1

INDEX
Sr. no. TOPIC

1 Executive summary

2 Company profile/company background

3 Introduction

4 Objective/scope of study

5 Definations

6 Research methodology

7 Data collection

8 Analysis

9 Conclusion

10 Recommendation

11 Limitation

12 Bibliography
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M O RM AL FI N AN CI A L RE S E AR C H
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ABOUT US

Moral Financial Research is one of the best SEBI Registered

(INA000008093) investment advisory in India which caters &
delivers best stock recommendation in Equity Market, Commodity
Market based on the technical and fundamental analysis. We provide
the most reliable recommendations for letting your money to flow in
right direction. With our research team you can spot real
opportunities of trading in all the segments (NSE, BSE, MCX, and
NCDEX) of market.

Our research team provides you the tools to succeed the right way.
Our aim at providing services in accordance with the comfort levels
of all traders/investors in stock market ranging from small investors
to HNI's.We provide recommendations in all segments with proper
assistance & fast SMS/ messenger facility. We also provide you the
updates of each & every aspects of market that help you too keep
update & aware. Here we try to fulfil your dreams to make money
from stock market.

Our strategy is mainly focused on our client retention, effective

planning can help us preserving client and also help us unlock
opportunities for future generation.

We believe that our ability to serve client in all the segment of

financial services with solution tailored to their needs. Our
customized services and innovative product differentiate us in highly
competitive world.
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MISSION & VISSION OF THE COMPANY

OUR MISSION

We want to help our clients to get greater returns out of their investments.
We wish to get based as a reliable and one stop source for the clients’s
desires. The betterment of our clients is the firstly intention of Moral
Financial Research. We need to assist our clients to get larger returns out
of their investments.

OUR VISION
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The vision of Moral Financial Research is to be The Leader in the field of

Indian stock Market research and commodities market consultancy in the
case of the high returns and the consistency on a regular basis. We plan to
achieve this by using providing extremely profitable, accurate and well
timed funding advice to our clients based on their different investments
wants.

We are providing Services

We are providing different services to our clients whose who are trading
in the share market we are giving a valuable advice to our valuable
costumer so that they can trade on right direction with our help

 Equity
 Commodity
 Premium HNI
 Express Services
 6

Equity Services

Stock cash:-

In stock cash market we provide our clients timely intraday best stock
tips which drive them to make maximum profit from the equity
market. Calls are given for NSE Stock Cash Traders and Investors.
We give the calls through SMS system which ensure instant delivery
of calls so that you get enough time to enter the trade and make
maximum profit.

Risk Type : Medium

STOCK CASH TIPS FEATURES:

 We will provide you around 2-3 Cash Market Calls Daily.

 Follow Ups & All Important News & Information.
 Direct Mobile Number will be provided for Support.

MEDIUM OF CALLS:

 Calls Will Be Given Only On SMS.

 India: All GSM & CDMA Networks Covered.
 7

Stock option:-

Trading in options is considered as safe and risk averse but it also

requires lot of technical expertise and understanding of market and
options is particular for volume traders, as the exposure increases the
risk increases.

With MFR, leave the analysis part and understand the options market
to our highly trained analysts. MFR’s team of experienced analysts
has hands on knowledge of option trading and also well versed with
technicalities of options market. Based on the research done by these
analysts, intraday trading tips in options call & put with bigger target s
and low risk are generated for you. These recommendations are
generated based on volume in the options in addition to the technical
factors defining the market.

Risk Type : High

STOCK OPTION FEATURES:

 We provide best 3-4 calls on a Intra-day basis.

 Provide Nifty & Bank Nifty Trend
 Provide purely Intra-day Calls
 Proper follow up through SMS and Chat room
 Provide all important news and economy updates
 Provide proper customer support.

MEDIUM OF CALLS:

 Calls Will Be Given Only On SMS.

 India: All GSM & CDMA Networks Covered
 8

Nifty Future:-

We help traders & investors by providing them deep research calls &
research reports so that they can understand the market chaos & take
benefits from complex market too.

NIFTY FUTURE TIPS FEATURES:

 Estimatedly 3 to 4 calls every day.

 Keep all of our traders completely and constantly updated with the
newest market trends and news.
 Continuous follow up by our devoted and considerate relationship
manager.
 Prolongable Nifty analysis support and resistance level.
 Keep all of our traders constantly updated with the newest world
market news and trends.
 Dole out a free news letter each day.

MEDIUM OF CALLS:

 Calls Will Be Given Only On SMS.

 India: All GSM & CDMA Networks Covered.

Index option:-

Our Research experts Team analysis with keen study of market

movements & Generate 1-2 Best Option calls on intraday basis as per
market conditions.

Index options enable investors to gain exposure to the market as a

whole or to specific segments with one trading decision and often one
transaction. Our Research Expert Team analyze with keen study of
market movements & Generate 1-2 Best Option calls on Intra-day
basis as per market.
 9

Risk Type : High

INDEX OPTION FEATURES:

 We provide best 1-2 calls on a Intra-day basis.

 Provide Nifty & Bank Nifty Trend
 Provide purely Intra-day Calls
 Proper follow up through SMS and Chat room
 Provide all important news and economy updates
 Provide proper customer support.

MEDIUM OF CALLS:

 Calls Will Be Given Only On SMS.

 India: All GSM & CDMA Networks Covered.

Stock future tip:

This service is for the traders who trade in Stock Future. In this pack
we provide Intraday Stock Futures calls. These Stock Futures Tips are
the result of core research and analysis of our technical team and help
you to grab a huge profit. Stock Futures Tips are given by analysts
who work only on this service and are best at it. Our call via SMS
will reach to you as soon as the analysts send so there is no time lag
between you reading it and working on the call.

Risk Type : HIGH

STOCK FUTURE TIPS FEATURES:

 Daily 2-3 Stock Futures intraday Calls.

 Weekly Momentum Calls 1-2 Per Week.
 Follow Ups & All Important News & Information.
 Complete telephonic Support will be provided.

MEDIUM OF CALLS:

 Calls Will Be Given Only On SMS.

 India: All GSM & CDMA Networks Covered.
 10

Option tips:-

Under this you will get Stock Options & Nifty Options calls, on
intraday basis no positional calls will be given by us in this package.

This is our combo service where we provide tips in Stock Option &
Index Option. If you trade on both the segments then this service will
be perfect for you. Our Expert team looks after all your trading need
in this service and provides you best in the market. This Package is
good value for money.

Risk Type: High

OPTION TIPS FEATURES:

 We will provide you around 2-3 on a Intra-day basis.

 Provide Nifty & Bank Nifty Trend.
 Direct Mobile Number will be provided for Support.
 Follow Ups & All Important News & Information

MEDIUM OF CALLS:

 Calls Will Be Given Only On SMS.

 India: All GSM & CDMA Networks Covered
 11

Commodity

Base metals Stocks:-

In This Service we provide you Accurate Commodity tips in Base

Metal segment with proper follow-ups and news information. Our
Expert team provides you detail Technical and Fundamental analysis
of the markets for huge profit.

Risk Type : High

BASE METALS PACK FEATURES:

 2-3 Intraday Calls in Base Metals Commodities – Copper, Nickel,

Zinc, Lead and aluminium and Energy Commodities like Crude
Oil, Natural Gas
 Support & Resistance of all the major commodities will be
provided
 weekly newsletters
 Proper follow-ups and news information

MEDIUM OF CALLS:

 Calls Will Be Given Only On SMS.

 India: All GSM & CDMA Networks Covered.
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Agri Package:-

In this services we provide you Agri Commodity Market Tips like

chana, caster seed,
Cardamom,mentheoil,jeera,dhaniya,soyabean,turmericetc.our
research team provide the analysis of fundamental as well as technical
factors driving the Ncdex market.

Risk Type : High

AGRI PACK FEATURES:

 Around 2-3 Calls will be given daily for Agri Commodities traded
in NCDEX and MCX – Chana, Guar, Jeera, Pepper, Mentha,
Turmeric, Refined Soyaoil, Gur and others.
 Proper follow-ups and news information
 Daily and weekly newsletters
 24/7 customer support

MEDIUM OF CALLS:

 Calls Will Be Given Only On SMS.

 India: All GSM & CDMA Networks Covered.

Bullion package:-

In Bullion Pack Services we provide recommendation in precious

Gold and Silver. This product is best suited for traders who mainly
trade in bullion commodities. In this pack we will provide you detail
Technical and Fundamental analysis of the markets.

Risk Type : High

BULLION PACK FEATURES:

 2-3 Calls will be given daily for Gold and Silver.

 Support & Resistance of all the major commodities will be
provided.
 Proper follow-ups and news information
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MEDIUM OF CALLS:

 Calls Will Be Given Only On SMS.

 India: All GSM & CDMA Networks Covered.

Energy Pack:-

Energy pack is a special product created for commodity traders who

prefer to trade Natural Gas & Crude Oil. As we know that Crude Oil
and Natural Gas Counters are totally depends upon the global market,
Inventories, OPEC meeting etc, Moral Financial Research have a
keen eye on the same and provides absolute guidance to the investors
how to trade in these Commodities and provides proper solutions to
the customer.

Risk Type : High

ENERGY PACK FEATURES:

 We gives 1-2 recommendation daily.

 There would be three targets & a stop loss that you have to follow.
 Medium of the calls would be SMS & Messenger
 Timely Entry & Exit Updates
 Proper Follow ups of calls on messenger & Phone (SMS).
 Complete Customer Support.

MEDIUM OF CALLS:

 Calls Will Be Given Only On SMS.

 India: All GSM & CDMA Networks Covered.
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OBJECTIVE
 As Share Market is the fastest growing sector in India due to heavy
demand of IT services in India . There are huge investment
opportunities as there is high rate of return.
 To exploit this opportunity and earn profit by means of investment
in this sector
 To help analyze the company by understanding simple terms to
invest correctly and effectively

SCOPE OF THE STUDY

The scope of this project is limited to only one sector i.e. share
market sector. This project is concerned with only one sector of
companies in the stock market. The project does not extend its
scope to any other sector of companies.
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DEFINATIONS
Equity/Share
Total equity capital of a company is divided into equal units of small
Denominations, each called a share. For example, in a company the total
Equity capital of Rs 2,00,00,000 is divided into 20,00,000 units of Rs 10
Each. Each such unit of Rs 10 is called a Share. Thus, the company
Then is said to have 20,00,000 equity shares of Rs 10 each. The holders
of such shares are members of the company and have voting rights.

Debt Instrument

Debt instrument represents a contract whereby one party lends money to

another on pre-determined terms with regards to rate and periodicity of
interest, repayment of principal amount by the borrower to the lender.
In Indian securities markets, the term ‘bond’ is used for debt instruments
issued by the Central and State governments and public sector
organizations and the term ‘debenture’ is used for instruments issued by
private corporate sector.

Derivative?
Derivative is a product whose value is derived from the value of one or
more basic variables, called underlying. The underlying asset can be
equity, index, foreign exchange (forex), commodity or any other asset.
Derivative products initially emerged, as hedging devices against
fluctuations in commodity prices and commodity-linked derivatives
remained the sole form of such products for almost three hundred years.
The financial derivatives came into spotlight in post-1970 period due to
growing instability in the financial markets. However, since their
emergence, these products have become very popular and by 1990s, they
accounted for about two- thirds of total transactions in derivative
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products.

Mutual Fund?
A Mutual Fund is a body corporate registered with SEBI (Securities
Exchange Board of India) that pools money from individuals/corporate
investors and invests the same in a variety of different financial
instruments or securities such as equity shares, Government securities,
Bonds, debentures etc. Mutual funds can thus be considered as financial
intermediaries in the investment business that collect funds from the
public and invest on behalf of the investors. Mutual funds issue units to
the investors. The appreciation of the portfolio or securities in which the
mutual fund has invested the money leads to an appreciation in the value
of the units held by investors.
binding on the Mutual Fund scheme. The investment objectives specify
the class of securities a Mutual Fund can invest in. Mutual Funds invest
inThe investment objectives outlined by a Mutual Fund in its prospectus
are
12various asset classes like equity, bonds, debentures, commercial paper
and government securities. The schemes offered by mutual funds vary
from fund to fund. Some are pure equity schemes; others are a mix of
equity and bonds. Investors are also given the option of getting dividends,
which are declared periodically by the mutual fund, or to participate only
in the capital appreciation of the scheme.
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Index
It is a basket of securities and the average price movement of the basket
of securities indicates the index movement, whether upwards or
downwards.

Depository
A depository is like a bank wherein the deposits are securities (viz.
shares, debentures, bonds, government securities, units etc.) in electronic
form.

Dematerialization
Dematerialization is the process by which physical certificates of an
investor are converted to an equivalent number of securities in electronic
form and credited
An Index shows how a specified portfolio of share prices is moving in
order
to the investor’s account with his Depository Participant (DP).
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SEBI’s role
The Securities and Exchange Board of India (SEBI) is the regulatory
authority in India established under Section 3 of SEBI Act, 1992. SEBI
Act, 1992 provides for establishment of Securities and Exchange Board
of India (SEBI) with statutory powers for (a) protecting the interests of
investors in securities (b) promoting the development of the securities
market and (c) regulating the securities market. Its regulatory jurisdiction
extends over corporate in the issuance of capital and transfer of securities,
in addition to all intermediaries and persons associated with securities
market. SEBI has been obligated to perform the aforesaid functions by
such measures as it thinks fit. In particular, it has powers for:
 Regulating the business in stock exchanges and any other securities
markets
 Registering and regulating the working of stockbrokers, sub–brokers
etc.
 Promoting and regulating self-regulatory organizations
 Prohibiting fraudulent and unfair trade practices
 Calling for information from, undertaking inspection, conducting
 Inquiries and audits of the stock exchanges, with the securities
market.
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Market Segments
Securities markets provide a channel for allocation of savings to those
who have a productive need for them. The securities market has two
interdependent and inseparable segments: (i) primary market and (ii)
secondary market.

Primary Market
Primary market provides an opportunity to the issuers of securities, both
Government and corporations, to raise resources to meet their
requirements of investment. Securities, in the form of equity or debt, can
be issued in domestic /international markets at face value, discount or
premium.
The primary market issuance is done either through public issues or
private placement. Under Companies Act, 1956, an issue is referred as
public if it results in allotment of securities to 50 investors or more.
However, when the issuer makes an issue of securities to a select group
of persons not exceeding 49 and which is neither a rights issue nor a
public issue it is called a private placement.

Secondary Market
Secondary market refers to a market where securities are traded after
being offered to the public in the primary market or listed on the Stock
Exchange. Secondary market comprises of equity, derivatives and the
debt markets. The secondary market is operated through two mediums,
namely, the Over-the-Counter (OTC) market and the Exchange-Traded
market. OTC markets are informal markets where trades are negotiated.
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PRIMARY MARKET

Role of the ‘Primary Market’

The primary market provides the channel for sale of new securities.
Primary market provides opportunity to issuers of securities; Government
as well as corporates, to raise resources to meet their requirements of
investment and/or discharge some obligation.
They may issue the securities at face value, or at a discount/premium and
these securities may take a variety of forms such as equity, debt etc. They
may issue the securities in domestic market and/or international market.

Face Value of a share/debenture

The nominal or stated amount (in Rs.) assigned to a security by the issuer.
For shares, it is the original cost of the stock shown on the certificate; for
bonds, it is the amount paid to the holder at maturity. Also known as par
value or simply par. For an equity share, the face value is usually a very
small amount (Rs. 5, Rs. 10) and does not have much bearing on the price
of the share, which may quote higher in the market, at Rs. 100 or Rs.1000
or any other price. For a debt security, face value is the amount repaid to
the investor when the bond matures (usually, Government securities and
corporate bonds have a face value of Rs. 100). The price at which the
security trades depends on the fluctuations in the interest rates in the
economy.
Premium and Discount in a Security Market
Securities are generally issued in denominations of 5, 10 or 100. This is
known as the Face Value or Par Value of the security as discussed earlier.
When a security is sold above its face value, it is said to be issued at a
Premium and if it is sold at less than its face value, then it is said
to be issued at a Discount.
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Why do companies need to issue shares to the public?

Most companies are usually started privately by their promoter(s).

However, the promoters’ capital and the borrowings from banks and
financial institutions may not be sufficient for setting up or running the
business over a long term. So companies invite the public to contribute
towards the equity and issue shares to individual investors. The way to
invite share capital from the public is through a ‘Public Issue’. Simply
stated, a public issue is an offer to the public to subscribe to the share
capital of a company. Once this is done, the company allots shares to the
applicants as per the prescribed rules and regulations laid down by SEBI.

The different kinds of issues

Primarily, issues can be classified as a Public, Rights or Preferential

issues (also known as private placements). While public and rights issues
involve a detailed procedure, private placements or preferential issues are
relatively simpler. The classification of issues is illustrated below:

Initial Public Offering (IPO) is when an unlisted company makes either

a fresh issue of securities or an offer for sale of its existing securities or
both for the first time to the public. This paves way for listing and trading
of the issuer’s securities.

A follow on public offering (Further Issue) is when an already listed

company makes either a fresh issue of securities to the public or an offer
for sale to the public, through an offer document.

Rights Issue is when a listed company which proposes to issue fresh

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securities to its existing shareholders as on a record date. The rights are

normally offered in a particular ratio to the number of securities held
prior to the issue. This route is best suited for companies who would like
to raise capital without diluting stake of its existing shareholders.

A Preferential issue is an issue of shares or of convertible securities by

listed companies to a select group of persons under Section 81 of the
Companies Act, 1956 which is neither a rights issue nor a public issue.
This is a faster way for a company to raise equity capital. The issuer
company has to comply with the Companies Act and the requirements
contained
 23

SECONDARY MARKET

Introduction to Secondary market

Secondary market refers to a market where securities are traded after
being initially offered to the public in the primary market and/or listed on
the Stock Exchange. Majority of the trading is done in the secondary
market. Secondary market comprises of equity markets and the debt
markets.

Role of the Secondary Market

For the general investor, the secondary market provides an efficient
platform for trading of his securities. For the management of the
company, Secondary equity markets serve as a monitoring and control
conduit—by facilitating value-enhancing control activities, enabling
implementation of incentive-based management contracts, and
aggregating information (via price discovery) that guides management
decisions.

Market Capitalization mean

The market value of a quoted company, which is calculated by
multiplying its current share price (market price) by the number of shares
in issue is called as market capitalization. E.g. Company A has 120
million shares in issue. The current market price is Rs. 100. The market
capitalization of company A is Rs. 12000 million.

Products and Participants

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Products
Financial markets facilitate reallocation of savings from savers to
entrepreneurs. Savings are linked to investments by a variety of
intermediaries through a range of complex financial products called
“securities”. Under the Securities Contracts (Regulation) Act [SC(R)A],
1956, “securities” include (i) shares, bonds, scrips, stocks or other
marketable securities of like nature in or of any incorporate company or
body corporate, (ii) government securities, (iii) derivatives of securities,
(iv) units of collective investment scheme, (v) interest and rights in
securities, and security receipt or any other instruments so declared by the
central government. Broadly, securities can be of three types - equities,
debt securities and derivatives.
Participants
The securities market has essentially three categories of participants (i)
the investors, (ii) the issuers, (iii) the intermediaries (Figure 1.1). The
Securities and Exchange Board of India (SEBI), Reserve Bank of India
(RBI), Ministry of Corporate Affairs (MCA) and the Department of
Economic Affairs (DEA) of the Ministry of Finance regulate these
participants.

Market Segments and their Products

The Exchange (NSE) provides trading in four different segments -
Wholesale Debt Market, Capital Market, Futures and Options and
Currency Derivatives Segment as depicted in the figure 1.2 below.

(i) Wholesale Debt Market (WDM) Segment: This segment at NSE

commenced
its operations in June 1994. It provides the trading platform for wide
range of debt securities which includes State and Central Government
securities, T-Bills, PSU Bonds, Corporate debentures, Commercial
 25

Papers, Certificate of Deposits etc.

(ii) Capital Market (CM) Segment: This segment at NSE commenced

its operations in November 1994. It offers a fully automated screen based
trading system, known as the National Exchange for Automated Trading
(NEAT) system. Various types of securities e.g. equity shares, warrants,
debentures etc. are traded on this system.

(iii)Futures & Options (F&O) Segment: This segment provides trading

in derivatives instruments like index futures, index options, stock options,
and stock futures, and commenced its operations at NSE in June 2000.

(iv)Currency Derivatives Segment (CDS) Segment: This segment at

NSE commenced its operations on August 29, 2008, with the launch of
currency futures trading in US Dollar-Indian Rupee (USD-INR). Trading
in other currency pairs like Euro-INR, Pound Sterling-INR and Japanese
Yen-INR was further made available for trading in February 2010.
‘Interest rate futures’ was another product made available for trading on
this segment with effect from August 31, 2009.

Equity Investment

why should one invest in equities in particular?

When a person buy a share of a company you become a shareholder in
that company. Shares are also known. Equities have the potential to
increase in value over time. Research studies have proved that the equity
returns have outperformed the returns of most other forms of investments
in the long term. Investors buy equity shares or equity based mutual funds
because: -
 26

- Equities are considered the most rewarding, when compared to other

investment options if held over a long duration.
- Research studies have proved that investments in some shares with a
longer tenure of investment have yielded far superior returns than any
other investment.
The average annual return of the stock market over the period of last
fifteen years, if one takes the Nifty index, as the benchmark to compute
the returns, has been around 16%.
However, this does not mean all equity investments would guarantee
similar high returns. Equities are high-risk investments. Though higher
the risk, higher the potential returns, high risk also indicates that the
investor stands to lose some or all his investment amount if prices move
unfavorably. One need to study equity markets and stocks in which
investments are being made carefully, before investing.

Return on Equities in India

If we take the Nifty index returns for the past fifteen years, Indian stock
market has returned about 16% to investors on an average in terms of
increase in share prices or capital. Besides that on average stocks have
paid 1.5% dividend annually. Dividend is a percentage of the face value
of a share that a company returns to its shareholders from its annual
profits. Compared to most other forms of investments, investing in equity
shares offers the highest rate of return, if invested over a longer duration.

Factors that influence the price of a stock

Broadly there are two factors: (1) stock specific and (2) market specific.
The stock-specific factor is related to people’s expectations about the
 27

company, its future earnings capacity, financial health and management,

level of technology and marketing skills.
The market specific factor is influenced by the investor’s sentiment
towards the stock market as a whole. This factor depends on the
environment rather than the performance of any particular company.
Events favorable to an economy, political or regulatory environment like
high economic growth, friendly budget, stable government etc. can fuel
euphoria in the investors, resulting in a boom in the market. On the other
hand, unfavorable events like war, economic crisis, communal riots,
minority government etc. depress the market irrespective of certain
companies performing well. However, the effect of market-specific factor
is generally short-term. Despite ups and downs, price of a stock in the
long run gets stabilized based on the stock- specific factors. Therefore, a
prudent advice to all investors is to analyze and invest and not speculate
in shares.
 28

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.

Fundamental Analysis Tools

These are the most popular tools of fundamental analysis. They focus on
earnings, growth, and value in the market. They can be studied with
ratios.

• Earnings per Share – EPS

• Price to Earnings Ratio – P/E

• Projected Earning Growth – PEG

• Price to Sales – P/S

• Price to Book – P/B

• Dividend Payout Ratio

• Dividend Yield

• Book Value
 29

Earnings per Share – EPS

It makes more sense to look at earnings per share (EPS) for use as a
comparison tool. You calculate earnings per share by taking the net
earnings and divide by the outstanding shares.

EPS = Net Earnings / Outstanding Shares

The EPS is helpful in comparing one company to another, assuming they

are in the same industry, but it doesn’t tell you whether it’s a good stock
to buy or what the market thinks of it. For that information, we need to
look at some ratios. Before we move on, you should note that there are
three types of EPS numbers:

Trailing EPS – last year’s numbers and the only actual EPS
Current EPS – this year’s numbers, which are still projections
Forward EPS – future numbers, which are obviously projections

Price to Earnings Ratio – P/E

The P/E is one of those numbers that investors throw around with great
authority as if it told the whole story.The P/E looks at the relationship
between the stock price and the company’s earnings. The P/E is the most
popular metric of stock analysis, although it is far from the only one you
should consider.
You calculate the P/E by taking the share price and dividing it by the
company’s EPS.

P/E = Stock Price / EPS

The P/E gives you an idea of what the market is willing to pay for the
company’s earnings. The higher the P/E the more the market is willing to
 30

pay for the company’s earnings. Some investors read a high P/E as an
overpriced stock and that may be the case, however it can also indicate
the market has high hopes for this stock’s future and has bid up the
price.The P/E is the most popular way to compare the relative value of
stocks based on earnings because you calculate it by taking the current
price of the stock and divide it by the Earnings Per Share (EPS). This tells
you whether a stock’s price is high or low relative to its earnings.

Projected Earning Growth – PEG

Investors may consider a company with a high P/E overpriced and they
may be correct. A high P/E may be a signal that traders have pushed a
stock’s price beyond the point where any reasonable near term growth is
probable.However, a high P/E may also be a strong vote of confidence
that the company still has strong growth prospects in the future, which
should mean an even higher stock price.

Because the market is usually more concerned about the future than the
present, it is always looking for some way to project out. Another ratio
you can use will help you look at future earnings growth is called the
PEG ratio. The PEG factors in projected earnings growth rates to the P/E
for another number to remember.

You calculate the PEG by taking the P/E and dividing it by the projected
growth in earnings.

PEG = P/E / (projected growth in earnings)

For example, a stock with a P/E of 30 and projected earning growth next
year of 15% would have a PEG of 2 (30 / 15 = 2).
 31

What does the “2” mean? Like all ratios, it simply shows you a
relationship. In this case, the lower the number the less you pay for each
unit of future earnings growth. So even a stock with a high P/E, but high
projected earning growth may be a good value.

Price to Sales – P/S

We have a number of tools available to us when it comes to evaluating

companies with earnings. We can add the two others on dividends and the
one on return on equity to the list as specific to companies that are or
have made money in the past.
Does that mean companies that don’t have any earnings are bad
investments? Not necessarily, but you should approach companies with
no history of actually making money with caution.
The Internet boom of the late 1990s was a classic example of hundreds of
companies coming to the market with no history of earning – some of
them didn’t even have products yet. Fortunately, that’s behind
us.However, we still have the problem of needing some measure of
young companies with no earnings, yet worthy of consideration. After all,
Microsoft had no earnings at one point in its corporate life.

One ratio we can use is Price to Sales or P/S ratio. This metric looks at
the current stock price relative to the total sales per share. You calculate
the P/S by dividing the market capof the stock by the total revenues of the
company.

We can also calculate the P/S by dividing the current stock price by the
sales per share.

P/S = Market Cap / Revenues

 32

or

P/S = Stock Price / Sales Price Per Share

When dealing with a young company, there are many questions to answer
and the P/S supplies just one answer.Investors looking for hot stocks
aren’t the only ones trolling the markets. A quiet group of folks called
value investors go about their business looking for companies that the
market has passed by.
Some of these investors become quite wealthy finding sleepers, holding
on to them for the long term as the companies go about their business
without much attention from the market, until one day they pop up on the
screen, and some analyst “discovers” them and bids up the stock.
Meanwhile, the value investor pockets a hefty profit.

Price to Book – P/B

Value investors look for some other indicators besides earnings growth
and so on. One of the metrics they look for is the Price to Book ratio or
P/B. This measurement looks at the value the market places on the book
value of the company.
You calculate the P/B by taking the current price per share and dividing
by the book value per share.
P/B = Share Price / Book Value Per Share

Like the P/E, the lower the P/B, the better the value. Value investors
would use a low P/B is stock screens, for instance, to identify potential
candidates.
 33

Dividend Payout Ratio

The Dividend Payout Ratio (DPR) is one of those numbers. It almost

seems like a measurement invented because it looked like it was
important, but nobody can really agree on why.
The DPR (it usually doesn’t even warrant a capitalized abbreviation)
measures what a company’s pays out to investors in the form of
dividends.
You calculate the DPR by dividing the annual dividends per share by the
Earnings Per Share.
DPR = Dividends Per Share / EPS

For example, if a company paid out $1 per share in annual dividends and
had $3 in EPS, the DPR would be 33%. ($1 / $3 = 33%)

The real question is whether 33% is good or bad and that is subject to
interpretation. Growing companies will typically retain more profits to
fund growth and pay lower or no dividends.

Companies that pay higher dividends may be in mature industries where

there is little room for growth and paying higher dividends is the best use
of profits (utilities used to fall into this group, although in recent years
many of them have been diversifying)

Dividend Yield

if we are value investor or looking for dividend income then there are a
couple of measurements that are specific for us. For dividend investors,
one of the telling metrics is Dividend Yield.
This measurement tells you what percentage return a company pays out
to shareholders in the form of dividends. Older, well-established
 34

companies tend to payout a higher percentage then do younger companies

and their dividend history can be more consistent.
You calculate the Dividend Yield by taking the annual dividend per share
and divide by the stock’s price.
Dividend Yield = annual dividend per share / stock's price per share

For example, if a company’s annual dividend is $1.50 and the stock

trades at $25, the Dividend Yield is 6%. ($1.50 / $25 = 0.06)

Book Value

Another way to determine a company’s value is to go to the balance

statement and look at the Book Value. The Book Value is simply the
company’s assets minus its liabilities.

Book Value = Assets - Liabilities

In other words, if you wanted to close the doors, how much would be left
after you settled all the outstanding obligations and sold off all the
assets.A company that is a viable growing business will always be worth
more than its book value for its ability to generate earnings and growth.

Book value appeals more to value investors who look at the relationship
to the stock's price by using the Price to Book ratio.

To compare companies, you should convert to book value per share,

which is simply the book value divided by outstanding shares.
 35

Return on Equity

Return on Equity (ROE) is one measure of how efficiently a company

uses its assets to produce earnings. You calculate ROE by dividing Net
Income by Book Value. A healthy company may produce an ROE in the
13% to 15% range. Like all metrics, compare companies in the same
industry to get a better picture.
While ROE is a useful measure, it does have some flaws that can give
you a false picture, so never rely on it alone. For example, if a company
carries a large debt and raises funds through borrowing rather than
issuing stock it will reduce its book value. A lower book value means
you’re dividing by a smaller number so the ROE is artificially higher.
There are other situations such as taking write-downs, stock buy backs, or
any other accounting slight of hand that reduces book value, which will
produce a higher ROE without improving profits.
It may also be more meaningful to look at the ROE over a period of the
past five years, rather than one year to average out any abnormal
numbers.
Given that you must look at the total picture, ROE is a useful tool in
identifying companies with a competitive advantage. All other things
roughly equal, the company that can consistently squeeze out more
profits with their assets, will be a better investment in the long run.
 36

The field of technical analysis is based on three assumptions:

1. The market discounts everything.
2. Price moves in trends.
3. History tends to repeat itself.

The Market Discounts Everything

A major criticism of technical analysis is that it only considers price
movement, ignoring the fundamental factors of the company. However,
technical analysis assumes that, at any given time, a stock's price reflects
everything that has or could affect the company - including fundamental
factors. Technical analysts believe that the company's fundamentals,
along with broader economic factors and market psychology, are all
priced into the stock, removing the need to actually consider these factors
separately. This only leaves the analysis of price movement, which
technical theory views as a product of the supply and demand for a
particular stock in the market.

Price Moves in Trends

In technical analysis, price movements are believed to follow trends. This
means that after a trend has been established, the future price movement
is more likely to be in the same direction as the trend than to be against it.
Most technical trading strategies are based on this assumption.

History Tends To Repeat Itself Another important idea in technical

analysis is that history tends to repeat itself, mainly in terms of price
movement. The repetitive nature of price movements is attributed to
market psychology; in other words, market participants tend to provide a
consistent reaction to similar market stimuli over time. Technical analysis
 37

uses chart patterns to analyze market movements and understand trends.

Although many of these charts have been used for more than 100 years,
they are still believed to be relevant because they illustrate patterns in
price movements that often repeat themselves.

Fundamental vs. Technical Analysis

Technical analysis and fundamental analysis are the two main schools of
thought in the financial markets. As we've mentioned, technical analysis
looks at the price movement of a security and uses this data to predict its
future price movements. Fundamental analysis, on the other hand, looks
at economic factors, known as fundamentals. Let's get into the details of
how these two approaches differ, the criticisms against technical analysis
and how technical and fundamental analysis can be used together to
analyze securities.

The Differences Charts vs. Financial Statements At the most basic level,
a technical analyst approaches a security from the charts, while a
fundamental analyst starts with the financial statements.
 38

RESEARCH METHOLOGY

Research is often described as an active, diligent and systematic process

of inquiry aimed at discovering, interpreting and revising facts. This
intellectual investigation produces a greater understanding of events,
behavior or theories and makes practical applications through laws and
theories. The term research is also used to describe a collection of
information about a particular subject, and is usually associated with
science and scientific method.

BASIC RESEARCH:
Basic research is also called as fundamental or pure research. Its primary
objective is the advancement of knowledge and the theoretical
understanding of the relations among the variables. It is exploratory and
often driven by researcher’s curiosity or interest. It is conducted without
any practical end in mind. Basic research often lays down the foundation
for further applied research.

APPLIED RESEARCH:
Applied research is done to solve specific, practical questions. Its primary
objective is not to gain knowledge for its own sake. It is usually
descriptive in nature. It is almost always done on the basis of basic
research.
As far as equity research is concerned there are two types of research
methods that are followed:
• Fundamental analysis
• Technical analysis
Financial statement analysis is the biggest part of Fundamental analysis
also known as quantitative analysis, it involves looking at historical
 39

performance data to estimate the future performance of stocks whereas

Technical analysis does not care one bit about the value of the company,
it is only interested in the price movements of the company s share in the
market.
This project deals with the fundamental analysis aspect of the equity
research. The researcher in this project has tried to look into the details of
the financial statements of the companies, the environment surrounding
the telecom sector, the latest developments in this regard, the
management discussions on the part of every company and the
government policies concerned with the telecom sector.

DATA COLLECTION:
• Primary data for a project is the first hand information regarding the
project being studied. In this regard the primary data for this project
would be getting the necessary information from the company
management by an interview, telephonic conversation or direct mail.
• Secondary data for a project would be the collection of information
that has a bearing on the outcome of the project from secondary sources
like news, press releases, internet etc.
The data collected for this project was from a secondary source. The data
was complied with the help of sources like News articles, Internet,
Capitaline software. In this research, primary data could not be gathered
as the company officials could not be contacted for a one to one interview
or a telephonic interview.

Research objective: to do analysis IT companies for the purpose of

investment in equity
Type of research design: conclusive
Data collection method:
 40

Primary data: unavailable

Secondary data: the company site and various financial news sites
Research design: it is based on historical performance data.

REAL STATES PRICES: -

Decline in real estate prices has resulted reducing the rental
expenditure thus the industry will grow if the real estate price goes
down.
ATTRITION:-\
Almost every sector in India is facing high rates of attrition these days. A
recent
study revealed that employees leave either because of compensation
reasons or due to better growth opportunities. According to NASSCOM,
Indian IT-ITES industry recorded US$ 39.6 billion in revenues in 2006-
07. The revenue of US$ 49-50 billion has been projected in 2007-08 at a
growth rate of 24-27 per cent. The IT industry's contribution to GDP was
4.8 per cent in 2005-06
Though the IT/ITES sector is booming, it is constantly facing high
attrition rates of 25% - 30%. Even the big brands are also facing the same
problem. Below are the details of attrition rates of various players
in IT sector. According to the survey conducted by BES and Data Quest,
Sierra Atlantic recorded highest attrition rate (29%) followed by Kanbay
with 25% and Accel Frontline with 20 per cent.

ECONOMIC ATTRACTION:-
There is a lot of economic attraction towards Share Market due to
low cost advantage and other factors. India, with its low cost advantage
and emergence of several private players, represents the fastest growing
 41

market. Further the geographical location of India serves it the advantage

of being exactly halfway round the world from the US west coast, which
is another reason why India is preferred destination of many big brands.
India’s development and contribution in world’s information technology
sector is of highest reputation. Cities like Bangalore have become the
favorite(most preferred) destinations of all the big banners like HSBC,
Dell, Microsoft, GE, Hewlett Packard, and several Indian multi national
firms like Infosys Technologies, Wipro, and Micro land who have set up
their offices in the city. It is because the city offers good infrastructure,
with large floor space and great telecom facilities. This can be judged on
the basis of the high growth statistics of India and the changing outlook
of the companies towards India.
It is because of this growth many popular brands that have not yet build
up there rigid offices in the country are making it fast to have a
destination in India too. For example, Sun Microsystems, a global IT
major, announced in Bangalore to double the present workforce of the
company's Sun India Engineering Center (IEC) from the present 1000 to
2000 in the next two years time. IEC, which is the largest R&D center for
Sun outside the US, would also focus on developing products in India to
suit the needs of the Indian market, which would be benchmarked
globally.
Also, the presence of a large number of Indians, especially engineers, in
the US gave India an easy entry into the US software market.

SOCIAL FACTORS
These are social factors affecting IT industry, which ranges from
employee right, language barriers, race nationality of company or other
issues. English language being widely spoken in India has help in
fostering the industry’s relationship and interaction in India and on the
 42

global stage. India is one of the few countries to have an increasing share
of working population; since there is great availability of both skilled and
unskilled labor force. Great number of institute and universities offer IT
Course creating room for availability of IT professional at lower cost
since there is job competition. India has to produces great numbers of IT
professional each year to meet its demand. India continue to produce IT
professionals each year, this has help industry for IT professionals
inwards. Industries have to consider the type of services the software is
meant for, age difference of users, life style of the different countries of
supply. It should be noted that there will always be difference in client
behaviours which is supported by the fact that different customers have
different taste.

SOCIAL ISSUES;-
Should Industry be concern with the issue of global warming? Yes it is
affected by many government laws regarding it like in china, where
company with great amount of carbon emission are charge great amount
of tax. Likewise being a major player in the global IT market Infosys has
introduces measure to help in the reduction of carbon emission by trying
to reduce its water consumption, electricity utilization, carbon emission
and partnering with other companies in troubleshooting this global
dilemma
 43

EDUCATION:-
There are large number of universities and institutes in India offering IT
education. And there are large numbers of students which ever year
passed these courses and join the IT industry. The Indian labor is not only
cheap but is technically skilled too to the world-class level. It is due to the
Indian Education System that includes in its course curriculum the
practical knowledge of the latest technology that is developed in world
along with the fluency in English Language that imparts compatibility in
an Indian technician to communicate and work throughout the world.

CAREER PROSPECTS
In the year 2006-07, the industry hired approximately 3, 80,000 people.
Out of these, the ITeS sector hired 2, 00,000 people and the rest were
taken by IT sector. The recruitment trends of some IT giants are given
below: TCS- 35,000 Infosys- 30,000 Wipro-28,000 Satyam-20,000 Some
of the areas of specialization in the IT Industry are-
Designing Research and Development in Peripheral Integration Product
Quality Control and Reliability Testing Computer Manufacturing
Maintenance Service System Developing /Programming /Software
Engineering Networking Application Programming EDP/ E- Commerce
Enterprise Resource Planning (ERP) Database Warehousing and
Management
Operating jobs, Computer operators, Data Entry WORKING AGE
POPULATION:-
Working age population also affects the industry a lot because every
person has different value, lifestyle, attitude, and also the satisfaction
level.
 44

TECHNOLOGICAL FACTORS;-
TELEPHONY
Cellular mobile telephony tariffs in India are the lowest in the world.
A comparison of Indian cellular tariffs vis-à-vis the tariffs prevailing in
comparative emerging economies in South America & Asia-Pacific
region, clearly brings out the affordability of Indian cellular mobile
telephone services.
NEW IT TECHNOLOGY:-
With the evolution of SOA and semantic web services, enterprise solution
heeds to the limitations of conventional enterprise systems by providing
data convergence and concept reutilization with intelligence. Web2.O
represents the next transition in the evolution of web applications; they
promise to restore the richness, interactivity and usability lacking in many
web applications.
CAD:-
Computer-aided design (CAD) is the use of a wide range of computer-
based tools that assist engineers, architects and other design professionals
in their design activities. It is the main geometry authoring tool within the
Product Lifecycle Management process and involves both software and
sometimes special-purpose hardware. Current packages range from 2D
vector based drafting systems to 3D solid and surface modellers.
LEGAL ASPECTS AND POLICIES
This speedy growth of Share Market is undoubtedly due to the efforts of
Indian government and the other developments that took in the other parts
of the globe.
IT Act 2000:
India became the 12th nation in the world to adopt a cyber law during
2000.
• From the perspective of e-commerce in India, the IT Act 2000 and its
 45

provisions Contain many positive aspects. Firstly, the implications of

these provisions for the e- businesses would be that email would now be a
valid and legal form of communication in our country that can be duly
produced and approved in a court of law.
• Companies shall now be able to carry out electronic commerce using
the legal infrastructure provided by the Act.
• Digital signatures have been given legal validity and sanction in the
Act.
• The Act throws open the doors for the entry of corporate companies in
the business of being Certifying Authorities for issuing Digital Signatures
Certificates.
• The Act now allows Government to issue notification on the web thus
heralding e- governance.
• The Act enables the companies to file any form, application or any other
document with any office, authority, body or agency owned or controlled
by the appropriate Government in electronic form by means of such
electronic form as may be prescribed by the appropriate Government.
• The IT Act also addresses the important issues of security, which are so
critical to the success of electronic transactions. The Act has given a legal
definition to the concept of secure digital signatures that would be
required to have been passed through a system of a security procedure, as
stipulated by the Government at a later date.
• Under the IT Act, 2000, it shall now be possible for corporate to have a
statutory remedy in case if anyone breaks into their computer systems or
network and causes damages or copies data. The remedy provided by the
Act is in the form of monetary damages, not exceeding Rs. 1 crore.
 46

Indian Copyright Act:

The copyright of computer software is protected under the provisions of
Indian Copyright Act 1957. Major changes to Indian Copyright Law were
introduced in 1994 and came into effect from 10 May 1995. Copyright
Act clearly explained:
• The rights of a copyright holder
• Position on rentals of software
• The rights of the user to make backup copies
• Most importantly the amendments imposed heavy punishment and fines
for infringement of copyright of software.
Income Tax
Deduction under sections 10A/ 10B of Income tax Act, 1961 (“IT Act”)
in respect of profits derived from export of computer software. Following
undertakings are eligible to claim deduction in respect of profits derived
from export of computer software under the provisions of sections 10A/
10B of the IT Act:
• Existing units which commenced operations prior to April 1, 2000 and
claimed deduction under the provisions of erstwhile sections 10A/ 10B,
can continue to claim such deduction under the provisions of newly
substituted sections 10A/ 10B for the unexpired period of ten consecutive
assessment years. Deduction would continue to be available in case of
corporate re-organizations by way of amalgamation or demerger.
Depreciation on computers and computer software at 60 percent As per
the provisions of the IT Act, annual depreciation on computers and
computer software can be claimed at the rate of 60 percent of written
down value at the beginning of the relevant financial year for income tax
purposes. Therefore, under the written down value method, 84 percent of
cost of computers and software can be depreciated in first 2 years.
 47

CONCLUSION

 Moral Finance is a stable and sturdy growth company, which

mostly rely on equity capital hence they will perform on a regular
basis to provide good return to investors. Hence people who dose
not want to worry about his investment he has a choice to invest in
Moral Finance .
 Moral Finance is a value driven company who are known by the
innovative methods business hence they try to keep the investors
happy by giving good returns but with a risk .a person dose not
worry about the risk and aim for high returns is ideal choice of
investor.
 Moral Finance is also a top company in regards of investment but
they does not give much consideration to investors of equity
shares. They are very careful while using there resources in order
to. Safeguard there future
 48

BIBLIOGRAPHY
WEBSITES:
www.rathi.com
www.investopedia.com
www.bseindia.com
www.nseindia.com
www.moneycontrol.com
www.indiastudychannel.com

BOOKS:
Investment Analysis and Portfolio Management- Prasanna Chandra.