Chapter No. 1: Introduction: Sector Securities Listed in Bombay Stock Exchange" With Reference To

CHAPTER NO.
1 : INTRODUCTION
The market for long term securities like bonds, equity stocks and preferred
stocks is divided into primary market and secondary market. 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. In the secondary market, the investors can sell or buy
securities. Stock markets predominantly deal in the equity shares. Well
regulated and active stock market promotes capital formation. The health of
the economy is reflected by the growth of the stock market. Stock broking is
a growing industry in India. The main reason is that Indian economy is one
of the strongest in the world. As a result of that both foreign and domestic
investors are interested in investing in Indian stock market.
The topic selected for the study is “Security Analysis of selected power
sector securities listed in Bombay Stock Exchange” with reference to
Motilal Oswal securities Ltd, Mumbai.
The study is done for the purpose of conducting fundamental analysis and
technical analysis of leading securities in the stock market. In the stock
market share price of companies are determined by the demand and supply
forces operating in the market. These demand and supply forces in turn are
influenced by a number of fundamental factors as well as certain
psychological or emotional factors. The combined impact of all these
factors is reflected in the share price movement. The price movements of
securities follow systematic and certain consistent patterns. Past movements
in the prices of shares help to identify trends and pattern. It is useful for the
prediction of future price movements. The companies selected are NTPC,
RELIANCE, POWERGRID, NHPC, TATAPOWER and ADANI POWER.
Security analysis is conducted by analyzing both the fundamental and

technical aspects. The technical analysis includes bar chart, Moving
Average & RSI (Relative Strength Index).
Security analysis
An examination and evaluation of the various factors affecting the value

of a security is known as Security analysis. Security analysis refers to the
analysis of tradable financial instruments. Financial instruments can be
classified into debt securities, equities, or some hybrid of the two, futures
contracts and tradable credit derivatives are sometimes included. Security
analysis is typically divided into fundamental analysis, which relies upon
the examination of fundamental business factors such as financial
statements, and technical analysis, which focuses upon price trends and
momentum Two analytical models When the objective of the analysis is to
determine what stock to buy and at what price, there are two basic
methodologies
Fundamental analysis maintains that markets may misprice a security in

the short run but that the "correct" price will eventually be reached. Profits
can be made by trading the mispriced security and then waiting for the
market to recognize its "mistake" and re-price the security. Technical
analysis maintains that all information is reflected already in the stock
price, so fundamental analysis is a waste of time. Trends 'are your friend'
and sentiment changes predate and predict trend changes. Investors'
emotional responses to price movements lead to recognizable price chart
patterns. Technical analysis does not care what the 'value' of a stock is.
Their price predictions are only extrapolations from historical price
patterns.
Investors can use both these different but somewhat complementary methods
for stock picking. Many fundamental investors use techniques for deciding
entry and exit points. Many technical investors use fundamentals to limit their
universe of possible stock to 'good' companies
Fundamental analysis
Fundamental analysis of a business involves analyzing its financial

statements and health, its management and competitive advantages, and its
competitors and markets. When applied to futures and forex, it focuses on the
overall state of the economy, interest rates, production, earnings, and
management. When analyzing a stock, futures contract, or currency using
fundamental analysis there are two basic approaches one can use; bottom up
analysis and top down analysis. The term is used to distinguish such analysis
from other types of investment analysis, such as quantitative analysis and
technical analysis.A method of security valuation which involves examining
the company's financials and operations, especially sales, earnings, growth
potential, assets, debt, management, products, and competition. Fundamental
analysis takes into consideration only those variables that are directly related
to the company itself, rather than the overall state of the market or technical
analysis data. The end goal of performing fundamental analysis is to produce
a value that an investor can compare with the security's current price in hopes
of figuring out what sort of position to take with that security
Fundamental analysis is performed on historical and present data, but with

the goal of making financial forecasts. There are several possible
objectives:
! To conduct a company stock valuation and predict its probable price
evolution,
! To make a projection on its business performance,
! To evaluate its management and make internal business decisions,
! To calculate its credit risk
Tools for fundamental analysis
For fundamental analysis, the following ratios are used:

EPS = PAT / No of equity shares
DPS = Amount declared as dividend / No.
of equity shares
Pay out ratio = DPS / EPS
ROE = PAT / Net worth
P/E ratio = MPS / EPS
P/E Average = Average of the P/E range
Current ratio = Current assets / Current liabilities
Debt- Equity ratio = Debt capital / Owner’s capital
Interest coverage ratio = EBIT / Interest
N/P Margin = PAT / Net sales
TECHNICAL ANALYSIS
Technical analysis is a study of the market data in terms of factors

affecting supply and demand schedules, namely, prices, volume of trading,
etc. The technical analysis believes that share prices are determined by the
demand and supply forces operating the market. These demand and supply
forces are in turn influenced by a number of fundamental factors as well as
certain psychological and emotional factors. The combined impact of all
these factors is reflected in the share price movement. The technical
analysis therefore concentrates on the movement of share price. Technical
analysis is the name given to forecasting techniques that utilize historical
share price data.
Technical analysis is a method of evaluating securities by analyzing

statistics generated by market activity, such as past prices and volume.
Technical analysts do not attempt to measure a security's intrinsic value, but
instead use charts and other tools to identify patterns that can suggest future
activity. Technical analysts believe that the historical performance of stocks
and markets are indications of future performance.
TOOLS OF TECHNICAL ANALYSIS
! Relative Strength Index

! Simple Moving Average
! Line Chart
! Bar Chart
Qualitative Analysis
In this section the various stock exchanges have been compared on the
following parameters;
1. Market Capitalization  
2. number of listed securities
3. listing agreements
4. circuit filters
5. settlement  
These parameters are used to look at selected important aspects of any

stock exchange, viz., the market capitalization gives an idea about the size
of the respective exchanges; whereas the number of listed securities acts as
an indicator for the volume and liquidity of any exchange. The listing
agreements take care of the governance issue, while circuit filters give an
insight into the risk management framework of the said exchange. Finally,
the efficiency of a stock exchange has been measured in terms of its
settlement process.
Market Capitalization
Market capitalization is the measure of corporate size of a country. It shows the

current stock price multiplied by the number of outstanding shares. It is
commonly referred to as Market cap. It is calculated by multiplying the
number of common shares with the current price of those shares. This term is
often confused with capitalization, which is the total amount of funds used to
finance a firm's balance sheet and is calculated as market capitalization plus
debt (book or market value) plus preferred stock. While there are no strong
definitions for market cap categorizations, a few terms are frequently used to
group companies based on its capitalization. The table below shows the market
capitalization of various stock markets in the world.
Listed Securities
Listing in a stock exchange refers to the admission of the securities of the
company for trade dealings in a recognized stock exchange. The securities may
be of any public limited company, Central or State Government, quasi-
governmental and other financial institutions/corporations, municipalities, etc.
Securities of any company are listed in a stock exchange to provide liquidity to
the securities, to mobilize savings and to protect the interests of the investors.
India has the highest number of companies listed in the stock market. Out of
this, about 75 % of the companies are listed with the Bombay Stock Exchange.
After India, United States has the highest number of companies listed.
Eligibility Criteria for New companies (IPOs)
Paid Up capital: Not less than 10 Crores Market Capitalization: Not less than
25 Crores At least three years track record:
• The company has not been referred to the Board for Industrial and Financial  
Reconstruction (BIFR).  
• The networth of the company has not been wiped out by the accumulated
losses resulting in a negative networth.  
• The company has not received any winding up petition accepted by a court.  
• ‘Promoters’ mean one or more persons with a minimum 3 years’ experience of

each of them in the same line of business and shall be holding at least 20% of
the post issue equity share capital individually or severally  
• No disciplinary action by other stock exchanges and regulatory authorities in

past three years.  
Existing Companies listed on other stock exchanges  
Paid up Capital: Not less than 10 Crores  

Market Capitalization: Not less than 25 crores. 
Minimum Listing Requirements for companies listed on other stock exchanges.
The company should have minimum issued and paid up equity capital of Rs. 3
crores. The Company should have profit making track record for last three
years.  
Minimum net worth of Rs. 20 crores  
Minimum market capitalization of the listed capital should be at least two
times of the paid up capital.  
BSE
 
Scrip wise Price Bands  
1. For scrips (53 scrips) on which derivative products are available and
scrips which are included in indices on which derivative products are
available, there is no circuit filter. However, the Exchange has imposed
dummy circuit fitters on these scrips to avoid punching error, if any.  
2. Other Scrips which are not included in above-mentioned category have a
circuit filter limit of 20%.  
Market Wide Circuit Breakers  
In addition to the above-stated price bands on individual scrips, SEBI has
decided to implement index based market wide circuit breakers system
with effect from July 02, 2001.The circuit breakers are applicable at three
stages of the index movement either way at 10%, 15% and 20%. These
circuit breakers will bring about a coordinated trading halt in both Equity
and Derivative market.  
The market wide circuit breakers can be triggered by movement of either
BSE SENSEX or the NSE NIFTY, whichever is breached earlier. The
percentage movements are calculated on the closing index value of the
quarter. These percentages are translated into absolute points of index
variation (rounded off to the nearest 25 points in case of SENSEX). At the
end of each quarter, these absolute points of index variations are revised
and made applicable for the next quarter. The absolute points of SENSEX
variation triggering market wide circuit breaker for a  
INDUSTRY PROFILE
Capital Market
The market where investment funds like bonds, equities and
mortgages are traded is known as the capital market. The primal role of the
capital market is to channelize investments from investors who have surplus
funds to the ones who are running a deficit. The capital market offers both
long term and overnight funds. The financial instruments that have short or
medium term maturity periods are dealt in the money market whereas the
financial instruments that have long maturity periods are dealt in the capital
market. The different types of financial instruments that are traded in the
capital markets are equity instruments, credit market instruments, insurance
instruments, foreign exchange instruments, hybrid instruments and
derivative instruments.
A capital market is a market for securities (both debt and equity),
where business enterprises (companies) and governments can raise long-
term funds. It is defined as a market in which money is lent for periods
longer than a year, as the raising of short-term funds takes place on other
markets (e.g., the money market). The capital market includes the stock
market (equity securities) and the bond market (debt).
Capital markets consist of
1 Primary market
2 Secondary markets
Primary market
The primary market is that part of the capital markets that deals with the
issuance of new securities. Companies, governments or public sector
institutions can obtain funding through the sale of a new stock or bond
issue. This is typically done through a syndicate of securities dealers. The
process of selling new issues to investors is called underwriting. In the
case of a new stock issue, this sale is an initial public offering (IPO).
Dealers earn a commission that is built into the price of the security
offering, though it can be found in the prospectus.
The primary markets are where new stock and bonds issues are sold (via
underwriting) to investors. The secondary markets are where existing
securities are sold and bought from one investor or trader to another,
usually on a securities exchange, over the counter, or elsewhere.
Features of primary markets are:
o This is the market for new long term equity capital. The primary
market is the market where the securities are sold for the first time.
Therefore it is also called the new issue market (NIM).
o In a primary issue, the securities are issued by the company directly to

investors.
o The company receives the money and issues new security certificates
to the investors.
o Primary issues are used by companies for the purpose of setting up

new business or for expanding or modernizing the existing business.
o The primary market performs the crucial function of facilitating

capital formation in the economy.
o The new issue market does not include certain other sources of new
long term external finance, such as loans from financial institutions.
Borrowers in the new issue market may be raising capital for
converting private capital into public capital; this is known as "going
public."
o The financial assets sold can only be redeemed by the original holder.
Methods of issuing securities in the primary market are:
1 Initial public offering;
2 Rights issue (for existing companies);
An initial public stock offering (IPO) referred to simply as an "offering"

or "flotation," is when a company issues common stock or shares to the
public for the first time. They are often issued by smaller, younger
companies seeking capital to expand, but can also be done by large
privately-owned companies looking to become publicly traded.
A rights issue is offered to all existing shareholders individually and

may be rejected, accepted in full or accepted in part. Rights are often
transferable, allowing the holder to sell them on the open market. A right
to a share is generally issued on a ratio basis (e.g. one-for-three rights
issue). Because the company receives shareholders' money in exchange
for shares, a rights issue is a source of capital.
Secondary market
The secondary market, also known as the aftermarket, is the financial

market where previously issued securities and financial instruments such
as stock, bonds, options, and futures are bought and sold. The term
"secondary market" is also used to refer to the market for any used goods
or assets, or an alternative use for an existing product or asset where the
customer base is the second market (for example, corn has been
traditionally used primarily for food production and feedstock, but a
second- or third- market has developed for use in ethanol production).
Under a secondary market offering or seasoned equity offering of shares to

raise money, a company can opt for a rights issue to raise capital. The rights
issue is a special form of shelf offering or shelf registration. With the issued
rights, existing shareholders have the privilege to buy a specified number of
new shares from the firm at a specified price within a specified time. A rights
issue is in contrast to an initial public offering (primary market offering),
where shares are issued to the general public through market exchanges. With
primary issuances of securities or financial instruments, or the primary
market, investors purchase these securities directly from issuers such as
corporations issuing shares in an IPO or private placement, or directly from
the federal government in the case of treasuries.
After the initial issuance, investors can purchase from other investors in the
secondary market.The secondary market for a variety of assets can vary from
fragmented to centralized, and from illiquid to very liquid. The major stock
exchanges are the most visible example of liquid secondary markets - in this
case, for stocks of publicly traded companies. . Exchanges provide a
centralized, liquid secondary market for the investors who own stocks that
trade on those exchanges. Most bonds and structured products trade “over the
counter,” or by phoning the bond desk of one’s broker-dealer.
Functions of Secondary market
Secondary marketing is vital to an efficient and modern capital market. In

the secondary market, securities are sold by and transferred from one
investor or speculator to another. It is therefore important that the
secondary market be highly liquid (originally, the only way to create this
liquidity was for investors and speculators to meet at a fixed place
regularly; this is how stock exchanges originated, see History of the Stock
Exchange). As a general rule, the greater the number of investors that
participate in a given marketplace, and the greater the centralization of
that marketplace, the more liquid the market.
Fundamentally, secondary markets mesh the investor's preference for

liquidity (i.e., the investor's desire not to tie up his or her money for a
long period of time, in case the investor needs it to deal with unforeseen
circumstances) with the capital user's preference to be able to use the
capital for an extended period of time
Stock Exchanges
Stock exchanges are open markets that trade financial assets. Whether
associated with a company or acting as an individual, a stock exchange is
the place where stocks are bought and sold. There are a number of major
stock exchanges around the world and each of these plays a part in
determining the overall financial and economic condition of any
economy. Stock exchanges deal with a number of financial instruments
such as stocks, bonds and equities. Both corporate and government bonds
are traded in stock exchanges. Equities include popular investment
options, rights issues, bonus issues, and all other forms of shares and
stocks. The actual trading of stocks takes place through mediators such as
financial advisors, brokerage houses, and stockbrokers A stock exchange,
(formerly a securities exchange) is a corporation or mutual organization
which provides "trading" facilities for stock brokers and traders, to trade
stocks and other securities. Stock exchanges also provide facilities for the
issue and redemption of securities as well as other financial instruments
and capital events including the payment of income and dividends. The
securities traded on a stock exchange include: shares issued by
companies, unit trusts, derivatives, pooled investment products and
bonds. To be able to trade a security on a certain stock exchange, it has to
be listed there. Usually there is a central location at least for
recordkeeping, but trade is less and less linked to such a physical place, as
modern markets are electronic networks, which gives them advantages of
speed and cost of transactions. Trade on an exchange is by members only.
The initial offering of stocks and bonds to investors is by definition done
in the primary market and subsequent trading is done in the secondary
market. A stock exchange is often the most important component of a
stock market. Supply and demand in stock markets are driven by various
factors which, as in all free markets, affect the price of stocks (see stock
valuation).
There is usually no compulsion to issue stock via the stock exchange

itself, nor must stock be subsequently traded on the exchange. Such
trading is said to be off exchange or over-the-counter. This is the usual
way that derivatives and bonds are traded. Increasingly, stock exchanges
are part of a global market for securities.
The role of stock exchanges
The main role of a stock exchange is to facilitate the transactions

associated with both the buying and selling of securities. Buyers and
sellers of shares and stocks can track the price changes of securities from
the stock markets in which they operate. The ups and downs of stock
indexes help the investors to speculate on the return on investment (ROI)
of various investment options. Stock exchanges also serve as a source of
capital formation for listed companies. Business entities that are listed in
a particular stock exchange can issue shares to the public and sell those
shares in that market. To take part in these transactions, listed companies
need to abide by the rules and requirements of that market. The stock
exchanges protect the interests of both buyers and sellers by assuring a
timely transfer of money. The participants of a stock market are required
to operate within the specified transaction limits fixed by the regulatory
authority of that stock market Speed and transparency are vital for all
stock market transactions. The companies listed in a stock exchange need
to provide proper guidance regarding business performance and
prospects, mergers and acquisitions, stock prices, dividends and other
information at all times. Investors make their investment decisions based
on the information obtained from these companies, and the comments of
analysts who track those companies.
Bombay Stock Exchange
Bombay Stock Exchange is the oldest stock exchange in Asia with a

rich heritage, now spanning three centuries in its 133 years of existence.
What is now popularly known as BSE was established as "The Native
Share & Stock Brokers' Association" in 1875
Stock Exchanges Operations :
With the help of stockbrokers, the buyers and sellers participating in a

stock market carry out their transactions. The brokers representing selling
parties take their orders to the stock exchange floor and then find brokers
representing parties willing to invest in similar stocks. If both parties
agree to trade at the fixed price, the transaction takes place. The size of
the world stock market was estimated at about $36.6 trillion US at the
beginning of October 2008. The total world derivatives market has been
estimated at about $791 trillion face or nominal value, 11 times the size of
the entire world economy. The value of the derivatives market, because it
is stated in terms of notional values, cannot be directly compared to a
stock or a fixed income security, which traditionally refers to an actual
value. Moreover, the vast majority of derivatives 'cancel' each other out
(i.e., a derivative 'bet' on an event occurring is offset by a comparable
derivative 'bet' on the event not occurring.). Many such relatively illiquid
securities are valued as marked to model, rather than an actual market
price.
The stocks are listed and traded on stock exchanges which are entities of
a corporation or mutual organization specialized in the business of
bringing buyers and sellers of the organizations to a listing of stocks and
securities together
A transaction on a stock exchange must be made between two members

of the exchange — an ordinary person may not walk into the New York
Stock Exchange (for example), and ask to trade stock. Such an exchange
must be done through a broker.
There are three types of stock broking service.
! Execution-only, which means that the broker will only carry out the
client's instructions to buy or sell.
! Advisory dealing, where the broker advises the client on which shares
to buy and sell, but leaves the final decision to the investor.
! Discretionary dealing, where the stockbroker ascertains the client's

investment objectives and then makes all dealing decisions on the
client's behalf
Roles similar to that of a stockbroker include investment advisor, and

financial advisor. A stockbroker may or may not be also an investment
advisor.
Stockbrokers also sometimes or exclusively trade on their own
behalf, as a principal, speculating that a share or other financial instrument
will increase or decline in price. In such cases the term broker makes little
sense and the individuals or firms trading in principal capacity sometimes
call themselves dealers, stock traders or simply traders.
2.2 COMPANY PROFILE
Motilal Oswal Securities Ltd
Motilal Oswal Securities Ltd. (MOSL) was founded in 1987 as a

small sub-broking unit, with just two people running the show. Focus on
customer-first-attitude, ethical and transparent business practices, respect
for professionalism, research-based value investing and implementation of
cutting-edge technology has enabled us to blossom into an almost 2000
member team.
Today firm offering a well diversified financial services and a range of
financial products and services such as Wealth Management, Broking &
Distribution, Commodity Broking, Portfolio Management Services,
Institutional Equities, Private Equity, Investment Banking Services and
Principal Strategies.
Company have a diversified client base that includes retail customers
(including High Net worth Individuals), mutual funds, foreign institutional
investors, financial institutions and corporate clients. company
headquartered in Mumbai and as of June 30th, 2009, had a network
spread over 555 cities and towns comprising 1,308 Business Locations .at
June 30th, 2009, company had 5,57,373 registered customers.
In 2006, the Company placed 9.48% of its equity with two leading
private equity investors based out of the US – New Vernon Private Equity
Limited and Bessemer Venture Partners. The company got listed on BSE
and NSE on September 9, 2007. The issue which was priced at Rs.825 per
share (face value Rs.5 per share) got an overwhelming response and was
subscribed 27.18 times in turbulent market conditions. The issue gave a
return of 21% on the date of listing. As of end of financial year 2008, the
group net worth was Rs.7 bn and market capitalization as of March 31,
2008 was Rs.19 bn.
Credit rating agency Crisil has assigned the highest rating of P1+ to
the Company’s short-term debt program.
Mission of company
To be the most respected and preferred private equity manager in the mid
size corporate segment
Products and services
! Equity
In keeping with its tradition of personalized service, Motilal Oswal
Securities Limited provides Customized Equity Advisory Group to clients
based on their profile. Equity Research is an inherent strength of MOSt.
Converting that research to advice is the main function of Equity Advisory.
The investment ideas identified by the research team are presented and
communicated with conviction to clients by advisory team. MOSt Equity
Advisor proactively helps you take informed equity investment decisions
and build a healthy portfolio giving the best fit to your investment and
trading needs.
! Derivatives
Futures & options are derivatives, which use equity as their
underlying. Hence Equity Advisory Group (EAG) will also act as advisors
for F&O & help take informed decisions while trading in these derivative
instruments. Since derivatives instrument provide good leverage
opportunity, it is a great tool for speculation. Leverage is a double edge
sword for which one requires an equity advisor. The advisors will also help
with various strategies like Bull Spread, Bear Spread, Cover call writing,
hedging strategies etc. This is to help to make better trading returns.
Portfolio management
Motilal Oswal Securities Ltd brings with more than 2 decades of
experience & expertise in equity research and stock broking. Motilal Oswal
Securities Ltd is one of the leading portfolio service providers, with asset
under management worth Rs. 590 Crores.
! Online trading
Clients trade online through “MyBroker platform”. Broker with
complete research support from MOSL which helps the clients to make
right decision at right time. They can choose trading a/c which suits their
trading habit’s & preference and trade anywhere, anytime. Buying and
selling is as easy as click of a button.
Key Features:
! Single platform for multiple exchange BSE & NSE (Cash & F&O),
Mutual Funds & IPO.
! Tick by tick market watch (BSE / NSE / F&O).
! Single window Order placement with instant confirmation.
! Instant funds transfer from any of our 19 listed banks.
! After Market Order (AMO) can place orders in advance before market
opens.
! Call and trade facility.
! Mutual funds
Mutual funds offer the ideal platform to participate in the Equity &
Debt market indirectly through professional management. Mutual funds are
becoming the most popular investment vehicles offering various kinds of
schemes with different investment objectives
! Commodities
Over the years commodities markets have been experiencing
tremendous progress, which is evident from the fact that the trade in this
segment is standing as the boon for the global economy today. The
promising nature of these markets has made them an attractive investment
avenue for investors.
! Initial Public Offerings (IPOs)
Book Building and Fixed Price Issue are the two types of Initial Public
Offerings (IPOs) through which a public company can raise money in the
capital market.In a book building public issue the bids are received at
different price levels and the demand for the issue is built up over a period
of time.
! Motilal Oswal Depository Services (MODES)
Today MODES is available at all business locations of Motilal Oswal.
In terms of number of accounts MODES is the second biggest Depository
Participant in CDSL with over 150,000 accounts. Holder of a MODES
account get recommendations on their holdings based on Motilal Oswal
Research rated the "Most Independent Research - Local Brokerage" by Asia
Money Brokers Poll 2006.
! Marginal funding
Motilal Oswal Financial Services understand needs and help the
trader to meet their liquidity requirements. Company offer Margin
funding to individuals and corporate. Company provide finance for
investment in primary market issues and also possess expertise in
financing for short-term requirements, to buy securities from
secondary markets.
CHAPTER NO. 2 : RESEARCH METHODOLOGY
OBJECTIVES OF THE STUDY
o To study fundamental and technical analysis of securities in the power

sector.
o To evaluate the performance of the company.

o To analyze the movement of stock.
o To evaluate the risk and return of the selected securities.
1.3.2 NEED OF THE STUDY
The capital gains of an investor are on the performance of a particular

company’s stock in the stock market. The stronger the company’s share,
the more profit the investor gets. So it is necessary to ascertain, analyze
and interpret the share of various firms in order to know its position in the
market. Investors can make wise investment with the help of this analysis
Through this project, it tries to point out the company which ensure
maximum return and minimum risk in power sector where in investment
could be made.
1.3.3 SCOPE OF THE STUDY

The study is to analyze the financial strength and future investment
prospective of the key players from power sector of the economy.The
fundamental analysis is to determine the value of the shares. The technical
analysis is to predict the future stock behavior. Rational investors always
focus on maximum return which bears minimum risk. Hence, for them,
well diversified equity funds are the superlative opportunity available for
the investment. .
1.3.4 LIMITATIONS
o Data considered only for past few months.

o Indian capital market is featured by the weak form of efficient market
hypothesis.
o The research will be confined to only 7 securities in the power sector.
Reasearch Type
The segment identified for conducting the study is power Sector in India.
The number of companies selected for the study is Seven. Analytical study
is used to conduct the study.
3.2 Data collection

secondary data is collected from websites, Books and magazines.
3.3 Tools for analysis

o Fundamental Analysis
o Technical Analysis
For fundamental analysis, the following ratios are used:

o EPS
o DPS
o Payout ratio
o ROE
o P/E ratio
o Current ratio
o Debt- Equity ratio
o Interest coverage ratio
o N/P Margin and G/P ratio.
For technical analysis, the following tools are used:

o Relative strength index
o 5 day moving average
o 50 day moving average
o Line chart and candlestick chart
CHAPTER NO. 3 : LITERATURE REVIEW
Aber John(1976) in his study found that numerous empirical studies have
tested the profitability of technical trading rules in a variety of markets for
the purpose of either uncovering profitable trading rules or testing market
efficiency, or both. The technical trading studies simulated only one or two
trading systems. In these studies, although transaction costs were deducted
to compute net returns of technical trading strategies, risk was not
adequately handled, statistical tests of trading profits and data snooping
problems were often disregarded, and out-of-sample verification along with
parameter (trading rule) optimization were not considered in the testing
procedure.
Goodman and John W Peavy (1983) in their study found that there is no
way of making an expected profit by extrapolating past changes in the
futures price, by chart or any other esoteric devices of magic or
mathematics. The market quotation already contains in itself all that can be
known about the future and in that
sense has discounted future contingencies as much as is humanly possible.
Philip O Regan (1988) explained that demonstrated that under a noisy

rational expectations model in which current prices do not fully reveal
private information (signals) because of noise (unobserved current supply of
a risky asset) in the current equilibrium price, historical prices (i.e.,
technical analysis) together with current prices help traders make more
precise inferences about past and present signals than do current prices
alone
Brown and David P (1989) in their article explained that results provide
evidence for a “predictive information link” between non-earnings numbers
and future earnings changes. They indicate that some non-earnings numbers
do contain information useful for predicting future earnings changes that is
not contained in either past or current earnings.
Edward (1992) found that also extends her test to include a “valuation link”
between the predicted future earnings changes and stock returns during the
annual report dissemination period. She finds evidence that this valuation
link does exist. The non-earnings accounting numbers are therefore useful
for predicting both future earnings and returns.
Demark and Thomas R (1994) explained that the history of technical

analysis dates back to at least the 18th century when the Japanese developed
a form of technical analysis known as candlestick charting techniques. This
technique was not introduced to the West until the 1970s.
Hackel and Kenneth S (1996)found that it has been stated that “the task of
research is to discover what information projects future earnings and, from a
financial statement analysis point of view, what information in the financial
statements does this”
Jan R (1998) explained that results show that receivables do provide

incremental information for the prediction of future sales, earnings and
profit margins.
Squires (2000) found that study the value relevance of capital expenditures
for explaining returns beyond the use of current earnings. Their findings
show that changes in the level of capital expenditure were strongly and
positively related to excess returns. This exhibits the fact that current capital
expenditure has good news for the future performance of a firm and
supports the use of capital expenditures for predicting future earnings or
returns.
Thomas Robinson (2002) in their study explained that Fundamental

analysis involves assessing a firm’s equity value based on the analysis of
published financial statements and other information without reference to
the prices at which a firm’s securities trade in the capital markets.
Palepu and Krishna (2004) found that technical analysis has been
extensively used among market participants such as brokers, dealers, fund
managers, speculators, and individual investors in the financial industry. 3
Numerous surveys indicate that practitioners attribute a significant role to
technical analysis. For example, futures fund managers rely heavily on
computer-guided technical trading systems, and about 30% to 40% of
foreign exchange traders around the world believe that technical analysis is
the major factor determining exchange rates in the short-run up to six
months.
Prasanna Chandra (2005) explained that Active portfolio management is

commonly partitioned into two types of activities: market timing, which
requires forecasts of broad-based market movements, and security analysis,
which requires the selection of individual stocks that are perceived to be
underpriced by the market.
V K Bhalla (2006) explained that security analysis Psychological and

Institutional Forces and the Determination of Exchange Rates, Neoclassical
economists, by their own admission, have had a terrible time explaining
foreign-currency prices. In large part, this is due to the fact that they assume
"economic" behavior to be independent of social and cultural influences.
But markets are social institutions. They "organize and guide human social
behavior through sanctions (formal and informal, negative and positive),
mores, norms, status, and shared worldviews". Consequently, explaining
economic exchange requires an understanding of the behavior associated
with the subculture of those in question.
Dhanesh Kumar Khatri (2006) in their article found that a leading technical
analyst, provides a more specific definition: “The technical approach to
investment is essentially a reflection of the idea that prices move in trends
that are determined by the changing attitudes of investors toward a variety
of economic, monetary, political, and psychological forces. The art of
technical analysis, for it is an art, is to identify a trend reversal at a
relatively early stage and ride on that trend until the weight of the evidence
shows or proves that the trend has reversed.”
Stephan H Penman (2007) in his study found that Technical analysis

includes a variety of forecasting techniques such as chart analysis, pattern
recognit ion analysis, seasonality and cycle analysis, and computerized
technical trading systems.However, academic research on technical analysis
is generally limited to techniques that can be expressed in mathematical
forms, namely technical trading systems, although some recent studies
Face value 10
Market capitalization (Cr) 13701
52 week high 70
52 week low 36
attempt to test visual chart patterns using pattern recognition algorithms. A
technical trading system consists of a set of trading rules that result from
parameterizations, and each trading rule generates trading signals (long,
short, or out of market) according to their parameter values. Several popular
technical trading systems are moving averages, channels, and momentum
oscillators.
EPS(Earning per share) 0

Dividend yield % 0
Ran Canetti & IBM Research (2008) explained that Composable Formal
Security Analysis, a security property of a protocol is composable if it
remains intact even when the protocol runs alongside other protocols in the
same system. We describe a method for asserting composable security
properties, and demonstrate its usefulness. In particular, we show how this
method can be used to provide security analysis that is formal, relatively
simple, and still does not make un-justified abstractions of the underlying
cryptographic algorithms in use. It can also greatly enhance the feasibility
of automated security analysis of systems of realistic size.
Prasanna Chandra (2008) in his study he explained that Motivated by an
obvious gap between the widespread use of Bloomberg terminals in the
finance industry and the scant resources available to an instructor on how to
incorporate the available information through the terminal into a finance
course, we illustrate our experience using the terminal in an equity-focused
security analysis and portfolio management course. Our goal is to enable
students inexperienced with the terminal to prepare an analyst report. We
identify the most significant challenges we face and provide the
corresponding solutions. Our results are also applicable to other finance
courses including financial analysis, investments, and student managed
investment fund.
CHAPTER NO. 4 :
DATA ANALYSIS, INTERPRETATION and
PRESENTATION
Analysis of data is a process of inspecting, cleaning, transforming, and

modeling data with the goal of highlighting useful information, suggesting
conclusions, and supporting decision making. Data analysis has multiple
facts and approaches, encompassing diverse techniques under a variety of
names, in different business, science, and social science domains.
ADANI POWER
Table No:4.1.1
Share Price details of Adani Power
for the year ended 2011-2012
Face value 10
52 week high 70
52 week low 36
Interpretation:
The face value of Adani Power is Rs 10 each. Their market capitalization is Rs
13701 cr. The highest value for 52 week is Rs 70 and the low for the same is Rs 36.
Table No:4.1.2
Pay Out Ratio of Adani Power
Dividend yield % 0
Interpretation:
The Earnings Per Share of Adani Power is ‘0’, their dividend yield ratio is also ‘0’.
Table No: 4.1.3

Return on Equity of Adani Power
SHARE CAPITAL 2180

RESERVE AND SURPLUS 3848
NET WORTH 6029
PROFIT AFTER TAX (PAT) -294
RETURN ON NET WORTH (%) -6.35
Interpretation:
The net worth of Adani Power is Rs.6029. their profit after tax is -294 and their
return on net worth is -6.35.
Table No: 4.1.4

Key Ratios of Adani Power
CURRENT RATIO 0.23

DEBT EQUITY RATIO 3.59
GROSS PROFIT RATIO (%) 38.68
NET PROFIT RATIO (%) -9.93
INTEREST COVERAGE RATIO
PRICE EARNING RATIO 0
Interpretation :
The current ratio of Adani Power is .23 and their debt equity ratio is 3.59. the
gross profit ratio is 38.68 percentage and net profit ratio is -9.93 percentage. Their
interest coverage ratio is nil.
Chart No 4.1.1
Line Chart of ADANI POWER
Interpretation:
The share price of Adani power is 50 at the beginning of the study. After that price
move upto 68. The share price now showing bullish trend after the fall from 68 to
40. The upward trend is a good signal to investors
Chart No 4.1.2
Candlestick Chart of ADANI POWER
Interpretation:
The chart shows a positive trend of share price of ADANI POWER after the early
fall of share price during the period of study. The share price of Adani power is 50
at the beginning of the study. After that price move upto 68.
Chart No 4.1.3
Moving Average Chart of ADANI POWER
Interpretation:
5 day moving average of ADANI POWER cut the 50 day moving average twice
during the study period and maintains the critical level. Now it is above the support
line. ADANI POWER shows a positive trend in its share price.
Chart No 4.1.4
RSI Chart of ADANI POWER
Interpretation:
RSI chart of ADANI POWER shows the bullish buying trend of the stock. Stock is
near to the RSI point 70 . it shows the strength of the stock. This stock touch the
70 level twice during the period of study.
RELIANCE POWER
Table No: 4.2.1

Share Price details of Reliance Power
Face value 10
52 week high 111
52 week low 58
Interpretation:
The face value of Reliance Power is Rs 10 each. Their market capitalization is Rs
21164 cr. The highest value for 52 week is Rs 111and the low for the same is Rs
58.
Table No: 4.2.2

Pay Out Ratio of Reliance Power
EPS(Earning per share) 0.38

Dividend yield % 0
Interpretation:
The Earnings Per Share of Reliance Power is .38, their dividend yield ratio is also
‘0’.
Table No: 4.2.3

Return on Equity of Reliance Power
SHARE CAPITAL 2805

NET WORTH 16103
PROFIT AFTER TAX (PAT) 310
RETURN ON NET WORTH (%) 0.85
Interpretation:
The net worth of Reliance Power is Rs.16103. Their profit after tax is 310 and their
return on net worth is .85
Table No: 4.2.4

Key Ratios of Reliance Power
CURRENT RATIO 45.26

GROSS PROFIT RATIO (%) 3OO.62
NET PROFIT RATIO (%) 204.80
INTEREST COVERAGE RATIO 3.25
PRICE EARNING RATIO 198.55
Interpretation :
The current ratio of Reliance Power is 45.26 and their debt equity ratio is 0.05.
The gross profit ratio is 300.62 percentage and net profit ratio is 204.80
percentage. Their interest coverage ratio is 3.25.
Chart No 4.2.1
Line Chart of RELIANCE POWER
Interpretation:
The reliance power stock shows bearish trend in the early stage of study. Now the
movement of stock price shows a recovery trend. Share price of RELIANCE
POWER is 100 at the beginning of the study. After that price down upto 60 level.
Now the stock shows recovery trend from the massive fall.
Chart No 4.2.2
Candlestick Chart of RELIANCE POWER
Interpretation:
The reliance power stock shows down trend in the early stage of study. The stock
price fall from 101 to 60 during the period of study. Now the stock is in recovery
trend.
Chart No 4.2.3
Moving Average Chart of RELIANCE POWER
Interpretation:
Reliance power stock shows negative trend in the early stage. The share price
break 50 DAY MOVING AVERAGE only once during the period of study.Now the
stock price is above the 50 DAY MOVING AVERAGE. It shows positive trend in
the end of study period.
Chart No 4.2.4
RSI Chart of RELIANCE POWER
Interpretation:
RSI chart of Reliance power shows the bullish buying trend . The Stock now
move to the RSI point of 70 . it shows the buying trend of the stok. The stock
down upto 60 point level twice during the period of study.
TATA POWER
Table No: 4.3.1

Share Price details of Tata Power
Face value 1
52 week high 113
52 week low 87
Interpretation:
The face value of Tata Power is Rs 1 each. Their market capitalization is Rs 21583
cr. The highest value for 52 week is Rs 113and the low for the same is Rs 87.
Table No: 4.3.2

Pay Out Ratio of Tata Power

Dividend yield % 1.37
Interpretation:
The Earnings Per Share of Tata Power is 3.97, their dividend yield ratio is also
1.37.
Table No: 4.3.3
Return on Equity of Tata Power
SHARE CAPITAL 237

NET WORTH 11957
Interpretation:
The net worth of Tata Power is Rs.11957. Their profit after tax is 1169 and their
return on net worth is 10.09 percentage.
Table No: 4.3.4

Key Ratios of Tata Power for the year ended 2011-2012
CURRENT RATIO 0.95

Interpretation :
The current ratio of Tata Power is 0.95 and their debt equity ratio is 0.64. The
gross profit ratio is 32.27 percentage and net profit ratio is 13.64 percentage. Their
interest coverage ratio is 4.27.
Chart No 4.3.1
Line Chart of TATA POWER
!
Interpretation:
Tata power stock shows bearish trend in its share price. The stock shows a massive
fall in its share price from 112 to 92 during the study period. First half of study
period the stock shows a positive trend. After that the stock fall upto 90 level. Now
stock trading at the maximum low level.
Chart No 4.3.2
Candlestick chart of TATA POWER
Interpretation:
First half of study period the stock shows a positive trend. After that the stock fall
upto 90 level. Now stock trading at the maximum low level.Tata power stock
shows bearish trend in its share price. The stock shows a massive fall in its share
price from 112 to 92 during the study period.
Chart No 4.3.3
Moving Average Chart of TATA POWER
Interpretation:
5 day moving average of Tata power is below the 50 day moving average line. The
price of this stock is below the support price .The stock price will show a good
trend only after it resist the 50 day moving average line.
Chart No 4.3.4
RSI Chart of TATA POWER
Interpretation:
RSI of TATA POWER is 40 in the last period of study ,it shows the bearish selling
trend of stock. The chart shows negative trend of stock price during the period of
study. The stock only cut 70 point level once during the period of study.
CESC
Table No 4.4.1
Share Price details of CESC for the year ended 2011-2012
Face value 10
52 week high 345
52 week low 252
Interpretation:
The face value of CESC is Rs 10 each. Their market capitalization is Rs 4202 cr.
The highest value for 345 week is Rs 252 and the low for the same is Rs 58.
Table No 4.4.2
Pay Out Ratio of CESC for the year ended 2011-2012

Interpretation:
The Earnings Per Share of CESC is 49.46, their dividend yield ratio is also 1.48
percentage.
Table No 4.4.3
Return on Equity of CESC for the year ended 2011-2012
SHARE CAPITAL 125

NET WORTH 6011
Interpretation:
The net worth of CESC is Rs.6011. Their profit after tax is 554 and their return on
net worth is 12.10
Table No 4.4.4
Key Ratios of CESC for the year ended 2011-2012
CURRENT RATIO 2.12

Interpretation :
The current ratio of CESC is 2.12 and their debt equity ratio is 0.67. The gross
profit ratio is 27.80 percentage and net profit ratio is 11.65 percentage. Their
Chart No 4.4.1
Line Chart of CESC
Interpretation:
CESC stock shows bullish trend in its share price. The chart shows the strength of
the stock in its share price. The CESC stock now trading at 330 level after the
recovery from 270.
Chart No 4.4.2
Candlestick Chart of CESC
Interpretation:
The chart shows the trend of share price CESC. In the last stage, the stock shows
possative trend in its price. Now the stock trading at the maximum level.
Chart No 4.4.3
Moving Average Chart of CESC
Interpretation:
Share price of CESC once cut the support and it lead to a fall in its price. The
support prices for the stock are 315 and 288. Now the share price is above the 50
day moving average line. The stock shows bullish trend in its price.
Chart No 4.4.4
RSI Chart of CESC
Interpretation:
RSI of CESC shows positive buying trend of stock. RSI of stock is now above the
70 level, shows the bullish trend in the stock price. The company only reached 30
point level twice during the period of study.
NHPC
Table No 4.5.1
Share Price details of NHPC for the year ended 2011-2012
Face value 10
52 week high 29
52 week low 14
Interpretation:
The face value of NHPC is Rs 10 each. Their market capitalization is Rs 24601 cr.
Table No 4.5.2
Pay Out Ratio of NHPC for the year ended 2011-2012

Interpretation:
The Earnings Per Share of NHPC is 2.09, their dividend yield ratio is also 3.50.
Table No 4.5.3
Return on Equity of NHPC for the year ended 2011-2012
SHARE CAPITAL 12300

NET WORTH 26353
Interpretation:
The net worth of NHPC is Rs.26353. Their profit after tax is 2771 and their return
on net worth is 10.88
Table No 4.5.4
Key Ratios of NHPC for the year ended 2011-2012
CURRENT RATIO 1.41

Interpretation :
The current ratio of NHPC is 1.41 and their debt equity ratio is 0.63. The gross
Chart No 4.5.1
Line Chart of NHPC
Interpretation:
During the period of study, the share price trend is downward. The share price falls
from 29 to 18. The first half of the study the stock price shows upward trend after
share price reached Rs 30, the share price down sharply upto Rs 20. Now the stock
trading at Rs 20.
Chart No 4.5.2
Candlestick Chart of NHPC
Interpretation
The chart shows the bearish movement of stock during the period of study. The
first half of the study the stock price shows upward trend after share price reached
Rs 30, the share price down sharply upto Rs 20.
Chart No 4.5.3
Moving Average Chart of NHPC
Interpretation:
The chart shows the bearish trend of NHPC stock. The stock now moves below the
50 Day Moving average. The massive fall of share price from 29 to 18 can’t
recover in short time.
Chart No 4.5.4
RSI Chart of NHPC
Interpretation:
RSI chart shows bearish selling trend of stock. RSI point of last period shows 34
point, it give the clear-cut idea of negative movement of that particular stock.
POWERGRID
Table No 4.6.1
Share Price details of Powergrid
Face value 10
52 week high 124.45
52 week low 101.2
Interpretation:
The face value of POWERGRID is Rs 10 each. Their market capitalization is Rs
52084 cr. The highest value for 52 week is Rs 124.45 and the low for the same is
Rs 101.2.
Table No 4.6.2
Pay Out Ratio of Powergrid for the year ended 2011-2012

Interpretation:
The Earnings Per Share of POWERGRID is 9, their dividend yield ratio is also
1.87.
Table No 4.6.3
Return on Equity of Powergrid for the year ended 2011-2012
SHARE CAPITAL 4629

NET WORTH 23487
Interpretation:
The net worth of POWERGRID is Rs.23487. Their profit after tax is 3254 and
their return on net worth is 14.50
Table No 4.6.1
Key Ratios of Powergrid for the year ended 2011-2012
CURRENT RATIO 0.74

Interpretation :
The current ratio of POWERGRID is 0.74 and their debt equity ratio is 2.10. The
gross profit ratio is 90.81 percentage and net profit ratio is 32.43 percentage. Their
Chart No 4.6.1
Line Chart of POWERGRID
!
Interpretation:
The share price of Powergrid shows a bullish trend during the last period of study.
The chart shows negative trend of price in the early period. The upward trend in
last period is good signal to investors.
Chart No 4.6.2
Candlestick Chart of POWERGRID
!
Interpretation:
RSI of powergrid stock is 70 above during the 9th period, after that it come down
into 45 level. 9th period is the idele time to buy POWERGRID stock.The 10th perid
shows 45 point level.that doesn’t show eihter a possative or a negative trend.
NTPC
Table No 4.7.1
Share Price details of NTPC for the year ended 2011-2012
Face value 10
52 week high 175
52 week low 136
Interpretation:
The face value of NTPC is Rs 10 each. Their market capitalization is Rs 127763 cr.
Table No 4.7.2
Pay Out Ratio of NTPC for the year ended 2011-2012

Interpretation:
The Earnings Per Share of NTPC is 13.75, their dividend yield ratio is also 2.58.
Table No 4.7.3
Return on Equity of NTPC for the year ended 2011-2012
SHARE CAPITAL 8245

NET WORTH 73291
Interpretation:
The net worth of NTPC is Rs.73291. Their profit after tax is 9223 and their return
on net worth is 13.07
Table No 4.7.4
Key Ratios of NTPC for the year ended 2011-2012
CURRENT RATIO 2.10

Interpretation :
The current ratio of NTPC is 2.10 and their debt equity ratio is 0.66. The gross
Chart No 4.7.1
Line chart of NTPC
Interpretation:
The stock price NTPC falls in every rise. The stock shows negative trend in its
price in the early stage. The stock price fall from 170 to 140 during the time of
study. Now the stock trading at 150 level.
Chart No 4.7.2
Candlestick chart of NTPC
Interpretation:
NTPC stock price shows a down trend in the early stage of study.The stock shows
a recovery trend in the last stage. The stock price NTPC falls in every rise. Now
the stock trading at 150 level.
Chart No 4.7.3
Moving Average chart of NTPC
Interpretation:
5 day moving average of NTPC cut twice the resistance line of 50 day moving
average. The stock shows positive trend in its price. The support price of NTPC is
149. If the stock loss its support price it may lead to a fall in its price.
Chart No 4.7.4
RSI chart of NTPC
Interpretation:
RSI of NTPC stock shows 30 point level in 10th period of study. It shows bearish
selling trend of that particular stock.RSI of 9th period is above the 70 point level,
so 9th period is idle time to buy that particular stock
FINDINGS
o Table No 4.2.4 shows that the profitability ratios are high in

RELIANCE POWER while considering other securities selected for
the study.
o Table No 4.1.3 shows ADANI POWER have negative return on

equity.
o Table No 4.1.1 indicate that the Current share price of ADANI

POWER is affordable one to investors and it is low risk scrip.
o Table No 4.3.4 shows the Liquidity ratios are affordable in TATA

POWER than any other stocks under study.
o Table No 4.4.2 shows that the CESC have high EPS (49.46 rupees)
than other stocks followed by NTPC .(13.75 rupees)
o Table No 4.7.3 shows the RETURN ON NETWORTH high in power

grid followed by NTPC
o Table No 4.5.2 shows the Dividend yield percentage high in NHPC

stock
o Chart No 4.4.4 shows the CESC and ADANI POWER stock shows a
bullish trend as per RSI chart.
o Chart No 4.3.3 and 4.5.3 shows that the TATA POWER, and NHPC,
stocks now trading below the critical line of 50 day moving average.
o Table No 4.3.1 shows Share price of TATA POWER shows negative

trend during the study period.
o Chart No 4.1.3 shows FIVE DAY MOVING AVERAGE shows a

bullish trend in ADANI POWER, RELIANCE POWER & CESC
stocks.
o MOVING AVERAGE shows mixed trend in all the stocks selected for
the study,so we can’t predict the share price trend of power sector as a
whole.
CHAPTER NO. 5 :
SUGGESTIONS
o Fundamentals of all power stock are not strong, as per the financial
statement year ended 2012
o Movement of TATA POWER, and NHPC shows a weaker trend. The
stocks now trading below the critical line so that an investor can move
from these stocks.
o ADANI POWER, RELIANCE and CESC shows bullish trend in its
share price and it is advisory to hold these shares.
o Investor can buy CESC stock in a long term prospective.
o It is better to book profit on NTPC & POWER GRID stocks even
though they trading above the 50 day moving average.(RSI Chart
shows bearish trend).
o It is advisory to an investor, should not depend only on one tool,
rather one has gone for other chart patterns to get confirmation for buy
or sell signal.
oThe risk is common for all securities. The scrip that is having low
price may also be subject to high risk. The main reason is that market
is unpredictable. So the investor must invest carefully. Since the risk
is involved in every scrip, greater emphasize is given to return in each
investment
CONCLUSIONS
The study deals with share and share trading gives a general idea about
the analysis of stocks. The analysis carried on two basis, Fundamental
analysis and technical analysis. Technical analysis shows a short term trend
based on historical data and fundamental analysis helpful for the decision
making for long term investment. From the analysis it is found that the
charts prepared on the basis of the share price, with the support of technical
tools shows all the trends and variations as interpreted in the theory. In the
analysis using moving average it is found that if the price is lying above the
moving average, the scrip is in a bullish trend if the price lying below the
moving average the scrip is in bearish trend. Technical analysis ignores the
actual nature of the company. Technical analysis is based solely on the chart
that is to say price and volume information. The investor has to invest
wisely on the scrip which gives high return with most possible risk.

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Chapter No. 1: Introduction: Sector Securities Listed in Bombay Stock Exchange" With Reference To

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CHAPTER NO.

Security analysis is conducted by analyzing both the fundamental and

An examination and evaluation of the various factors affecting the value

Fundamental analysis maintains that markets may misprice a security in

Fundamental analysis of a business involves analyzing its financial

Fundamental analysis is performed on historical and present data, but with

! To make a projection on its business performance,

! To evaluate its management and make internal business decisions,

! To calculate its credit risk

Tools for fundamental analysis

For fundamental analysis, the following ratios are used:

Technical analysis is a study of the market data in terms of factors

Technical analysis is a method of evaluating securities by analyzing

TOOLS OF TECHNICAL ANALYSIS

! Relative Strength Index

2. number of listed securities

These parameters are used to look at selected important aspects of any

Market capitalization is the measure of corporate size of a country. It shows the

Eligibility Criteria for New companies (IPOs)

• ‘Promoters’ mean one or more persons with a minimum 3 years’ experience of

• No disciplinary action by other stock exchanges and regulatory authorities in

Existing Companies listed on other stock exchanges

Paid up Capital: Not less than 10 Crores

Capital markets consist of

Features of primary markets are:

o In a primary issue, the securities are issued by the company directly to

o Primary issues are used by companies for the purpose of setting up

o The primary market performs the crucial function of facilitating

Methods of issuing securities in the primary market are:

1 Initial public offering;

2 Rights issue (for existing companies);

An initial public stock offering (IPO) referred to simply as an "offering"

A rights issue is offered to all existing shareholders individually and

The secondary market, also known as the aftermarket, is the financial

Under a secondary market offering or seasoned equity offering of shares to

Functions of Secondary market

Secondary marketing is vital to an efficient and modern capital market. In

Fundamentally, secondary markets mesh the investor's preference for

There is usually no compulsion to issue stock via the stock exchange

The role of stock exchanges

The main role of a stock exchange is to facilitate the transactions

Bombay Stock Exchange

Bombay Stock Exchange is the oldest stock exchange in Asia with a

Stock Exchanges Operations :

With the help of stockbrokers, the buyers and sellers participating in a

A transaction on a stock exchange must be made between two members

There are three types of stock broking service.

! Discretionary dealing, where the stockbroker ascertains the client's

Roles similar to that of a stockbroker include investment advisor, and

2.2 COMPANY PROFILE

Motilal Oswal Securities Ltd

Motilal Oswal Securities Ltd. (MOSL) was founded in 1987 as a

Products and services

OBJECTIVES OF THE STUDY

o To study fundamental and technical analysis of securities in the power

o To evaluate the performance of the company.

1.3.2 NEED OF THE STUDY

The capital gains of an investor are on the performance of a particular

1.3.3 SCOPE OF THE STUDY

o Data considered only for past few months.

3.2 Data collection

3.3 Tools for analysis

For fundamental analysis, the following ratios are used:

Existing Companies listed on other stock exchanges  

Paid up Capital: Not less than 10 Crores  