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Infrastructure Industry
Infrastructure Industry in India have been experiencing a rapid growth in
its different sectors with the development of urbanization and increasing
involvement of foreign investments in this field. The Indian government has
taken initiatives to develop the infrastructure sector, with major
emphasis on construction, engineering, IT, entertainment, textiles, food,
and utility to name some.

Reports of different segments in Infrastructure Industry:

The section of the construction industry of Infrastructure Industry in

India reported an estimated growth of 6.78% year-on-year in 2006. The
industry in India is highly fragmented and has about 300,000 construction
companies operating nationwide. The government has allowed 100%
foreign equity in the construction industry. Among the major
infrastructure projects are the US$7-8bn India-Iran gas pipeline, the
US$2.8bn construction of two power plants, and the US$2.3bn power
project in Tamil Nadu.

Heavy Engineering Industry is one of the largest segments of

Infrastructure Industry in India. It includes a whole range of industries
such as Heavy Electricity Machinery, Turbines, Generators, Transformers,
Switchgears, Textile Machinery etc. all of which are essential infrastructure
for the development of industrial sector in India. For proper industrial
development the utility commodities like the switchgear and control gear,
MCBs, air circuit breakers, switches, rewireable fuses and HRC fuses with
their respective fuse bases, holders and starters are produced. Construction
machinery, equipment for irrigation projects, diesel engines, tractors, and
transport vehicles, cotton textile and sugar mill machinery are other
manufactured objects of great demand of the Infrastructure Industry.
Some major areas where these are in use are the multi-crore projections for
power generation like nuclear power stations, petrochemical complexes,
and chemical plants integrated steel plants, non-ferrous metal units etc. In
India BHEL is the largest engineering and manufacturing enterprise in the
energy related infrastructure sector, manufacturing over 180 products
under 30major product groups and catering the core sectors of the Indian
Economy. Under this project to better understand the Industry I have used
Fundamental tools to make it more authentic and meaningful.

An economy-industry-company (E.I.C) approach has been followed under

Fundamental Analysis which covers effect of Recession, the impact of

inflation, FDI’s, Export, and GDP etc. on infrastructure Industry. The

Industry Analysis has been done with the help of SWOT analysis and

industry life cycle. For Company Analysis as a part of Fundamental tool we

have undergone with the comparative analysis of HCC ltd one of the leading


LlOYD along with the help of ratio analysis. The fundamental aspect consists

of financial and Non-Financial analysis of these companies.

At the end conclusion and recommendations have been specified so as to

make the project work more meaningful and purposeful.


No. Name of the concept Page No.

Introduction 1

Need of the study 2

Objectives of the study 3

Scope of the study 4

Methodology of the study 5

Limitations of the study 6

II Review of Literature 7-22

III Industry Profile 23-42

IV Company Profile 43-52

V Data analysis and interpretation 53-73

Findings, Suggestions and

VI 74-80

VII Bibliography 81

India is a developing country. Nowadays many people are interested to
invest in financial markets especially on equities to get high returns, and to
save tax in honest way. Equities are playing a major role in contribution of
capital to the business from the beginning. Since the introduction of shares
concept, large numbers of investors are showing interest to invest in stock

In an industry plagued with skepticism and a stock market increasingly difficult to

predict and contend with, if one looks hard enough there may still be a genuine aid for
the Day Trader and Short Term Investor.

The price of a security represents a consensus. It is the price at which one person agrees
to buy and another agrees to sell. The price at which an investor is willing to buy or sell
depends primarily on his expectations. If he expects the security's price to rise, he will
buy it; if the investor expects the price to fall, he will sell it. These simple statements
are the cause of a major challenge in forecasting security prices, because they refer to
human expectations. As we all know firsthand, humans expectations are neither easily
quantifiable nor predictable. If prices are based on investor expectations, then knowing
what a security should sell for (i.e., fundamental analysis) becomes less important than
knowing what other investors expect it to sell for. That's not to say that knowing what a
security should sell for isn't important--it is. But there is usually a fairly strong
consensus of a stock's future earnings that the average investor cannot disprove

Fundamental analysis and technical analysis can co-exist in peace and complement
each other. Since all the investors in the stock market want to make the maximum
profits possible, they just cannot afford to ignore either fundamental or technical

To start any business capital plays major role. Capital can be acquired in
two ways by issuing shares or by taking debt from financial institutions or
borrowing money from financial institutions. The owners of the company
have to pay regular interest and principal amount at the end.

Stock is ownership in a company, with each share of stock representing a

tiny piece of ownership. The more shares you own, the more of the
company you own. The more shares you own, the more dividends you earn
when the company makes a profit. In the financial world, ownership is
called “Equity”.

Advantages of selling stock:

• A company can raise more capital than it could borrow.

• A company does not have to make periodic interest payments to
• A company does not have to make principal payments

Stock/shares play a major role in acquiring capital to the business in return

investors are paid dividends to the shares they own. The more shares you
own the more dividends you receive.

The role of equity analysis is to provide information to the market. An

efficient market relies on information: a lack of information creates
inefficiencies that result in stocks being misrepresented (over or under
valued). This is valuable because it fills information gaps so that each
individual investor does not need to analyze every stock thereby making
the markets more efficient.


• Analyze earnings persistence,its determinants,and its relevance for

earnings forecasting.
• Analyze the impact of qualitative factors on industry’s and company’s
• Comparative analysis of tough competitors through fundamental
• Suggesting as to which company’s shares would be best for an
investor to invest.
• Describe equity valuation and its relevance for financial
• Explain recasting and adjusting of earnings and earnings
components for analysis.
• Explain earnings forecasting,its mechanics,and its effectiveness
in assessing company performance.
• Analyze interim reports and consider their value in monitoring
and revising earnings estimates.


Fundmental analysis is the corner stone of investing.Infact ,some would say
that you aren’t really investing if you aren’t performing fundamental
analysis.Because the subject is so broad,however,its’ tough to know

where to start.

Fundamental analysis helps to assess the fair market value of equity shares

by examining the assets,earnings prospects, cash flow projections, and

dividend potential.

Here the study conducted at SHARE KHAN LTD… is made to

analyze the price fluctuating in the stock market.For this purpose I
have choosen the major sector i.e INFRASTRUCTURE.Five top
construction companies are considered from this sector for the
study purpose.

. The project is based on tools like fundamental analysis and ratio analysis.

Further, the study is based on information of last five years.

The analysis is made by taking into consideration five constructuction


• The scope of the study is limited for a period of five years.

• The scope is limited to only the fundamental analysis of the chosen


Research design or research methodology is the procedure of collecting,

analyzing and interpreting the data to diagnose the problem and react to

the opportunity in such a way where the costs can be minimized and the

desired level of accuracy can be achieved to arrive at a particular


The methodology used in the study for the completion of the project and

the fulfillment of the project objectives.

The sample of the stocks for the purpose of collecting secondary data has

been selected on the basis of Random Sampling. The stocks are chosen in

an unbiased manner and each stock is chosen independent of the other

stocks chosen. The stocks are chosen from the automobile sector.
The sample size for the number of stocks is taken as 5 for

fundamental analysis of stocks as fundamental analysis is very

exhaustive and requires detailed study.


• This study has been conducted purely to understand Equity analysis

for investors.

• The study is restricted to five companies based on Fundamental


• The study is limited to the companies having equities.

• Detailed study of the topic was not possible due to limited size of the

• There was a constraint with regard to time allocation for the research

study i.e. for a period of 45 days.

• Suggestions and conclusions are based on the limited data of five




Investment success is pretty much a matter of careful selection and timing

of stock purchases coupled with perfect matching to an individuals risk

tolerance. In order to carry out selection, timing and matching actions an

investor must conduct deep security analysis.

Investors purchase equity shares with two basic objectives;

1. To make capital profits by selling shares at higher prices.

2. To earn dividend income.

These two factors are affected by a host of factors. An investor has to

carefully understand and analyze all these factors. There are basically two

approaches to study security prices and valuation i.e. fundamental analysis

and technical analysis

The value of common stock is determined in large measure by the

performance of the firm that issued the stock. If the company is healthy and

can demonstrate strength and growth, the value of the stock will increase.

When values increase then prices follow and returns on an investment will

increase. However, just to keep the savvy investor on their toes, the mix is
complicated by the risk factors involved. Fundamental analysis examines all

the dimensions of risk exposure and the probabilities of return, and merges

them with broader economic analysis and greater industry analysis to

formulate the valuation of a stock.


Fundamental analysis is a method of forecasting the future price

movements of a financial instrument based on economic, political,

environmental and other relevant factors and statistics that will affect the

basic supply and demand of whatever underlies the financial instrument. It

is the study of economic, industry and company conditions in an effort to

determine the value of a company’s stock. Fundamental analysis typically

focuses on key statistics in company’s financial statements to determine if

the stock price is correctly valued. The term simply refers to the analysis of

the economic well-being of a financial entity as opposed to only its price


Fundamental analysis is the cornerstone of investing. The basic philosophy

underlying the fundamental analysis is that if an investor invests re.1 in

buying a share of a company, how much expected returns from this

investment he has.
The fundamental analysis is to appraise the intrinsic value of a security. It

insists that no one should purchase or sell a share on the basis of tips and

rumors. The fundamental approach calls upon the investors to make his buy

or sell decision on the basis of a detailed analysis of the information about

the company, about the industry, and the economy. It is also known as

“top-down approach”. This approach attempts to study the economic

scenario, industry position and the company expectations and is also known

as “economic-industry-company approach (EIC approach)”.


Fundamental analysis is a method of forecasting the future price

movements of a financial instrument based on economic, political,

environmental and other relevant factors and statistics that will affect the

basic supply and demand of whatever underlies the financial instrument. It

is the study of economic, industry and company conditions in an effort to

determine the value of a company’s stock. Fundamental analysis typically

focuses on key statistics in company’s financial statements to determine if

the stock price is correctly valued. The term simply refers to the analysis of

the economic well-being of a financial entity as opposed to only its price


Fundamental analysis is the cornerstone of investing. The basic philosophy

underlying the fundamental analysis is that if an investor invests re.1 in

buying a share of a company, how much expected returns from this

investment he has.

The fundamental analysis is to appraise the intrinsic value of a security. It

insists that no one should purchase or sell a share on the basis of tips and

rumors. The fundamental approach calls upon the investors to make his buy

or sell decision on the basis of a detailed analysis of the information about

the company, about the industry, and the economy. It is also known as

“top-down approach”. This approach attempts to study the economic

scenario, industry position and the company expectations and is also known

as “economic-industry-company approach (EIC approach)”.

Thus the EIC approach involves three steps:

1. Economic analysis

2. Industry analysis

3. Company analysis

The level of economic activity has an impact on investment in many ways. If

the economy grows rapidly, the industry can also be expected to show rapid

growth and vice versa. When the level of economic activity is low, stock

prices are low, and when the level of economic activity is high, stock prices

are high reflecting the prosperous outlook for sales and profits of the firms.

The analysis of macro economic environment is essential to understand the

behavior of the stock prices.

The commonly analyzed macro economic factors are as follows:

Gross Domestic Product (GDP): GDP indicates the rate of growth of the

economy. It represents the aggregate value of the goods and services

produced in the economy. It consists of personal consumption expenditure,

gross private domestic investment and government expenditure on goods

and services and net exports of goods and services. The growth rate of

economy points out the prospects for the industrial sector and the return

investors can expect from investment in shares. The higher growth rate is

more favorable to the stock market.

Savings and investment: It is obvious that growth requires investment

which in turn requires substantial amount of domestic savings. Stock

market is a channel through which the savings are made available to the

corporate bodies. Savings are distributed over various assets like equity

shares, deposits, mutual funds, real estate and bullion. The savings and

investment patterns of the public affect the stock to a great extent.

Inflation: Along with the growth of GDP, if the inflation rate also increases,

then the real growth would be very little. The effects of inflation on capital

markets are numerous. An increase in the expected rate of inflation is

expected to cause a nominal rise in interest rates. Also, it increases

uncertainty of future business and investment decisions. As inflation

increases, it results in extra costs to businesses, thereby squeezing their

profit margins and leading to real declines in profitability.

Interest rates: The interest rate affects the cost of financing to the firms.

A decrease in interest rate implies lower cost of finance for firms and more

profitability. More money is available at a lower interest rate for the brokers

who are doing business with borrowed money. Availability of cheap funds

encourages speculation and rise in the price of shares.

Tax structure: Every year in March, the business community eagerly

awaits the Government’s announcement regarding the tax policy.

Concessions and incentives given to a certain industry encourage

investment in that particular industry. Tax relief’s given to savings

encourage savings. The type of tax exemption has impact on the

profitability of the industries.

FOREIGN DIRECT INVESTMENT:(FDI)or foreign investment refers to the net

inflows of investment to acquire a lasting management intrest (10 percent
or more of voting stock) in an enterprice operating in an economy other
than that of the investor. It is the sum of equity capital,reinvestments of
earning ,other long term capital,and short term capital as shown in the
balance of payments.

Infrastructure facilities: Infrastructure facilities are essential for the

growth of industrial and agricultural sector. A wide network of

communication system is a must for the growth of the economy. Regular

supply of power without any power cut would

boost the production. Banking and financial sectors also should be sound

enough to provide adequate support to the industry. Good infrastructure

facilities affect the stock market favorably.


An industry is a group of firms that have similar technological structure of

production and produce similar products and Industry analysis is a type of

business research that focuses on the status of an industry or an industrial

sector (a broad industry classification, like "manufacturing"). Irrespective of specific

economic situations, some industries might be expected to perform better, and share prices in these industries may

not decline as much as in other industries. This identification of economic and industry specific factors influencing

share prices will help investors to identify the shares that fit individual expectations

Industry Life Cycle: The industry life cycle theory is generally attributed

to Julius Grodensky. The life cycle of the industry is separated into four well

defined stages.

• Pioneering stage: The prospective demand for the product is

promising in this stage and the technology of the product is low. The

demand for the product attracts many producers to produce the

particular product. There would be severe competition and only

fittest companies survive this stage. The producers try to develop

brand name, differentiate the product and create a product image. In

this situation, it is difficult to select companies for investment

because the survival rate is unknown.

• Rapid growth stage: This stage starts with the appearance of

surviving firms from the pioneering stage. The companies that have

withstood the competition grow strongly in market share and

financial performance. The technology of the production would have

improved resulting in low cost of production and good quality

products. The companies have stable growth rate in this stage and

they declare dividend to the shareholders. It is advisable to invest in

the shares of these companies.

• Maturity and stabilization stage: the growth rate tends to

moderate and the rate of growth would be more or less equal to the
industrial growth rate or the gross domestic product growth rate.

Symptoms of obsolescence may appear in the technology. To keep

going, technological innovations in the production process and

products should be introduced. The investors have to closely monitor

the events that take place in the maturity stage of the industry.

• Decline stage: demand for the particular product and the earnings

of the companies in the industry decline. It is better to avoid

investing in the shares of the low growth industry even in the boom

period. Investment in the shares of these types of companies leads to

erosion of capital.

Growth of the industry: The historical performance of the industry in

terms of growth and profitability should be analyzed. The past variability in

return and growth in reaction to macro economic factors provide an insight

into the future.

Nature of competition: Nature of competition is an essential factor that

determines the demand for the particular product, its profitability and the

price of the concerned company scrips. The companies' ability to withstand

the local as well as the multinational competition counts much. If too many

firms are present in the organized sector, the competition would be severe.
The competition would lead to a decline in the price of the product. The

investor before investing in the scrip of a company should analyze the

market share of the particular company's product and should compare it

with the top five companies.

SWOT analysis: SWOT analysis represents the strength, weakness,

opportunity and threat for an industry. Every investor should carry out a

SWOT analysis for the chosen industry. Take for instance, increase in

demand for the industry’s product becomes its strength, presence of

numerous players in the market, i.e. competition becomes the threat to a

particular company. The progress in R & D in that industry is an opportunity

and entry of multinationals in the industry is a threat. In this way the factors

are to be arranged and analyzed.


In the company analysis the investor assimilates the several bits of

information related to the company and evaluates the present and future

values of the stock. The risk and return associated with the purchase of the

stock is analyzed to take better investment decisions. The present and

future values are affected by a number of factors.

Competitive edge of the company: Major industries in India are

composed of hundreds of individual companies. Though the number of

companies is large, only few companies control the major market share.

The competitiveness of the company can be studied with the help of the


• Market share: The market share of the annual sales helps to

determine a company’s relative competitive position within the

industry. If the market share is high, the company would be able to

meet the competition successfully. The companies in the market

should be compared with like product groups otherwise, the results

will be misleading.

• Growth of sales: The rapid growth in sales would keep the

shareholder in a better position than one with stagnant growth rate.

Investors generally prefer size and growth in sales because the larger
size companies may be able to withstand the business cycle rather

than the company of smaller size.

• Stability of sales: If a firm has stable sales revenue, it will have

more stable earnings. The fall in the market share indicates the

declining trend of company, even if the sales are stable. Hence the

stability of sales should be compared with its market share and the

competitor’s market share.

Earnings of the company: Sales alone do not increase the earnings but

the costs and expenses of the company also influence the earnings.

Further, earnings do not always increase with increase in sales. The

company’s sales might have increased but its earnings per share may

decline due to rise in costs. Hence, the investor should not only depend on

the sales, but should analyze the earnings of the company.

Financial analysis: The best source of financial information about a

company is its own financial statements. This is a primary source of

information for evaluating the investment prospects in the particular

company’s stock. Financial statement analysis is the study of a company’s

financial statement from various viewpoints. The statement gives the

historical and current information about the company’s operations.

Historical financial statement helps to predict the future and the current

information aids to analyze the present status of the company. The two
main statements used in the analysis are Balance sheet and Profit and Loss


The balance sheet is one of the financial statements that companies

prepare every year for their shareholders. It is like a financial snapshot, the

company's financial situation at a moment in time. It is prepared at the year

end, listing the company's current assets and liabilities. It helps to study the

capital structure of the company. It is better for the investor to avoid a

company with excessive debt component in its capital structure. From the

balance sheet, liquidity position of the company can also be assessed with

the information on current assets and current liabilities.

Ratio analysis: Ratio is a relationship between two figures expressed

mathematically. Financial ratios provide numerical relationship between two

relevant financial data. Financial ratios are calculated from the balance

sheet and profit and loss account. The relationship can be either expressed

as a percent or as a quotient. Ratios summarize the data for easy

understanding, comparison and interpretations.

Ratios for investment purposes can be classified into profitability ratios,

turnover ratios, and leverage ratios. Profitability ratios are the most popular

ratios since investors prefer to measure the present profit performance and

use this information to forecast the future strength of the company. The
most often used profitability ratios are return on assets, price earnings

multiplier, price to book value, price to cash flow, and price to sales,

dividend yield, return on equity, present value of cash flows, and profit


a) Return on Assets (ROA)

ROA is computed as the product of the net profit margin and the total asset

turnover ratios.

ROA = (Net Profit/Total income) x (Total income/Total Assets)

This ratio indicates the firm's strategic success. Companies can have one of

two strategies: cost leadership, or product differentiation. ROA should be

rising or keeping pace with the company's competitors if the company is

successfully pursuing either of these strategies, but how ROA rises will

depend on the company's strategy. ROA should rise with a successful cost

leadership strategy because the company’s increasing operating efficiency.

An example is an increasing, total asset, turnover ratio as the company

expands into new markets, increasing its market share. The company may

achieve leadership by using its assets more efficiently. With a successful

product differentiation strategy, ROA will rise because of a rising profit


b) Return on Investment (ROI)

ROI is the return on capital invested in business, i.e., if an investment Rs 1

crore in men, machines, land and material is made to generate Rs. 25 lakhs

of net profit, then the ROI is 25%. The computation of return on investment

is as follows:

Return on Investment (ROI) = (Net profit/Equity investments) x 100

As this ratio reveals how well the resources of a firm are being used, higher

the ratio, better are the results. The return on shareholder’s investment

should be compared with the return of other similar firms in the same

industry. The inert-firm comparison of this ratio determines whether the

investments in the firm are attractive or not as the investors would like to

invest only where the return is higher.

c) Return on Equity

Return on equity measures how much an equity shareholder's investment is

actually earning. The return on equity tells the investor how much the

invested rupee is earning from the company. The higher the number, the

better is the performance of the company and suggests the usefulness of

the projects the company has invested in.

The computation of return on equity is as follows:

Return on equity = (Net profit to owners/value of the specific


Contribution to the business) x 100

The ratio is more meaningful to the equity shareholders who are invested to

know profits earned by the company and those profits which can be made

available to pay dividend to them.

d) Earnings per Share (EPS)

This ratio determines what the company is earning for every share. For

many investors, earnings are the most important tool. EPS is calculated by

dividing the earnings (net profit) by the total number of equity shares.

The computation of EPS is as follows:

Earnings per share = Net profit/Number of shares outstanding

The EPS is a good measure of profitability and when compared with EPS of

similar other companies, it gives a view of the comparative earnings or

earnings power of a firm. EPS calculated for a number of years indicates

whether or not earning power of the company has increased.

e) Dividend per Share (DPS)

The extent of payment of dividend to the shareholders is measured in the

form of dividend per share. The dividend per share gives the amount of

cash flow from the company to the owners and is calculated as follows:

Dividend per share = Total dividend payment / Number of shares


The payment of dividend can have several interpretations to the

shareholder. The distribution of dividend could be thought of as the

distribution of excess profits/abnormal profits by the company. On the other

hand, it could also be negatively interpreted as lack of investment

opportunities. In all, dividend payout gives the extent of inflows to the

shareholders from the company.

f) Dividend Payout Ratio

From the profits of each company a cash flow called dividend is distributed

among its shareholders. This is the continuous stream of cash flow to the

owners of shares, apart from the price differentials (capital gains) in the

market. The return to the shareholders, in the form of dividend, out of the

company's profit is measured through the payout ratio. The payout ratio is

computed as follows:
Payout Ratio = (Dividend per share / Earnings per share) * 100

The percentage of payout ratio can also be used to compute the percentage

of retained earnings. The profits available for distribution are either paid as

dividends or retained internally for business growth opportunities. Hence,

when dividends are not declared, the entire profit is ploughed back into the

business for its future investments.

g) Dividend Yield

Dividend yield is computed by relating the dividend per share to the market

price of the share. The market place provides opportunities for the investor

to buy the company's share at any point of time. The price at which the

share has been bought from the market is the actual cost of the investment

to the shareholder. The market price is to be taken as the cum-dividend

price. Dividend yield relates the actual cost to the cash flows received from

the company. The computation of dividend yield is as follows

Dividend yield = (Dividend per share / Market price per share) *


High dividend yield ratios are usually interpreted as undervalued companies

in the market. The market price is a measure of future discounted values,

while the dividend per share is the present return from the investment.

Hence, a high dividend yield implies that the share has been under priced in

the market. On the other hand a low dividend yield need not be interpreted

as overvaluation of shares. A company that does not pay out dividends will

not have a dividend yield and the real measure of the market price will be

in terms of earnings per share and not through the dividend payments.

h) Price/Earnings Ratio (P/E)

The P/E multiplier or the price earnings ratio relates the current market

price of the share to the earnings per share. This is computed as follows:

Price/earnings ratio = Current market price / Earnings per share

This ratio is calculated to make an estimate of appreciation in the value of a

share of a company and is widely used by investors to decide whether or

not to buy shares in a particular company. Many investors prefer to buy the

company's shares at a low P/E ratio since the general interpretation is that

the market is undervaluing the share and there will be a correction in the
market price sooner or later. A very high P/E ratio on the other hand implies

that the company's shares are overvalued and the investor can benefit by

selling the shares at this high market price.

i) Debt-to-Equity Ratio

Debt-Equity ratio is used to measure the claims of outsiders and the owners

against the firm’s assets.

Debt-to-equity ratio = Outsiders Funds / Shareholders Funds

The debt-equity ratio is calculated to measure the extent to which debt

financing has been used in a business. It indicates the proportionate claims

of owners and the outsiders against the firm’s assets. The purpose is to get

an idea of the cushion available to outsiders on the liquidation of the firm.


Finance is the pre-requisite for modern business and financial institutions

play a vital role in the economic system. It is through financial markets and

institutions that the financial system of an economy works. Financial

markets refer to the institutional arrangements for dealing in financial

assets and credit instruments of different types such as currency, cheques,

bank deposits, bills, bonds, equities, etc.

Financial market is a broad term describing any marketplace where buyers

and sellers participate in the trade of assets such as equities, bonds,

currencies and derivatives. They are typically defined by having transparent

pricing, basic regulations on trading, costs and fees and market forces

determining the prices of securities that trade.

Generally, there is no specific place or location to indicate a financial

market. Wherever a financial transaction takes place, it is deemed to have

taken place in the financial market. Hence financial markets are pervasive

in nature since financial transactions are themselves very pervasive

throughout the economic system. For instance, issue of equity shares,

granting of loan by term lending institutions, deposit of money into a bank,

purchase of debentures, sale of shares and so on.

In a nutshell, financial markets are the credit markets catering to the

various needs of the individuals, firms and institutions by facilitating buying

and selling of financial assets, claims and services.

Capital Market

The capital market is a market for financial assets which have a long or

indefinite maturity. Generally, it deals with long term securities which have

a period of above one year. In the widest sense, it consists of a series of

channels through which the savings of the community are made available

for industrial and commercial enterprises and public authorities. As a whole,

capital market facilitates raising of capital.

The major functions performed by a capital market are:

1. Mobilization of financial resources on a nation-wide scale.

2. Securing the foreign capital and know-how to fill up deficit in the

required resources for economic growth at a faster rate.

3. Effective allocation of the mobilized financial resources, by directing

the same to projects yielding highest yield or to the projects needed

to promote balanced economic development.

Capital market consists of primary market and secondary market.

Primary market: Primary market is a market for new issues or new

financial claims. Hence it is also called as New Issue Market. It basically

deals with those securities which are issued to the public for the first time.
The market, therefore, makes available a new block of securities for public

subscription. In other words, it deals with raising of fresh capital by

companies either for cash or for consideration other than cash. The best

example could be Initial Public Offering (IPO) where a firm offers shares to

the public for the first time.

Secondary market: Secondary market is a market where existing

securities are traded. In other words, securities which have already passed

through new issue market are traded in this market. Generally, such

securities are quoted in the stock exchange and it provides a continuous

and regular market for buying and selling of securities. This market consists

of all stock exchanges recognized by the government of India.

Money Market

Money markets are the markets for short-term, highly liquid debt

securities. Money market securities are generally very safe investments

which return relatively low interest rate that is most appropriate for

temporary cash storage or short term time needs. It consists of a number of

sub-markets which collectively constitute the money market namely call

money market, commercial bills market, acceptance market, and Treasury

bill market.

Derivatives Market
The derivatives market is the financial market for derivatives, financial

instruments like futures contracts or options, which are derived from other

forms of assets. A derivative is a security whose price is dependent upon or

derived from one or more underlying assets. The derivative itself is merely

a contract between two or more parties. Its value is determined by

fluctuations in the underlying asset. The most common underlying assets

include stocks, bonds, commodities, currencies, interest rates and market

indexes. The important financial derivatives are the following:

• Forwards: Forwards are the oldest of all the derivatives. A forward contract

refers to an agreement between two parties to exchange an agreed quantity of an

asset for cash at a certain date in future at a predetermined price specified in that

agreement. The promised asset may be currency, commodity, instrument etc.

• Futures: Future contract is very similar to a forward contract in all respects

excepting the fact that it is completely a standardized one. It is nothing but a

standardized forward contract which is legally enforceable and always traded on

an organized exchange.

• Options: A financial derivative that represents a contract sold by one party

(option writer) to another party (option holder). The contract offers the buyer

the right, but not the obligation, to buy (call) or sell (put) a security or other

financial asset at an agreed-upon price (the strike price) during a certain period

of time or on a specific date (exercise date). Call options give the option to buy

at certain price, so the buyer would want the stock to go up. Put options give the

option to sell at a certain price, so the buyer would want the stock to go down.
• Swaps: It is yet another exciting trading instrument. Infact, it is the combination

of forwards by two counterparties. It is arranged to reap the benefits arising

from the fluctuations in the market – either currency market or interest rate

market or any other market for that matter.

Foreign Exchange Market

It is a market in which participants are able to buy, sell, exchange and speculate on

currencies. Foreign exchange markets are made up of banks, commercial companies,

central banks, investment management firms, hedge funds, and retail forex brokers and

investors. The forex market is considered to be the largest financial market in the

world. It is a worldwide decentralized over-the-counter financial market for the trading

of currencies. Because the currency markets are large and liquid, they are believed to be

the most efficient financial markets. It is important to realize that the foreign exchange

market is not a single exchange, but is constructed of a global network of computers

that connects participants from all parts of the world.

Commodities Market

It is a physical or virtual marketplace for buying, selling and trading raw or

primary products. For investors' purposes there are currently about 50

major commodity markets worldwide that facilitate investment trade in

nearly 100 primary commodities. Commodities are split into two types: hard

and soft commodities. Hard commodities are typically natural resources

that must be mined or extracted (gold, rubber, oil, etc.), whereas soft
commodities are agricultural products or livestock (corn, wheat, coffee,

sugar, soybeans, pork, etc.)


India Financial market is one of the oldest in the world and is considered to be the

fastest growing and best among all the markets of the emerging economies.

The history of Indian capital markets dates back 200 years toward the end of the 18th

century when India was under the rule of the East India Company. The development of

the capital market in India concentrated around Mumbai where no less than 200 to 250

securities brokers were active during the second half of the 19th century.

The financial market in India today is more developed than many other sectors because

it was organized long before with the securities exchanges of Mumbai, Ahmadabad and

Kolkata were established as early as the 19th century.

By the early 1960s the total number of securities exchanges in India rose to eight,

including Mumbai, Ahmadabad and Kolkata apart from Madras, Kanpur, Delhi,

Bangalore and Pune. Today there are 21 regional securities exchanges in India in

addition to the centralized NSE (National Stock Exchange) and OTCEI (Over the

Counter Exchange of India).

However the stock markets in India remained stagnant due to stringent

controls on the market economy that allowed only a handful of monopolies

to dominate their respective sectors. The corporate sector wasn't allowed

into many industry segments, which were dominated by the state controlled

public sector resulting in stagnation of the economy right up to the early

1990s. Thereafter when the Indian economy began liberalizing and the
controls began to be dismantled or eased out; the securities markets

witnessed a flurry of IPO’s that were launched. This resulted in many new

companies across different industry segments to come up with newer

products and services.

A remarkable feature of the growth of the Indian economy in recent years

has been the role played by its securities markets in assisting and fuelling

that growth with money rose within the economy. This was in marked

contrast to the initial phase of growth in many of the fast growing

economies of East Asia that witnessed huge doses of FDI (Foreign Direct

Investment) spurring growth in their initial days of market decontrol. During

this phase in India much of the organized sector has been affected by high

growth as the financial markets played an all-inclusive role in sustaining

financial resource mobilization. Many PSUs (Public Sector Undertakings) that

decided to offload part of their equity were also helped by the well-

organized securities market in India.

The launch of the NSE (National Stock Exchange) and the OTCEI (Over the

Counter Exchange of India) during the mid 1990s by the government of

India was meant to usher in an easier and more transparent form of trading

in securities. The NSE was conceived as the market for trading in the

securities of companies from the large-scale sector and the OTCEI for those

from the small-scale sector. While the NSE has not just done well to grow

and evolve into the virtual backbone of capital markets in India the OTCEI

struggled and is yet to show any sign of growth and development. The
integration of IT into the capital market infrastructure has been particularly

smooth in India due to the country’s world class IT industry. This has

pushed up the operational efficiency of the Indian stock market to global

standards and as a result the country has been able to capitalize on its high

growth and attract foreign capital like never before.

The regulating authority for capital markets in India is the SEBI (Securities

and Exchange Board of India). SEBI came into prominence in the 1990s

after the capital markets experienced some turbulence. It had to take

drastic measures to plug many loopholes that were exploited by certain

market forces to advance their vested interests. After this initial phase of

struggle SEBI has grown in strength as the regulator of India’s capital

markets and as one of the country’s most important institutions.

Regulations are an absolute necessity in the face of the growing importance

of capital markets throughout the world. The development of a market

economy is dependent on the development of the capital market. The

regulation of a capital market involves the regulation of securities; these

rules enable the capital market to function more efficiently and impartially.

A well regulated market has the potential to encourage additional investors

to partake, and contribute in, furthering the development of the economy.

The chief capital market regulatory authority is Securities and Exchange

Board of India (SEBI).

SEBI is the regulator for the securities market in India. It is the apex body to develop

and regulate the stock market in India It was formed officially by the Government of

India in 1992 with SEBI Act 1992 being passed by the Indian Parliament. Chaired by C

B Bhave, SEBI is headquartered in the popular business district of Bandra-Kurla

complex in Mumbai, and has Northern, Eastern, Southern and Western regional offices

in New Delhi, Kolkata, Chennai and Ahmedabad. In place of Government Control, a

statutory and autonomous regulatory board with defined responsibilities, to cover both

development & regulation of the market, and independent powers has been set up.

The basic objectives of the Board were identified as:

• to protect the interests of investors in securities;

• to promote the development of Securities Market;

• to regulate the securities market and

• For matters connected therewith or incidental thereto.

Since its inception SEBI has been working targeting the securities and is

attending to the fulfillment of its objectives with commendable zeal and

dexterity. The improvements in the securities markets like capitalization

requirements, margining, establishment of clearing corporations etc.

reduced the risk of credit and also reduced the market.

SEBI has introduced the comprehensive regulatory measures, prescribed

registration norms, the eligibility criteria, the code of obligations and the

code of conduct for different intermediaries like, bankers to issue, merchant

bankers, brokers and sub-brokers, registrars, portfolio managers, credit

rating agencies, underwriters and others. It has framed bye-laws, risk

identification and risk management systems for Clearing houses of stock

exchanges, surveillance system etc. which has made dealing in securities

both safe and transparent to the end investor.

Another significant event is the approval of trading in stock indices (like S&P

CNX Nifty & Sensex) in 2000. A market Index is a convenient and effective

product because of the following reasons:

• It acts as a barometer for market behavior;

• It is used to benchmark portfolio performance;

• It is used in derivative instruments like index futures and index

• It can be used for passive fund management as in case of Index


Two broad approaches of SEBI is to integrate the securities market at the

national level, and also to diversify the trading products, so that there is an

increase in number of traders including banks, financial institutions,

insurance companies, mutual funds, primary dealers etc. to transact

through the Exchanges. In this context the introduction of derivatives

trading through Indian Stock Exchanges permitted by SEBI in 2000 AD is a

real landmark.

SEBI has enjoyed success as a regulator by pushing systemic reforms

aggressively and successively (e.g. the quick movement towards making

the markets electronic and paperless rolling settlement on T+2 bases). SEBI

has been active in setting up the regulations as required under law.


Stock Exchanges are an organized marketplace, either corporation or

mutual organization, where members of the organization gather to trade

company stocks or other securities. The members may act either as agents

for their customers, or as principals for their own accounts.

As per the Securities Contracts Regulation Act, 1956 a stock exchange is an

association, organization or body of individuals whether incorporated or not,

established for the purpose of assisting, regulating and controlling business

in buying, selling and dealing in securities.

Stock exchanges facilitate for the issue and redemption of securities and

other financial instruments including the payment of income and dividends.

The record keeping is central but trade is linked to such physical place

because modern markets are computerized. The trade on an exchange is

only by members and stock broker do have a seat on the exchange.

List of Stock Exchanges in India

Bombay Stock Exchange

National Stock Exchange 10. Jaipur

11. Ludhiana
OTC Exchange of India
Regional Stock Exchanges 12. Madhya Pradesh
13. Madras
1. Ahmedabad
14. Magadh
2. Bangalore
15. Mangalore
3. Bhubaneswar
16. Meerut
4. Calcutta
17. Pune
5. Cochin
18. Saurashtra Kutch
6. Coimbatore
19. Uttar Pradesh
7. Delhi
20. Vadodara
8. Guwahati
9. Hyderabad

A very common name for all traders in the stock market, BSE, stands for Bombay

Stock Exchange. It is the oldest market not only in the country, but also in Asia. In

the early days, BSE was known as "The Native Share & Stock Brokers Association."

It was established in the year 1875 and became the first stock exchange in the

country to be recognized by the government. In 1956, BSE obtained a permanent

recognition from the Government of India under the Securities Contracts

(Regulation) Act, 1956.

In the past and even now, it plays a pivotal role in the development of the country's

capital market. This is recognized worldwide and its index, SENSEX, is also tracked

worldwide. Earlier it was an Association of Persons (AOP), but now it is a

demutualised and corporatised entity incorporated under the provisions of the

Companies Act, 1956, pursuant to the BSE (Corporatisation and Demutualization)

Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI).

BSE Vision

The vision of the Bombay Stock Exchange is to "Emerge as the premier Indian stock

exchange by establishing global benchmarks."

BSE Management

Bombay Stock Exchange is managed professionally by Board of Directors. It

comprises of eminent professionals, representatives of Trading Members and the

Managing Director. The Board is an inclusive one and is shaped to benefit from the

market intermediaries participation.

The Board exercises complete control and formulates larger policy issues. The day-

to-day operations of BSE are managed by the Managing Director and its school of

professional as a management team.

BSE Network

The Exchange reaches physically to 417 cities and towns in the country. The

framework of it has been designed to safeguard market integrity and to operate

with transparency. It provides an efficient market for the trading in equity, debt

instruments and derivatives. Its online trading system, popularly known as BOLT, is

a proprietary system and it is BS 7799-2-2002 certified. The BOLT network was

expanded, nationwide, in 1997. The surveillance and clearing & settlement

functions of the Exchange are ISO 9001:2000 certified.

BSE Facts

BSE as a brand is synonymous with capital markets in India. The BSE SENSEX is the

benchmark equity index that reflects the robustness of the economy and finance. It was the –

• First in India to introduce Equity Derivatives

• First in India to launch a Free Float Index

• First in India to launch US$ version of BSE Sensex

• First in India to launch Exchange Enabled Internet Trading Platform

• First in India to obtain ISO certification for Surveillance, Clearing & Settlement

• 'BSE On-Line Trading System’ (BOLT) has been awarded the globally

recognized the Information Security Management System standard


• First to have an exclusive facility for financial training

• Moved from Open Outcry to Electronic Trading within just 50 days

BSE with its long history of capital market development is fully geared to continue its

contributions to further the growth of the securities markets of the country, thus helping India

increases its sphere of influence in international financial markets.


The National Stock Exchange of India Limited has genesis in the report of the

High Powered Study Group on Establishment of New Stock Exchanges, which recommended

promotion of a National Stock Exchange by financial institutions (FI’s) to provide access to

investors from all across the country on an equal footing. Based on the recommendations, NSE

was promoted by leading Financial Institutions at the behest of the Government of India and was

incorporated in November 1992 as a tax-paying company unlike other stock Exchange in the


On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in

April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June

1994. The Capital Market (Equities) segment commenced operations in November 1994 and

operations in Derivatives segment commenced in June 2000.


National Securities Clearing Corporation Ltd. (NSCCL)

It is a wholly owned subsidiary, which was incorporated in August 1995 and

commenced clearing operations in April 1996. It was formed to build confidence in

clearing and settlement of securities, to promote and maintain the short and

consistent settlement cycles, to provide a counter-party risk guarantee and to

operate a tight risk containment system.

It is also a wholly owned subsidiary of NSE and is its IT arm. This arm of the NSE is

uniquely positioned to provide products, services and solutions for the securities

industry. NSE.IT primarily focuses on in the area of trading, broker front-end and

back-office, clearing and settlement, web-based, insurance, etc. Along with this, it

also provides consultancy and implementation services in Data Warehousing,

Business Continuity Plans, Site Maintenance and Backups, Stratus Mainframe

Facility Management, Real Time Market Analysis & Financial News.

India Index Services & Products Ltd. (IISL)

It is a joint venture between NSE and CRISIL Ltd. to provide a variety of indices and

index related services and products for the Indian Capital markets. It was set up in

May 1998. IISL has a consulting and licensing agreement with the Standard and

Poor's (S&P), world's leading provider of investible equity indices, for co-branding

equity indices.

National Securities Depository Ltd. (NSDL)

NSE joined hands with IDBI and UTI to promote dematerialization of securities. This

step was taken to solve problems related to trading in physical securities. It

commenced operations in November 1996.

NSE Facts

• It uses satellite communication technology to energize participation from

around 400 cities in India.

• NSE can handle up to 1 million trades per day.

• It is one of the largest interactive VSAT based stock exchanges in the world.

• The NSE- network is the largest private wide area network in India and the

first extended C- Band VSAT network in the world.

• Presently more than 9000 users are trading on the real time-online NSE


Today, NSE is one of the largest exchanges in the world and still forging ahead. At NSE, we are

constantly working towards creating a more transparent, vibrant and innovative capital market.


OTCEI was incorporated in 1990 as a section 25 company under the companies Act

1956 and is recognized as a stock exchange under section 4 of the securities

Contracts Regulation Act, 1956. The exchange was set up to aid enterprising

promotes in raising finance for new projects in a cost effective manner and to

provide investors with a transparent and efficient mode of trading Modeled along

the lines of the NASDAQ market of USA, OTCEI introduced many novel concepts to

the Indian capital markets such as screen-based nationwide trading, sponsorship of

companies, market making and scrip less trading. As a measure of success of these

efforts, the Exchange today has 115 listings and has assisted in providing capital for

enterprises that have gone on to build successful brands for themselves like VIP

Advanta, Sonora Tiles & Brilliant mineral water, etc.

Need for OTCEI:

Studies by NASSCOM, software technology parks of India, the venture capitals funds

and the government’s IT tasks Force, as well as rising interest in IT, Pharmaceutical,

Biotechnology and Media shares have repeatedly emphasized the need for a

national stock market for innovation and high growth companies.

Innovative companies are critical to developing economics like India, which is

undergoing a major technological revolution. With their abilities to generate

employment opportunities and contribute to the economy, it is essential that these

companies not only expand existing operations but also set up new units. The key

issue for these companies is raising timely, cost effective and long term capital to

sustain their operations and enhance growth. Such companies, particularly those

that have been in operation for a short time, are unable to raise funds through the

traditional financing methods, because they have not yet been evaluated by the

financial world.
Sharekhan is a firm which is working under SSKI (S. S. Kantilal Ishwarlal) Ltd.
SSKI was founded in 1922. SSKI is One of India’s Oldest Brokerage Houses
Having Eight Decades of Experience into:-

 Institutional Broking
 Investment Banking
 Retail Broking
It is one of the Founding members of the Stock Exchange, Mumbai and Pioneer
Institutional Broker.
SSKI Retail Broking:-
SSKI Entered into Retail Broking in 1985. Share khan is the Retail Broking Arm
of the BIG 80 Years old organization i.e. of SSKI and “Sharekhan” is the Brand
Name given to its Retail Business. SSKI carries out its Retail Broking Activities
underSharekhan Brand Name.
Sharekhan is One of India’s Leading Broking Houses. They Provides you a
Complete Life-Cycle of Investment Solutions in Equities, Derivatives,
Commodities & Depository Services.
Sharekhan is having its retail presence across India through –
 Sharekhan Branches & Franchisees
 www.sharekhan.com
Sharekhan Outlets act as Full Service Investment Solutions Provider, providing
you wide range of services like –

 Equity & Derivatives Trading on NSE and BSE

 Online Trading

 Commodities Trading on MCX & NCDEX

 Portfolio Management Services

 Depository Services

 IPO Services

 Wide Range of Customized Research Products

 Uniform Service Standards
The Strength of Sharekhan is in its Specialized & Customized research Products addressing the
investment philosophy of verities of Investors and Traders in the secondary stock market.
Hierarchy of Sharekhan: -

Country Head

Cluster Head
Regional Head
Branch Head
City SalesM anager
Sales Executives

Offerings of the Sharekhan:-

Sharekhan offers both Offline and online trading account. But now a days it
mostly concentrates on online trading account through which a customer can
buy and sell shares in an instant from any part of the globe trough website. It
does not take into account any type of physical restriction of going to the
broker for carrying out a transaction or any type of settlement of payment. It
facilitates the customer a speedy and hassle free transaction. Share khan’s
product consists of a 4-in-1 concept, which integrates:

 D-mat Account
 Trading Account
 Bank Link
 Dial-N-Trade
For doing a trading of shares everyone need D-mat A/C. In his D-mat A/C one can
kept his shares. Then Sharekhan provides a Trading A/C Through this trading
account, a Sharekhan customer can directly transfer his funds from his savings
account i.e. from bank account to Sharekhan to his trading account without any
paper work. He can buy and sell shares from the website and also view the market
prices of the shares he trades on the terminal.
Sharekhan.com allows trading at present only on NSE. BSE trading will be
shortly available. To open an account a customer requires filling up a form
consisting of 12 agreements, a passport size photograph, a residential proof, a
photo id proof and a cheque drawn of respective amount in favor of S. S. Kantilal
Ishwarlal securities Pvt. Ltd. & from 22 March , 2007 cheque is drawn in favor of
Sharekhan LTD. it self.
After opening an account with Sharekhan, a customer will be given User id, Membership
password and trading password, which will enable him to access his account and trade.

Research Team of Sharekhan: -

Research and in-depth knowledge of markets provide better than speculations or reacting to rumors.
Research team provides knowledge to their customers about market condition.
 In morning they provide “Eagle Eye” which tells about how the market will

be in whole day.

 In afternoon they provide “High Noon” which tells that up to that time how

was the market and what about the remaining time what will be the

condition of the market.

 After the market they analyze the market summery of the whole day and

give idea about next day market.

Mobile-N-Trade facility: -

Now Sharekhan is providing the facility that their customers can do trading with the help of their
mobile handset. For tat purpose they have to pay some extra charge to activate that facility.

In now days each and every person is the customer of Sharekhan.
All the Business Man, Shopkeepers, Young Generation i.e. students ,
Adults,Housewife and the person who have money and likes to take risk are the
potential customer of the Sharekhan. The person who likes to invest their money in
share market is also the customer of Sharekhan.
But mostly the customers are divided into two types depending

upon the transactions they do or money they invest in the share market. They

Investoror Traders.The investors are those who Invest their money in the market

once when they have money in excess after fulfilling their needs and wants and the traders are those
who daily do the share transactions as their business and called as Intraday transaction and the
previous is called as Delivery transaction.

Sharekhan is one of the major player in on line Trading. In Mumbai the

main competitors of Sharekhan are ICICI Direct, India bulls, Kotak Securities,

HDFC Securities, Anand Rathi, and Motilal Oswal.

1. Religare Enterprises

2. India Info line




6. Kotak Securities


These are some of the competitors of sharekhan.


Professionally managed companies are those that are managed by

employees. In such companies, the chief executive officer often does not even have
a financial stake in the company. He is at the helm of affairs because of his ability
and experience. The professional manager is a career employee and he remains at
the seat of power so long as he meets his targets. Consequently, professional
managers are result-oriented. They are not necessarily influenced by loyalty to the
company. As a professional he is usually aware of the latest trends in management
philosophy and tries to introduce these. They try to run the company like a lean,
effective machine striving for increased efficiency and productivity. As a
consequence, professionally managed companies are usually well organized,
growth oriented and good performers. The companies that come readily to mind
are ITC, Infosys, HDFC and Hindustan Lever. However, there is often a lack of
long term commitment and sometimes a lack of loyalty. This is because the
professional manager has to step down in time, to retire, and he cannot therefore
enjoy the fruit of his labors for ever. Nor will his sons succeed him although some
may try to see that his happens. He sell his services to the clients, and such
individuals are consequently not usually know for their loyalty. Companies are
now to promote or create commitment offering employees stock options. These
devolve on employees after a specified period of service and are given to them on
performance. The employee thus becomes a part owner and becomes thus involved
in the profitability of the enterprise. Additionally as these devolve on the employee
only after a time, he tends to stay till it does. As these options are given, often
annually, the employee remains with the company for a significant period of time.
It is a win-win situation for both. The company gets the services of a loyal
competent employee. The employee builds his net worth. In many professionally
managed companies there is also a lot of infighting and corporate politics. This is
because managers are constantly trying to climb up the corporate ladder.
The management is open, innovative and also has a strategy. It is prepared
to change when required. It is essentially know where it is going and have a plan of
how to get there. It is receptive to ideas and be dynamic. A company that has many
layers of management and is top heavy tends to be very bureaucratic and
ponderous. There are "many chiefs and few braves". They do not want change and
often stand in the way of change. Their strategy is usually a personal one.

Electronic Contract Note (ECN) :

We are providing the facility of Electronic Contract Note to our clients on their
registered Email Id. The same can also be accessed on this website under Services
We once again reiterate our commitment for providing state-of-the-art technology
and services to our customers so as to add ease and convenience in their day-to-day
Distinct Feature of Equity Back-office on Net :

Sauda Details : You can view your day-to-day transaction details such as Order

No, Trade No, Quantity, Market Rate, Amount etc. To view the same, you need to provide the
transaction date. Alternatively, you can also view your transactions by giving a date range in the
Global Report - I Menu - Sauda (Cash) option.

Terminology is the study of terms and their use — ofwor ds and compound

that are used in specific contexts.

Terminology also denotes a more formal discipline which systematically studies

the labeling or designating ofconcepts particular to one or more subject fields or

domains of human activity, through research and analysis of terms in context, for
the purpose of documenting and promoting correct usage. This study can be
limited to one language or can cover more than one language at the same time
(multilingual terminology, bilingual terminology, and so forth).
Terminology is not connected to Information Retrieval in any way. "Terms" (i.e.
index terms) used in an Information Retrieval context are not the same as "terms"
used in the context of Terminology

An Asset Management Company is the fund house or the company that manages
the money.
The mutual fund is a trust registered under the Indian Trust Act. It is initiated by a
sponsor. A sponsor is a person who acts alone or with a corporate to establish a
mutual fund. The sponsor then appoints an AMC to manage the investment,
marketing, accounting and other functions pertaining to the fund.

The Net Asset Value is the price of a unit of a fund. When a fund comes out with an NFO, it is priced
Rs 10. Later, depending on the value of the investments, this price could rise or fall.

This is a fee that is charged when you buy or sell the units of a fund.
When you buy the units of a fund, you pay a percentage of it as a fee. This is
known as the entry load.
Let's say you are investing Rs 10,000 and the entry load is 2%. That means you
pay Rs 200 as the entry load and Rs 9,800 is invested in the fund.
Now, let's assume you are selling the units of your fund. And the Rs 10,000 you
invested initially is now Rs 15,000. Let's further assume the exit load is 2%. So
you pay Rs 300 and get back Rs 14,700.
Generally, if funds charge an entry load, they will not charge an exit load. Or vice
versa. Only one of the loads is charged. The load is a percentage of the NAV.

This is the term given to all the investments made by the fund as well as the

amount held in cash.


Let's assume a very small mutual fund has an initial investment of 1,000 units and
each unit is worth Rs 10. Hence, the total amount with the fund is Rs 10,000. This
is referred to as the corpus. Later, some other investors invest Rs 2,000. Now the
corpus will be Rs 12,000 (Rs 10,000 + Rs 2,000).
The total amount invested (Rs 12,000) is called the corpus or the total amount
of money invested in the fund.

Assets Under Management is the total value of all the investments currently being
managed by the fund.
Let's say the corpus is Rs 12,000 but, due to a rise in the price of the shares it has
invested in, the value of the units has increased. So the Rs 12,000 invested is now
worth Rs 15,000. This figure is referred to as AUM.
Diversified equity mutual fund

This is a mutual fund that invests in stocks of various companies in various



Equity Linked Saving Schemes are diversified equity mutual funds with a tax

benefit under Section 80C of the Income Tax Act.

To avail of the tax benefit, your money must be locked up for at least three

Balanced fund

A fund that invests in both equity (shares) and debt (fixed return investments) is

known as a balanced fund.

Debt fund

These are funds that invest in fixed return investments like bonds. A liquid fund is one that invests in
money market instruments, these are fixed return investments of a very short tenure.

A New Fund Offering is the term given to a new mutual fund scheme.

A Systematic Investment Plan refers to periodic investing in a mutual fund. Every
month or every three months, the investor will have to commit to putting in a fixed
amount. This will go towards the purchase of units.
Let's say that every month you commit to investing, say, Rs 1,000 in your fund. At
the end of a year, you would have invested Rs 12,000.
If the NAV on the day you invest in the first month is Rs 20, you will get 50 units.
The next month, the NAV is Rs 25. You will get 40 units.
The following month, the NAV is Rs 18. You will get 55.56 units.
So, after three months, you would have 145.56 units. On an average, you would
have paid around Rs 21 per unit. This is because, when the NAV is high, you get
fewer units per Rs 1,000. When the NAV falls, you get more units per Rs 1,000.

SWOT Analysis:

 Global parentage and expertise.  Experience senior management.

 World class technology and


 Strict risk control systems.

 Fundamental and technical


 Multiple products under one roof.


 Less visibility in Indian



 To grab the growing Indian



 Global economic slowdown.

 The Indian capital market is



Infrastructure Industry in India have been experiencing a rapid growth in its
different sectors with the development of urbanization and increasing involvement
of foreign investments in this field. The Indian government has taken initiatives to
develop the infrastructure sector, with major emphasis on construction,
engineering, IT, entertainment, textiles, food, and utility to name some.

To understand this industry for the purpose of investment we need to analyze it by

the following approach:

Fundamental Analysis (E.I.C Approach)

a. Economy analysis

b. Industry analysis

c. Company analysis

Fundamental Analysis

Fundamental analysis is the study of economic, industry and company conditions in

an effort to determine the value of a company s stock. Fundamental analysis

typically focuses on key statistics in company s financial statements to determine if

the stock price is correctly valued.

Most fundamental information focuses on economic, industry and company


The typical approach to analyzing a company involves three basic steps:

1. Determine the condition of the general economy.

2. Determine the condition of the industry.

Economic analysis is the analysis of forces operating the overall economy a country.

Economic analysis is a process whereby strengths and weaknesses of an economy

are analyzed. Economic analysis is important in order to understand exact condition

of an economy.


Year wise comparison of India's GDP

Graph on GDP of India from 2003 to 2011

Graph on Constant GDP of India from 2003 to 2011

India GDP Growth Rate
The Gross Domestic Product (GDP) in India expanded 8.20 percent in the fourth
quarter of 2010 over the same quarter, previous year. From 2004 until 2010, India's
average quarterly GDP Growth was 8.40 percent reaching an historical high of 10.10
percent in September of 2006 and a record low of 5.50 percent in December of
2004. India's diverse economy encompasses traditional village farming, modern
agriculture, handicrafts, a wide range of modern industries, and a multitude of
services. Services are the major source of economic growth, accounting for more
than half of India's output with less than one third of its labor force. The economy
has posted an average growth rate of more than 7% in the decade since 1997,
reducing poverty by about 10 percentage points. This page includes: India GDP
Growth Rate chart, historical data and news.

Country Indicator Reference Actual Previous Next Release Imp

India GDP Growth Rate Dec/2010 8.20 8.90

Infrastructure Sector Growth Rate in India GDP has been on the rise in the last
few years. The Growth Rate of the Infrastructure Sector in India GDP has grown due
to several reasons and this in its turn has given a major boost to the country's

Economy of India
India gross domestic product (GDP) means the total value of all the services and
goods that are manufactured within the borders of the country within the specified
period of time.

The Indian economy is the twelfth biggest in the whole world for it has the GDP of
US$ 1.09 trillion in 2007. The economy of India is the second major growing
economy in the whole world for it has the GDP growing at the rate of 9.4% in 2006-

The Infrastructure Sector in India

The Infrastructure Sector in India was after independence completely in the hands
of the public sector and this hampered the growth of this sector. India's less
spending on real estate, power, telecommunications, construction, and
transportation prevented the country from sustaining very high rates of growth. The
amount that India was spending on the Infrastructure Sector was 6% of GDP or US$
31 billion in 2002.

The contribution of the Infrastructure Sector in the India GDP

Infrastructure Sector Growth Rate in India GDP came to 3.5% in 1996- 1997 and the
next year, this figure was 4.6%. The Growth Rate of the Infrastructure Sector in
India GDP increased after the Indian government opened the sector to 100% foreign
direct investment (FDI). This was done in order to boost the Infrastructure Sector in
the country. The result of opening the sector to the private sector has been that
Infrastructure Sector Growth Rate in India GDP has increased at the rate of 9%. It is
estimated that the Growth Rate of the Infrastructure Sector in India GDP will grow at
the rate of 8.5% between 2006 and 2010. The biggest ongoing project in the
Infrastructure Sector in India is the Golden Quadrilateral, which is improving the
main roads that connect the four cities of Chennai, Mumbai, Delhi, and Kolkata.


Union Budget 2010 Impact on Infrastructure sector
While talking about bridging the policy gaps in Infrastructure sector, the Finance
Minister in his Union budget 2010 speech proposed the sustain the driving force for
improving infrastructure in urban and rural districts. He allocated Rs.1, 73,552 crore
for infrastructure growth in the country in budget 2010.

Government has set the target of constructing 20km of national highways on daily
basis and to trigger these changes projects have been undertaken via public private
partnerships (PPPs). The FM increase the allotment of road transport to Rs.19, 894
crore against the previous Rs.17, 520 crore for 2010-11. In an attempt to revise and
enlarge the railway network, he also allocated Rs.16, 752 crore while presenting the
union budget.

He notified the completion of introductory activities for the establishment of 6

industrial investment nodules with ecological infrastructure of international
standard. In addition, the Delhi-Mumbai Industrial Corridor project has been
undertaken for integrated local expansion.

Restoration of Infrastructure Bonds after a period of 5 years was also in the Budget
2010 agenda. It is one of the best tax saving schemes and keeping this in
consideration the FM has proposed an extra limit of Rs.20, 000/- for investing in
Infrastructure Bonds.

In order to provide long term monetary support to infrastructure projects,

government has also set up the India Infrastructure Finance Company Limited
(IIFCL). The expenditures of IIFCL are likely to reach Rs.9, 000 crore by the end of
March 2010 and Rs.20, 000 crore in the corresponding period of FY 2011.

Price level and inflation

India Inflation Rate

The inflation rate in India was last reported at 8.82 percent in February of 2011.
From 1969 until 2010, the average inflation rate in India was 7.99 percent reaching
an historical high of 34.68 percent in September of 1974 and a record low of -11.31
percent in May of 1976. Inflation rate refers to a general rise in prices measured
against a standard level of purchasing power. The most well known measures of
Inflation are the CPI which measures consumer prices, and the GDP deflator, which
measures inflation in the whole of the domestic economy. This page includes: India
Inflation Rate chart, historical data and news.
Country Indicator Reference Actual Previous Next Release Impa

India Inflation Rate Feb/2011 8.82 9.30

Intrest rate

India Interest Rate

The benchmark interest rate (reverse repo) in India was last reported at 6.25
percent. In India, interest rate decisions are taken by the Reserve Bank of India's
Central Board of Directors. The official interest rate is the benchmark repurchase
rate. From 2000 until 2010, India's average interest rate was 5.82 percent reaching
an historical high of 14.50 percent in August of 2000 and a record low of 3.25
percent in April of 2009. This page includes: India Interest Rate chart, historical data
and news.

Country Indicator Reference Actual Previous Next Release Impa

India Interest Rate Mar/2011 5.75 5.50

Foreign direct investment

India needs to worry on the foreign direct investment (FDI) front. According to the
statistics released by India’s Ministry of Commerce and Industry, the country has
received only $18.35 billion in FDI in the first 11 months (April-February) of the
financial year 2010-2011, compared to $24.63 billion that came in the 11 months of
the previous financial year. Although it is a significant dip, the government has not
mentioned the reasons for the fall except for saying that the “trend will be reversed
as it has received

Tax incentives for infrastructure

One aspect of the new Direct Tax Code is a new tax incentive scheme for the
infrastructure sector for areas including generation of power, development of

railways, ports and airports and construction of oil pipelines. This is a welcome

change that will help stimulate the development of infrastructure within India and

help lay down the basis for strong economic growth. Infrastructure development

needs to be closely linked to areas of property demand to ensure growth can

continue in the real estate sector.

Income Tax Act, 1961 (Section 80 IA) – Infrastructure Status

To further support construction of new homes, the tax breaks available under

Section 80-IA of the Income Tax Act should be extended to include housing

development. Given the huge shortfall in housing units in the country, one way of

bridging the demand-supply gap would be to develop self-contained residential

clusters complete with amenities such as roads, schools, parks, hospitals, retail

outlets, etc. Since provision of these amenities translates into infrastructure

development, the definition of infrastructure should include large scale housing

development as part of a township or on sites over a certain size; urban services

such as street lighting, solid waste management etc.; industrial parks and SEZ’s;

roads and bridges; civic amenities like electricity, water supply, sewerage,

telecommunications; and transport systems etc.

Infrastructure Facilities
Quality and availability of infrastructure facilities are the most critical factor
determining the

quantum of investment flows into any country. In India, successive governments

have given

due attention to this fact and have focused on upgrading India’s infrastructure
facilities to
international standards. Much of these efforts have already translated into visible
signs of

improvement in a few sectors notably telecom and bandwidth availability. However,

there is

still a lot that remains to be done and our present survey shows that the perception
about the

overall state of the Indian infrastructure facilities amongst foreign investors is not

encouraging. As captured in the present survey, the following section contains the

of the foreign direct investors, on the prevailing state of facilities in India in the
fields of roads

and highways, ports, airports, railways, telecom, bandwidth, power and water.

Investors’ Rating of Infrastructure Facilities

Rank Facility

1 Telecom

2 Bandwidth

3 Railways

4 Airports

5 Ports

6 Water

7 Roads and Highways

8 Power

FICCI Foreign
Direct Investment Survey - 2010
Industry Analysis(infrastructure)

Over view
Over the past four years,the indian economy consistently recordedgrowth rates in
excess of 8.5% per annaum resulting in rapidly increasing infrastructure
spending.total infrastructure spending is expected to increase from us$ 24 billion in
2005 to us$ 47 billion in 2009 .

Total investment requirement in the infrastructure sector over the next five
years is us$ 445 billion.

It is estimated that the infrastructure sector needs is to grow at a CAGR OF 15%

over the next five years to support the growing requierements of virutually every
other sector of the Indian economy.

With the object of stijmulating and mobilizing increased private sector

investments,either form domestic sources or foreign avenues,the government has
offered various incentives.

Segmentation of infrastructure sector

As per a recent study on corporate investments by the Reserve Bank of India, the investment in
infrastructure is higher at 53 per cent of the cost in FY'10 as compared to the 45 per cent in
FY'09. Power and telecom accounted for over half of the cost of all projects. The total
investment in the infrastructure sector stood at Rs 2,95,805 crore in FY'10.
Among the segments of infrastructure sector, the power sector attracted the maximum
investment to the amount of Rs 1,68,326 crore, telecom at Rs 1,17,689 crore, metal and metal
products at Rs 1,12, 732 crore, construction at Rs 47, 636 crore and mining and quarrying at Rs
14, 009 crore.
A lot of corporate investment was witnessed in metals and metal products with a share of 20.3
per cent, followed by construction projects and cement among the various infrastructure
The investment was predominantly directed towards the power sector. The infrastructure sector
also observed a continued thrust on public private partnership according to the study and had a
positive impact on stimulating investment in power, telecom and construction projects in the
infrastructure sector.

Industry life cycle

The industrial life cycle is a term used for classifying industry life over time. Industry
life cycle classification generally groups industries into one of four stages: pioneer,
growth, maturity and decline. In the pioneer phase, the product has not been widely
accepted or adopted. Business strategies are developing, and there is high risk of
failure. However, successful companies can grow at extraordinary rates. The Indian
infrastructure sector has passed this stage quite successfully. The industry is
growing rapidly, often at an accelerating rate of sales and earnings growth.

Life cycle position

The construction industry is the second largest industry of the country after agriculture. Construction
activity is an integral part of a country’s infrastructure and industrial development. It includes hospitals,
schools, townships, offices, houses and other buildings; urban infrastructure (including water supply,
sewerage, drainage); highways, roads, ports, railways, airports; power systems; irrigation and agriculture
systems; telecommunications etc.
It is in growth phase and offers massive development opportunities.

Swot analysis
Study the factors which may have an impact on business or industry either
in a positive or in a negative way.

• Strength is defined as any internal

asset,technology,motivation,finance,business links,etc That can
help to exploit opportunities and to fight of threats.
• Weakness is an internal condition which hampers the competitive
position or exploitation of opportunities
• Opportunity is any external circumstances or characteristic which
favours the demand of the system or where the system is enjoying a
competitive advantage.
• Threat is a challenge of an unfavourable trend or of any external
circumstance which will unfavourably influence the position of the

• Employment and training opportunities in the field of construction.
• Private sector housing boom and commercial building demands.
• Construction of the multi building projects on the feasible locations in the
• Good structured national network facilities the boom of construction industry.
• Low cost well-educated and skilled labour force is now widely available across
the country.
• Sufficient availability of raw materials and natural resources in the country is
supportive for the industry .
• Real estate development is on high and it is attracting the focus of the
industry towards construction.

• Chances of natural dis advantages are there.
• Distance between construction lprojects reduces business efficiency.
• Training itself has become a challenge.
• Changing skills requirements and an ageing work force may accentuate the
skills gap.
• Improve in long term career prospects is highly required to encourage staff
retention and new entrants.
• External allocation of large contracts becomes difficult.
• Lack of clearly define processes and procedures for construction and its
• Huge amount of money needed to be invested in this industry.

• Continuous private sector housing boom will create more construction
• Public sectorprojects through public private partnerships will bring further
• Developing supply chain through involvement in large projects is likely to
enhance the chances in construction.
• Renewable energy projects will offer opportunities to develop skills and
capacity in new markets.
• More flexible training delivery techniques are now available.
• Financial supports like loan and insurance and growth in income of people is
in support of construction industry.
• Historical cultural heritages like TAZ MAHAL encourage and provide a
creative plat form for the industry.
• Remote areas in the country are easily accessible and plenty of land is
available in the country.

• Long term market instability and uncertainty may damage the opportunities
and prevent the expansion of training and development facilities.
• Current economic situation may have an adverse impact on construction
• Political and security conditions in the region and late legislative enforcement
measures are always threats to any industry in india.
• Lack of political willingness and support on promoting new strategies.
• Natural abnormal casualties such as earth quake and floods are uncertain
and can prevent the construction boom.
• In efficient accessibility in planning and concerning the infrastructure and

The company analysis shows the long-term strenght of the company that what is the financial

position of the company in the market, where it stands among its competitors and who are the

key drivers of the company, what are the future plans of the company, what are the policies of

government towards the company and how the stake of the company divested among different

groups of people.

Here ,I have taken five construction companies namely

Lloyd for the purpose of fundamental analysis.

• Larsen & Toubro:
It is India's biggest construction organization. Supported by its equally
proficient allied sectors, the Engineering, Construction and Contracts Division
of L&T provides EPC solutions on concept and expenses which could be
incurred while performing engineering and infrastructure projects on large
scale. L&T's ECC department carry out large scale projects entailing ground-
breaking design and wide-ranging construction services ranging from
procurement, furnishing, fitting, testing and commissioning. L&T is known for
its excellence and timely deliverance. With an annual turnover of Rs 25,000
crore, L&T has more 12,000 skilled professional working for it.

DLF's chief business is to develop housing, marketable and retail properties.
Currently it has undertaken the development of 70 million sq ft of housing projects
which it intends to finish in the next three years. DLF has joined hands with Delhi
Development Authority to develop townships in Amritsar, Pune, Gurgaon, Mumbai,
Chennai and Goa. DLF has been the construction company behind different malls in
Hyderabad, Delhi, Bangalore, Mumbai, Amritsar, Ludhiana, Kochi and Chennai. The
company is also developing 50-75 hotels along with Hilton Hotels and infrastructure
and SEZ in India in collaboration with Laing O'Rourke (UK).


With an annual turnover of more than Rs 7,010 crore, Gammon India is famously
known as 'Builders to the Nation'. It is the one and only construction firm in India to
get an ISO 9001 authorization for its operational sectors in civil engineering and has
successfully carried out diverse civil engineering operations some of which include
constructing one of the longest river bridge in Asia at Patna across the Ganges and
the longest bridge in India across river Jadukata.

Hindustan construction company

The Company has a reputation of performing large-scale infrastructure projects
besides developing hi-tech construction equipments. It has carried out a number of
challenging and expensive projects in sectors like oil and gas pipeline, power, urban
infrastructure, transportation, irrigation and water supply, etc. HCC has also
acquired projects in countries like Iraq, Tanzania, Saudi Arabia, Bhutan and Sri
Lanka. It was the first Indian firm to execute and sustain an integrated quality
administration structure and has an annual turnover of more than Rs 2,394.50

Punj Lloyd
Punj Lloyd: Crowned as 'all-terrain specialists', Punj Lloyd is one of the biggest
Indian engineering construction firms. The company performs its operations in Asia
Pacific, China, Middle East, Europe, Africa, South Asia and Caspian. It provides
services ranging from engineering to project administration, innovative designs to
construction, to eminent clients like Petroleum Development Oman, British
Petroleum, Pertamina, Shell, ADNOC, Cairn Energy, etc.
Balance Sheet of Larsen ------------------- in Rs. Cr. -------------------
and Toubro

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds
Total Share Capital 27.48 56.65 58.47 117.14 120.44
Equity Share Capital 27.48 56.65 58.47 117.14 120.44
Share Application Money 0.00 0.00 0.00 0.00 25.09
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 5,683.85 9,470.71 12,317.96 18,142.82
Revaluation Reserves 29.37 27.93 25.90 24.59 23.29
Networth 5,768.43 9,555.08 12,459.69 18,311.64
Secured Loans 465.79 245.40 308.53 1,102.38 955.73
Unsecured Loans 987.78 1,832.35 3,275.46 5,453.65 5,845.10
Total Debt 2,077.75 3,583.99 6,556.03 6,800.83
Total Liabilities 7,846.18 13,139.07 19,015.72 25,112.47
Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds
Gross Block 2,876.30 4,188.91 5,575.00 7,235.78
Less: Accum. Depreciation 982.22 1,122.83 1,242.47 1,421.39 1,727.68
Net Block 1,753.47 2,946.44 4,153.61 5,508.10
Capital Work in Progress 286.06 471.22 699.00 1,040.99 857.66
Investments 3,104.44 6,922.26 8,263.72 13,705.35
Inventories 3,001.14 4,305.91 5,805.05 1,415.37
Sundry Debtors 5,504.64 7,365.01 10,055.52 11,163.70
Cash and Bank Balance 398.71 993.68 779.86 693.13 1,104.89
Total Current Assets 9,499.46 12,450.78 16,553.70 13,683.96
Loans and Advances 2,449.14 3,861.10 7,198.85 12,662.55
Fixed Deposits 184.49 100.75 184.60 82.16 326.98
Total CA, Loans & Advances 12,049.35 16,496.48 23,834.71 26,673.49
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 8,362.01 11,892.75 15,211.04 19,443.77
Provisions 1,180.13 2,035.42 3,066.53 2,188.36
Total CL & Provisions 9,542.14 13,928.17 18,277.57 21,632.13
Net Current Assets 2,507.21 2,568.31 5,557.14 5,041.36
Miscellaneous Expenses 21.98 9.84 3.06 0.26 0.00
Total Assets 7,846.18 13,139.07 19,015.72 25,112.47

Contingent Liabilities 305.59 270.22 1,013.51 1,371.86 1,719.39

Book Value (Rs) 335.61 202.65 325.98 212.32 303.28
12 mths 12 mths 12 mths 12 mths 12 mths

Sales Turnover 17,983.37 25,280.49 34,249.85 37,187.50
Excise Duty 253.86 338.08 334.38 393.31 317.31
Net Sales 17,645.29 24,946.11 33,856.54 36,870.19
Other Income 527.52 459.80 616.69 1,612.58 2,321.67
Stock Adjustments -103.24 121.76 746.17 105.11 -422.99
Total Income 18,226.85 26,308.97 35,574.23 38,768.87
Raw Materials 4,510.78 5,320.98 8,256.46 9,316.38 9,593.53
Power & Fuel Cost 221.50 308.13 365.25 456.39 334.08
Employee Cost 890.03 1,258.21 1,535.44 1,998.02 2,379.14
Other Manufacturing Expenses 6,647.70 7,451.07 10,632.83 15,659.17 16,913.31
Selling and Admin Expenses 996.59 1,222.80 1,393.80 1,844.83 1,854.23
Miscellaneous Expenses 125.00 166.15 280.69 569.32 325.58
Preoperative Exp Capitalised -1.89 -3.30 -11.42 -24.48 -36.25
Total Expenses 15,724.04 22,453.05 29,819.63 31,363.62
Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Operating Profit 1,284.00 2,043.01 3,239.23 4,142.02 5,083.58

PBDIT 1,811.52 2,502.81 3,855.92 5,754.60 7,405.25
Interest 321.34 331.46 501.83 770.00 995.37
PBDT 1,490.18 2,171.35 3,354.09 4,984.60 6,409.88
Depreciation 107.12 160.13 195.94 284.83 383.65
Other Written Off 0.00 0.00 15.66 21.16 30.95
Profit Before Tax 1,383.06 2,011.22 3,142.49 4,678.61 5,995.28
Extra-ordinary items -1.85 -5.34 12.21 -21.09 -45.13
PBT (Post Extra-ord Items) 1,381.21 2,005.88 3,154.70 4,657.52 5,950.15
Tax 366.12 601.87 982.05 1,176.19 1,577.02
Reported Net Profit 1,012.14 1,403.02 2,173.42 3,481.66 4,375.52
Total Value Addition 8,878.93 10,403.06 14,196.59 20,503.25 21,770.09
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 302.25 368.25 495.32 614.97 752.75
Corporate Dividend Tax 42.39 53.34 76.26 101.83 110.25
Per share data (annualised)
Shares in issue (lakhs) 1,373.86 2,832.71 2,923.27 5,856.88 6,021.95
Earning Per Share (Rs) 73.67 49.53 74.35 59.45 72.66
Equity Dividend (%) 1,100.00 650.00 850.00 525.00 625.00
Book Value (Rs) 335.61 202.65 325.98 212.32 303.28
Particular 201003 200903 200803 200703 200603
Source of Funds
Share Capital 339.48 339.44 340.96 305.88 37.77
Reserves & Surplus 12490.53 12035.39 10928.19 346.92 607.16
Shareholders Funds 12830.01 12374.82 11269.15 652.80 644.93
Secured Loans 11590.19 7979.97 4945.91 6242.81 3010.93
Unsecured Loans 1047.67 1635.00 3440.49 526.48 2.99
Total Debt 12637.85 9614.97 8386.41 6769.29 3013.92
Total Liabilities 25467.86 21989.79 19655.55 7422.10 3658.85
Application of Funds
Fixed Assets
Gross Block 2002.85 1968.40 1533.72 365.58 108.91
Less : Accumulated Depreciation 273.84 152.87 59.34 37.01 29.24
Provision for impairment of Assets 0.00 0.00 0.00 0.00 0.00
Net Fixed Assets 1729.02 1815.52 1474.37 328.57 79.67
Capital Work In Progress 1718.51 1657.73 1781.79 665.03 456.73
Total Fixed Assets 3447.53 3473.26 3256.16 993.60 536.40
Investments 6558.88 2956.32 1839.83 769.17 1397.28
Current Assets
Inventories 6533.69 6627.43 5928.13 4281.07 472.12
Sundry Debtors 607.96 212.89 930.18 173.79 26.55
Cash & Bank Balances 171.43 761.20 994.82 179.49 126.97
Loans & Advances 11609.93 11110.25 10488.44 4804.10 2463.68
Total Current Assets 18923.01 18711.78 18341.58 9438.45 3089.32
Current Liabilities & Provisions
Current Liabilities 1965.36 1634.58 2497.90 3035.63 1188.83
& Loss account of
Total Current Liabilities & Provision
1435.66 1458.64 1255.16 723.25 169.61
3401.02 3093.23 in Rs. Cr. -------------------
3753.07 3758.88 1358.45
LarsenNetand Toubro
Current Assets 15522.00 15618.55 14588.51 5679.57 1730.87
Miscellaneous Expenditure written off 0.00 0.00 0.00 0.00 0.00
Total Assets 25467.86 21989.79 19655.55 7422.10 3658.85
Particular 201003 200903 200803 200703 200603
Sales 2419.21 2835.36 5532.84 1133.47 984.40
Other Income 810.25 1015.19 529.02 296.09 161.02
Increase/Decrease in stocks -2.05 -2.78 -6.06 -8.72 -2.58
Total Income 3227.41 3847.77 6055.80 1420.85 1142.84
Total Expenditure 1317.41 1115.06 2464.55 434.83 644.88
Operating Profit 1910.00 2732.71 3591.25 986.02 497.95
Interest 847.24 809.86 447.65 356.25 146.15
Gross Profit 1062.76 1922.85 3143.61 629.77 351.81
Depreciation 126.05 114.08 25.68 9.44 3.90
Profit Before Tax 936.71 1808.77 3117.92 620.33 347.90
Provision for Tax 169.44 226.00 529.81 193.86 120.00
Deferred Tax 2.21 29.38 8.70 14.85 0.04
Fringe Benefit Tax 0.00 5.63 4.82 4.71 0.43
Net Profit 765.06 1547.77 2574.59 406.91 227.44
Adjustments Below Net Profit 0.00 -29.81 0.00 0.00 -1.08
Statutory Appropriations 0.00 0.00 0.00 0.00 0.00
Profit & Loss Brought Forward 2676.24 1734.96 269.27 523.76 317.02
Appropriations 677.37 636.30 1108.90 661.40 21.78
Profit & Loss Carried Forward 2763.92 2676.24 1734.96 269.27 523.76
EPS (in Rs) 4.51 9.12 15.10 2.66 60.22
Book Value (in Rs) 75.59 72.91 66.10 4.27 170.76
Preference Dividend (in Rs) 0.00 0.00 0.00 0.00 0.00
Equity Dividend in % 100.00 100.00 200.00 100.00 40.00
Equity Dividend in (Rs.) 339.48 339.44 681.93 340.97 1.55
Corporate Dividend Tax 11.38 28.91 115.89 57.95 0.22
Contingent Liability 9289.68 6585.38 4608.45 4772.97 1643.36
Extra-Ordinary Items 0.45 -0.01 0.56 -0.02 0.00

------------------- in Rs. Cr. -------------------

Balance Sheet of
Hindustan Construction

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds
Total Share Capital 25.63 25.63 25.63 25.63 30.33
Equity Share Capital 25.63 25.63 25.63 25.63 30.33
Share Application Money 0.00 0.00 15.19 15.19 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 864.19 878.45 963.24 964.03 1,486.85
Revaluation Reserves 0.00 0.00 0.00 0.00 0.00
Networth 889.82 904.08 1,004.06 1,004.85 1,517.18
Secured Loans 197.32 482.48 520.75 904.10 963.03
Unsecured Loans 1,068.58 1,324.11 1,417.70 1,551.67
Total Debt 1,551.06 1,844.86 2,321.80 2,514.70
Total Liabilities 2,455.14 2,848.92 3,326.65 4,031.88
Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds
Gross Block 772.81 1,101.19 1,409.73 1,682.83 1,814.18
Less: Accum. Depreciation 280.74 355.03 456.63 554.65 664.49
Net Block 492.07 746.16 953.10 1,128.18 1,149.69
Capital Work in Progress 107.43 151.27 67.50 46.44 34.85
Investments 126.47 228.64 295.54 365.50 408.69
Inventories 1,738.61 2,143.87 2,776.64 3,565.22
Sundry Debtors 2.80 0.54 4.45 4.71 2.65
Cash and Bank Balance 378.74 89.01 249.54 145.13 176.28
Total Current Assets 1,828.16 2,397.86 2,926.48 3,744.15
Loans and Advances 208.11 366.41 305.42 568.79 920.65
Fixed Deposits 627.26 119.36 14.81 8.74 12.04
Total CA, Loans & Advances 2,313.93 2,718.09 3,504.01 4,676.84
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 816.71 937.15 1,138.75 1,552.40 2,047.24
Provisions 37.24 47.71 46.56 165.08 190.95
Total CL & Provisions 853.95 984.86 1,185.31 1,717.48 2,238.19
Net Current Assets 1,329.07 1,532.78 1,786.53 2,438.65
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
Total Assets 2,455.14 2,848.92 3,326.65 4,031.88

Contingent Liabilities 322.49 416.04 800.05 1,037.13 1,279.12

Book Value (Rs)
34.72 35.28 38.59 38.62 50.03

Profit & Loss account of

Hindustan Construction ------------------- in Rs. Cr. -------------------

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Sales Turnover 2,399.63 3,119.17 3,313.70 3,629.21
Excise Duty 0.00 0.00 0.00 0.00 0.00
Net Sales 2,399.63 3,119.17 3,313.70 3,629.21
Other Income 56.21 22.31 3.21 84.91 17.76
Stock Adjustments 477.88 0.00 0.00 0.00 0.00
Total Income 2,421.94 3,122.38 3,398.61 3,646.97
Raw Materials 0.00 0.00 0.00 0.00 0.00
Power & Fuel Cost 64.35 0.00 0.00 0.00 0.00
Employee Cost 131.42 208.68 297.23 374.90 394.35
Other Manufacturing Expenses 1,825.86 2,291.79 2,387.89 2,631.18
Selling and Admin Expenses 60.31 83.32 92.57 94.53 126.18
Miscellaneous Expenses 11.71 13.48 19.13 17.82 19.37
Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00
Total Expenses 2,131.34 2,700.72 2,875.14 3,171.08
Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Operating Profit 191.68 268.29 418.45 438.56 458.13

PBDIT 247.89 290.60 421.66 523.47 475.89
Interest 57.24 93.84 169.52 243.74 240.15
PBDT 190.65 196.76 252.14 279.73 235.74
Depreciation 52.45 79.66 96.19 115.22 113.90
Other Written Off 0.00 0.00 0.00 0.00 0.00
Profit Before Tax 138.20 117.10 155.95 164.51 121.84
Extra-ordinary items 1.92 -41.73 0.05 0.04 0.00
PBT (Post Extra-ord Items) 140.12 75.37 156.00 164.55 121.84
Tax 15.33 38.61 47.23 39.20 40.40
Reported Net Profit 124.80 79.28 108.77 125.35 81.44
Total Value Addition 2,131.34 2,700.72 2,875.14 3,171.08
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 17.94 19.22 20.50 20.50 24.26
Corporate Dividend Tax 2.52 3.27 3.48 3.48 4.12
Per share data (annualised)
Shares in issue (lakhs) 2,562.50 2,562.50 2,562.50 3,032.50
Earning Per Share (Rs) 4.87 3.09 4.24 4.89 2.69
Equity Dividend (%) 70.00 75.00 80.00 80.00 80.00
Book Value (Rs) 34.72 35.28 38.59 38.62 50.03

Balance Sheet of Punj ------------------- in Rs. Cr. -------------------


Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds
Total Share Capital 52.22 52.25 60.69 60.70 66.42
Equity Share Capital 52.22 52.25 60.69 60.70 66.42
Share Application Money 0.00 0.00 25.40 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 1,046.19 2,353.88 2,548.26 3,510.65
Revaluation Reserves 8.53 5.77 0.00 0.00 0.00
Networth 1,104.21 2,439.97 2,608.96 3,577.07
Secured Loans 346.01 943.14 1,114.84 2,369.88 3,030.70
Unsecured Loans 62.94 575.50 252.80 567.97 472.30
Total Debt 408.95 1,518.64 1,367.64 2,937.85 3,503.00
Total Liabilities 2,622.85 3,807.61 5,546.81 7,080.07
Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds
Gross Block 763.88 1,221.70 989.43 1,072.28 1,179.98
Less: Accum. Depreciation 302.38 370.48 0.00 0.00 0.00
Net Block 461.50 851.22 989.43 1,072.28 1,179.98
Capital Work in Progress 81.96 4.03 92.85 123.65 134.38
Investments 124.41 317.80 727.76 993.35 676.27
Inventories 626.19 978.24 1,505.15 2,950.29 3,506.09
Sundry Debtors 378.48 561.51 963.97 1,523.56 1,497.58
Cash and Bank Balance 70.42 115.30 214.42 358.93 181.24
Total Current Assets 1,655.05 2,683.54 4,832.78 5,184.91
Loans and Advances 207.75 671.81 826.59 1,189.71 2,075.96
Fixed Deposits 2.86 222.60 0.00 0.00 0.00
Total CA, Loans & Advances 2,549.46 3,510.13 6,022.49 7,260.87
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 460.45 1,069.91 1,439.87 2,518.64 2,024.27
Provisions 20.60 29.74 72.68 146.31 147.17
Total CL & Provisions 481.05 1,099.65 1,512.55 2,664.95 2,171.44
Net Current Assets 804.65 1,449.81 1,997.58 3,357.54 5,089.43
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
Total Assets 2,622.86 3,807.62 5,546.82 7,080.06

Contingent Liabilities 597.31 1,796.41 3,331.44 6,439.37 6,466.98

Book Value (Rs)
202.04 42.04 79.57 85.97 107.71

Profit & Loss account of ------------------- in Rs. Cr. -------------------

Punj Lloyd

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Sales Turnover 2,238.85 4,511.10 6,919.87 7,116.70
Excise Duty 0.00 0.00 0.00 0.00 0.00
Net Sales 2,238.85 4,511.10 6,919.87 7,116.70
Other Income 22.62 60.46 30.66 35.75 424.90
Stock Adjustments -0.06 -0.03 0.00 0.00 0.00
Total Income 2,299.28 4,541.76 6,955.62 7,541.60
Raw Materials 448.71 587.82 1,625.36 2,381.76 3,253.24
Power & Fuel Cost 52.40 127.12 0.00 0.00 0.00
Employee Cost 138.63 236.56 358.53 574.59 704.62
Other Manufacturing Expenses 343.16 575.35 1,504.38 2,390.15 1,895.51
Selling and Admin Expenses 150.93 353.54 0.00 19.93 0.00
Miscellaneous Expenses 22.40 31.25 485.87 780.65 879.06
Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00
Total Expenses 1,911.64 3,974.14 6,147.08 6,732.43
Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Operating Profit 211.92 327.18 536.96 772.79 384.27

PBDIT 234.54 387.64 567.62 808.54 809.17
Interest 125.99 208.26 113.28 194.28 263.80
PBDT 108.55 179.38 454.34 614.26 545.37
Depreciation 44.21 84.46 113.39 119.48 132.68
Other Written Off 14.98 2.57 0.00 0.00 0.00
Profit Before Tax 49.36 92.35 340.95 494.78 412.69
Extra-ordinary items 5.80 4.99 0.00 0.00 0.00
PBT (Post Extra-ord Items) 55.16 97.34 340.95 494.78 412.69
Tax 17.69 35.75 119.51 173.68 45.29
Reported Net Profit 35.15 61.58 221.44 321.10 367.40
Total Value Addition 707.51 1,323.83 2,348.77 3,765.32 3,479.19
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 5.22 7.84 12.14 9.10 4.99
Corporate Dividend Tax 0.73 1.33 2.06 1.55 0.83
Per share data (annualised)
Shares in issue (lakhs) 522.20 2,612.60 3,034.46 3,034.82 3,320.87
Earning Per Share (Rs) 6.73 2.36 7.30 10.58 11.06
Equity Dividend (%) 10.00 15.00 20.00 15.00 7.50
Book Value (Rs) 202.04 42.04 79.57 85.97 107.71

Balance Sheet of ------------------- in Rs. Cr. -------------------

Gammon India

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

15 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds
Total Share Capital 17.69 17.69 17.69 122.69 25.83
Equity Share Capital 17.69 17.69 17.69 17.69 25.83
Share Application Money 0.00 0.00 0.00 4.02 20.35
Preference Share Capital 0.00 0.00 0.00 105.00 0.00
Reserves 840.80 879.78 961.31 1,208.36 1,656.29
Revaluation Reserves 67.34 252.80 249.66 245.57 242.43
Networth 925.83 1,150.27 1,228.66 1,580.64 1,944.90
Secured Loans 144.00 230.32 243.99 325.25 488.55
Unsecured Loans 26.58 141.17 133.07 647.02 806.01
Total Debt 170.58 371.49 377.06 972.27 1,294.56
Total Liabilities 1,521.76 1,605.72 2,552.91 3,239.46
Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

15 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds
Gross Block 542.01 896.21 1,026.83 1,275.01 1,478.80
Less: Accum. Depreciation 172.27 205.10 253.57 326.98 394.45
Net Block 369.74 691.11 773.26 948.03 1,084.35
Capital Work in Progress 7.32 10.37 18.19 35.38 84.64
Investments 116.18 150.44 160.78 220.61 197.84
Inventories 470.59 529.00 704.98 1,011.10 1,309.15
Sundry Debtors 238.01 303.35 517.15 1,343.70 1,763.68
Cash and Bank Balance 42.99 35.76 37.99 35.26 55.70
Total Current Assets 751.59 868.11 1,260.12 2,390.06 3,128.53
Loans and Advances 335.36 555.78 515.94 1,176.71 1,408.52
Fixed Deposits 91.28 60.23 0.10 16.10 16.78
Total CA, Loans & Advances 1,484.12 1,776.16 3,582.87 4,553.83
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 533.20 698.71 950.14 1,941.59 2,362.82
Provisions 41.85 115.57 172.53 292.39 318.38
Total CL & Provisions 575.05 814.28 1,122.67 2,233.98 2,681.20
Net Current Assets 603.18 669.84 653.49 1,348.89 1,872.63
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
Total Assets 1,521.76 1,605.72 2,552.91 3,239.46

Contingent Liabilities 570.73 498.74 485.88 589.74 521.61

Book Value (Rs) 98.97 103.46 112.86 141.34 131.99

profit&lossa/c of Gammon india

15 mths 12 mths 12 mths 12 mths 12 mths

Sales Turnover 1,470.8 1,851.69 2,344.91 3,703.86 4,551.24
Excise Duty 0.00 0.00 0.00 46.00 66.14
Net Sales 1,851.69 2,344.91 3,657.86 4,485.10
Other Income 28.17 47.79 25.83 91.36 65.69
Stock Adjustments 121.85 56.30 190.37 40.37 -32.02
Total Income 1,955.78 2,561.11 3,789.59 4,518.77
Raw Materials 0.00 0.00 0.00 348.12 437.89
Power & Fuel Cost 67.96 77.09 1.07 1.27 1.77
Employee Cost 26.41 29.59 30.32 43.97 60.47
Other Manufacturing Expenses 1,566.72 2,242.69 2,937.84 3,490.37
Selling and Admin Expenses 35.41 51.89 31.60 26.00 33.70
Miscellaneous Expenses 4.81 3.63 16.39 10.63 24.53
Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00
Total Expenses 1,728.92 2,322.07 3,367.83 4,048.73
Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

15 mths 12 mths 12 mths 12 mths 12 mths

Operating Profit 187.37 179.07 213.21 330.40 404.35

PBDIT 215.54 226.86 239.04 421.76 470.04
Interest 67.26 48.56 53.48 149.11 187.84
PBDT 148.28 178.30 185.56 272.65 282.20
Depreciation 37.10 35.22 46.21 63.95 70.93
Other Written Off 0.00 0.00 0.00 0.00 0.00
Profit Before Tax 111.18 143.08 139.35 208.70 211.27
Extra-ordinary items 1.41 -53.88 -2.19 1.77 -18.72
PBT (Post Extra-ord Items) 112.59 89.20 137.16 210.47 192.55
Tax 8.33 44.70 51.02 69.69 66.47
Reported Net Profit 102.84 98.36 88.32 140.48 125.72
Total Value Addition 1,728.92 2,322.07 3,019.71 3,610.84
Preference Dividend 0.00 0.00 0.00 0.00 6.08
Equity Dividend 5.25 4.37 4.34 12.80 7.65
Corporate Dividend Tax 0.74 0.64 0.74 2.17 2.28
Per share data (annualised)
Shares in issue (lakhs) 867.45 867.45 867.45 867.45 1,274.39
Earning Per Share (Rs) 11.86 11.34 10.18 16.19 9.39
Equity Dividend (%) 30.00 25.00 25.00 30.00 30.00
Book Value (Rs) 98.97 103.46 112.86 141.34 131.99

2006 2007 2008 2009 2010

73.6 74.3 59.4 72.6
L&T 7 49.53 5 5 6
DLF 2 2.66 15.1 9.12 4.51
HCC 4.87 3.09 4.24 4.89 2.69
10.5 11.0
PUNJ Lloy 6.73 2.36 7.3 8 6
11.8 10.1 16.1
GAMMON 6 11.34 8 9 9.36


2006 2007 2008 2009 2010

15030. 17983. 25280. 34249. 37187

L&T 81 37 49 85 .5

2419.2 2835.3 5532.8 1133.4

DLF 1 6 4 7 984.4

2399.6 3119.1 3629.

HCC 1509.1 3 7 3313.7 21

1368.2 2238.8 6919.8 7116.

PUNJ Lloy 1 5 4511.1 7 7

1470.8 1851.6 2344.9 3703.8 4551.

GAMMA 9 9 1 6 24