 473.65 152.35 0.474167 47.416744 1290.731
JUNE 480.2 732.1 251.9 0.524573 52.457309 1678.32
JULY 743.65 848.15 104.5 0.140523 14.05231 6.56543
AUGUST 850 948.85 98.85 0.116294 11.629412 0.019436
SEPTEMBER 955 936.15 -18.85 -0.01974 -1.973822 181.2745
OCTOBER 930 934.35 4.35 0.004677 0.4677419 121.4902
NOVEMBER 929 928.65 -0.35 -0.00038 -0.0376749 132.8873
DECEMBER 935 991.2 56.2 0.060107 6.0106952 30.02278
JANUARY 996.8 972.5 -24.3 -0.02438 -2.437801 193.9836
FEBRUARY 965 890.85 -74.15 -0.07684 -7.6839378 367.6399
MARCH 901 853.1 -47.9 -0.05316 -5.3163152 282.4522

STANDARD DEVIATION/( ) = √∑ −1

Average return / expected return(ER) = ∑

SUM OF RETURNS= 137.8553 SUM OF R-ER= 4424.171

AV/ER= 11.49 STANDARD DEVIATION/RISK= 20.05

56
 Monthly returns of TECH MAHINDRA-2010-2011
OPEN CLOSE CHANGE RETURNS RETURNS(%) R-ER
APRIL 854 774.2 -79.8 -0.09344 -9.3442623 57.36944931
MAY 770.1 636.2 -133.9 -0.17387 -17.387352 243.9016926
JUNE 636 734.2 98.2 0.154403 15.4402516 296.1927592
JULY 728 700.2 -27.8 -0.03819 -3.8186813 4.197095146
AUGUST 705 638.25 -66.75 -0.09468 -9.4680851 59.26051431
SEPTEMBE 638.25 752 113.75 0.178222 17.82217 383.8531252
OCTOBER 756 729.25 -26.75 -0.03538 -3.5383598 3.127096341
NOVEMBE 735 639.3 -95.7 -0.1302 -13.020408 126.5716838
DECEMBER 655 702.4 47.4 0.072366 7.23664122 81.11958609
JANUARY 710.5 650.95 -59.55 -0.08381 -8.3814215 43.7108947
FEBRUARY 651 645.25 -5.75 -0.00883 -0.8832565 0.786313984
MARCH 650 676.15 26.15 0.040231 4.02307692 33.55974024

STANDARD DEVIATION/( ) = √∑ −1

Average return / expected return(ER) = ∑

SUM OF RETURN -21.3197 SUM OF R-ER= 1333.65

AV/ER -1.77 STANDARD DEVIATION/RISK 11.01

57
 Monthly returns of TECH MAHINDRA-2011-2012
OPEN CLOSE CHANGE RETURNS ETURNS(% R-ER
APRIL 672 686.4 14.4 0.021429 2.142857 1.67148
MAY 686 677.8 -8.2 -0.01195 -1.19534 4.183396
JUNE 679.85 723.25 43.4 0.063838 6.383761 30.62251
JULY 728.05 775.95 47.9 0.065792 6.579218 32.82394
AUGUST 776.05 648.8 -127.25 -0.16397 -16.3971 297.4638
SEPTEMBER 666.55 574.15 -92.4 -0.13862 -13.8624 216.4555
OCTOBER 556.25 585.5 29.25 0.052584 5.258427 19.43423
NOVEMBER 580.2 565.35 -14.85 -0.02559 -2.55946 11.62443
DECEMBER 579 573.7 -5.3 -0.00915 -0.91537 3.116536
JANUARY 578 652 74 0.128028 12.80277 142.8687
FEBRUARY 655.25 600.5 -54.75 -0.08356 -8.35559 84.74288
MARCH 598.5 720.75 122.25 0.204261 20.42607 383.2223

STANDARD DEVIATION/( ) = √∑ −1

Average return / expected return(ER) = ∑

SUM OF RETURNS= 10.30777 SUM OF R-ER= 1228.23

AV/ER= 0.85 STANDARD DEVIATION/RISK= 10.57

58
 Monthly returns of TECH MAHINDRA-2012-2013

Date Open Close Difference Returns returns(%)

Apr-12 717.95 701.75 16.2 2.256424542
0.022564245
May-12 712 673.55 38.45 5.400280899
0.054002809
Jun-12 670.9 708.3 -37.4 -5.574601282
-0.055746013
Jul-12 710 713.1 -3.1 -0.436619718
-0.004366197
Aug-12 711 798.6 -87.6 -12.32067511
-0.123206751
Sep-12 802.8 972.05 -169.25 -21.08246139
-0.210824614
Oct-12 975.55 948.45 27.1 2.777920148
0.027779201
Nov-12 947 880.1 66.9 7.064413939
0.070644139
Dec-12 882.15 932.25 -50.1 -5.67930624
-0.056793062
Jan-13 938.65 998.95 -60.3 -6.424119746
-0.064241197
Feb-13 998.95 1051.05 -52.1 -5.21547625
-0.052154763
Mar-13 1052 1059.5 -7.5 -0.712927757
-0.007129278
COMPARISION OF RETURNS (%) OF TECH MAHINDRA DURING 2009-2012
2009-10 2010-11 2011-2012 Returns

APRIL 23.27068 -9.34426 2.142857 2.256424542

MAY 47.41674 -17.3874 -1.19534 5.400280899

JUNE 52.45731 15.44025 6.383761 -5.574601282

JULY 14.05231 -3.81868 6.579218 -0.436619718

AUGUST 11.62941 -9.46809 -16.3971 -12.32067511

SEPTEMBER -1.97382 17.82217 -13.8624 -21.08246139

OCTOBER 0.467742 -3.53836 5.258427 2.777920148

NOVEMBER -0.03767 -13.0204 -2.55946 7.064413939

DECEMBER 6.010695 7.236641 -0.91537 -5.67930624
JANUARY -2.4378 -8.38142 12.80277 -6.424119746

FEBRUARY -7.68394 -0.88326 -8.35559 -5.21547625

MARCH -5.31632 4.023077 20.42607 -0.712927757

2009-10 2010-11 2011-2012

AVERAGE /EXPECTED RETURN 11.49 -1.77
0.85
STANDARD DEVIAION/RISK 20.05 11.01 10.57

59
 TECH MAHENDRA
25

20

15

10

-5
2009-10 2010-11 2011-2012
AVERAGE /EXPECTED
11.49 -1.77 0.85
RETURN MARCH
STANDARD DEVIAION/RISK 20.05 11.01 10.57

Interpretation
From the above graph, it is observed that the return of tech Mahindra is higher
in 2009-10 compared to 2010-11 & 2011-12 and the risks are moderate in two
financial years 2010-11 & 2012

60
 HCL 2009-12 ORACLE 2009-12 TM 2009-12
AVERAGE EXPECTED RETURN 4.818 1.152666667 3.5233333
AVERAGE STANDARD DEVIATION 10.03333333 16.69933333 13.876667

COMPARISION OF AER & RISK OF 3 COMPANIES

18

16

14

12

10

0
HCL 2009-12 ORACLE 2009-12 TM 2009-12
AVERAGE EXPECTED RETURN 4.818 1.152666667 3.523333333
AVERAGE STANDARD
10.03333333 16.69933333 13.87666667
DEVIATION

61
Comparision of Three IT companes
The above graph shows the average expected returns and risks of 3
companies i.e hcl technologies , oracle financial srvices software and tech
mahindra. It is obvious when comparision process is taken place, hcl
technologies ltd is performing better than other two software companies in
terms of returns

62
 Chapter – 5
Findings, Suggestions
&
Conclusion

63
FINDINGS:
The returns are declining and risks are climbing up in 3 companies

Global economic downturn became the major reason for declining of returns and
increasing of risks

 Of the 3 companies , HCL technologies is considered as fundamentally strong financial

company for investing , eventhough there is a decline in the returns. This can be
understood by observing the average returns and risks compared to other two
companies 

64
Suggestions
1. From technical analysis has seen that average returns of the IT sector had
performed better than market so, we suggested investors to invest in IT
sector when all the market conditions are stable.

2. It is Suggested to investor to invest in HCL TECHNOLOGIES because of

average high returns when compared to other two companies

3. It is suggested to investors to analyze fundamental factors before

investing in the companies.

65
Conclusion
HCL TECHNOLOGIES is the best performance stock in the IT sector performed
better than both Tech Mahindra &Oracle Finance Service Softwarein the present study.
These two companies have a positive corelation when compared to NIFTY
movement.The investors have to consider the fundamental factors such as
Economy,Industry and Company Status before investing.It is also good for investors if
they buy shares(by considering the real value)when the market is bearish to reap good
returns.

66
ANNEXURE-I
Bibliography

67
Investment Analysis And Portpolio Management :
:- prasanna chandra
Financial Markets And Services :

:- Gordon@ natarajan

 Www.Moneycontrol.Com
 The Business Line 
 The Business World Monthly Magazines 

68
PDF to Word