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Introduction to BSE
The Bombay Stock Exchange SENSEX (acronym of Sensitive Index) more commonly referred to as SENSEX or BSE 30 is a free-float market capitalization-weighted index of 30 well-established and financially sound companies listed on Bombay Stock Exchange. The 30 component companies which are some of the largest and most actively traded stocks, are representative of various industrial sectors of the Indian economy. Published since January 1, 1986, the SENSEX is regarded as the pulse of the domestic stock markets in India. The base value of the SENSEX is taken as 100 on April 1, 1979, and its base year as 1978-79. On 25 July, 2001 BSE launched DOLLEX-30, a dollar-linked version of SENSEX. As of 21 April 2011, the market capitalisation of SENSEX was about 29,733 billion (US$660 billion) (42.34% of market capitalization of BSE), while its free-float market capitalization was 15,690 billion (US$348 billion).
Introduction to Topic
Scope of study
This project report is based on fundamental and technical view on BSE 30 index. Study is based on Economic Value Added (EVA) as tool of fundamental analysis and Technical analysis to measure performance of stock. It is assumed that the entire economical and political factor remains constant. EVA and Technical analysis are measured for the year 2009-10 due to lack of audited accounts of companies at the time of starting work on this report. As the fundamental analysis is based on 2009-10 annual report, to make adequate comparisons of fundamental and technical analysis project is made based on chart up to 31st march 2010. Ranking to stock is given based on fund employed and EVA of each company.
Economic Value Added

The goal of Financial Management is to maximize the shareholders value. The shareholders wealth is measured by the returns they receive on their investment. Return are in two parts first is in the form of dividends and the second in the form of capital appreciation reflected market value of share of which market value is he dominant part. The market value of share is influenced by number of factors, many of which may not be fully influenced by the management of firm. However, one factor, which has a significant influence on the market value, is the expectation of the share holders regarding the return on their investment. The share prices are influenced by the extent to which the management is able to meet the expectation of the shareholders. Various measures like return on capital employed return on equity, earnings per share, net profit margin, operating profit margin have been used to evaluate the performance of the business. The problem with these performance measures is that they lack a proper benchmark for comparison. The shareholders require at least a minimum rate of return on their investment 2
depending on the risk in the investment. Sometimes, the industry average or the competitors performance may be considered as a benchmark, which may not be acceptable to meet the shareholders minimum expectations. Concept of EVA The company creates shareholder value it generates return in excess of its cost of capital. The excess of returns over cost of capital is simply termed as Economic Value Added (EVA), EVA measures whether the operating profit is sufficient enough to cover Cost of capital. Shareholders must earn sufficient returns for the risk they have taken in investing their money in companys capital. The return generated by the company for shareholders has to be more than the cost of capital to justify risk taken by the shareholders. If a companys EVA is negative, the firm is destroying shareholders wealth even though it may be reporting positive and growing, EPS or positive Return on Capital employed. EVA is a way of measuring an operations real profitability. EVA is a better system, than ROI, to encourage growth in new products, new equipment and new manufacturing facilities. EVA measurement also requires a company to be more careful about resource mobilization, resource allocation and investment decision. It effectively measures the productivity of all factors of production. Improving EVA EVA can be improved in any of the following ways: o Increasing NOPAT with the same amount of capital o Reducing the capital employed without affecting the earning i.e. discarding the unproductive assets o Investing in those projects that earn a return greater than the cost of capital. o By reducing the cost of capital. Which means employing more debt, as debt is cheaper than equity of preference capital 3
Superiority of EVA o EVA is most directly linked to the creation of shareholders wealth over time. The term maximizing value in the EVA context, means maximizing long term yield on shareholders investment and not just the absolute amount of earnings / profit. o An EVA financial management system removes all the inconsistencies resulting from the use of different financial measures for different corporate functions under the typical traditional financial management system as it ties all the functions for instance, Reviewing a capital budgeting process Valuing an acquisition Considering strategic plan alternatives Assessing performance Communicating or Rewarding management
To one single measure the effect on shareholder value and thus provides a meaningful target to pursue for both internally and externally oriented decisions. o EVA compensation system ties managements interest with those of shareholders. o EVA captures the performance status of corporate system over a broader canvas i.e. to arrive at true profit; cost of borrowed capital as well as cost of equity capital should be deducted from net operating profits. Further to maximize earnings is not sufficient, at the same time consumption of capital should be minimum / optimum under an EVA based system. o A regular monitoring of EVA throws light on the problem areas of a company and thus helps managers to take corrective actions.
o It is used to assess the likely impact of competing strategies on shareholder wealth and thus helps the management to select the one that best serve shareholders. o It also fits well with the concepts of corporate governance and thus considered to be the best corporate governance system. EVA bonus systems do this by giving employees an ownership stake in improvements in the EVA of their divisions or operation. This causes employees to behave like owners and reduces or eliminates the need for outside interference in decision making. Drawbacks of EVA o One important drawback of EVA is that it ignores inflation. So it is biased against new assets. Whenever a new investment is make capital charge is on the full cost initially, so EVA figure is low. But as the depreciation is written off the capital charge decreases and hence EVA goes up. This problem exists with measures like ROI also. o Second problem is that since EVA is measured in rupee terms it is biased in favor of large, low return businesses. Large businesses that have returns only slightly above the cost of capital can have higher. EVA than smaller businesses that earn returns much higher than costs. This makes EVA a poor metric for comparing businesses. o Thirdly, in the short term EVA can be improved by reducing assets faster than the earnings and if this is pursued for long it can lead to problems in the longer run when new improvements to the asset base are made. This new investment can have high negative effect on EVA because the asset base would have been reduced to a large extent and improvements will involve huge investments. Computation of EVA EVA = NOPAT (TCE X WACC) Where, NOPAT = Net Operating Profit after Tax TCE = Total Capital Employed WACC = Weighted Average Cost of Capital
Technical Analysis
Fundamental analysis involves analyzing the characteristics of a company in order to estimate its value. Technical analysis takes a completely different approach, it doesnt care one bit about the value of a company or a commodity. Technicians are only interested in the price movements in the market. Despite all the fancy and exotic tools it employs, technical analysis really just studies supply and demand in a market in an attempt to determine what direction, or trend, will continue in the future. In othr words, technical analysis attempts to understand the emotions in the market by studying the market itself, as opposed to its components. If you understand the benefits and limitations of technical analysis, it can give you a new set of tools or skills that will enable you to be a better trader or investor.
Assumption
Technical analysis is method of evaluating securities by analyzing the statistics generate by market activity, such as past price and volume. Technical analyses do not attempt to measure a securitys intrinsic value, but instead use charts and other tools to identify patters that can suggest future activity. Just as there are many investment styles on the fundamental side, there are also many different types of technical traders. Some rely on chart interpretations; others use technical indicators and oscillators, and most use some combination of the two. In any case, technical analysts exclusive use of historical price and volume data is what separates them from their fundamental counterparts. Unlike fundamental analysis, technical analysis dont care whether a stock is undervalued the only thing that matters is a securitys past trading data and what information this data can provide about where the security might move in the future. The field technical analysis is based on three assumptions: 1. 2. The market discounts everything Price moves in trends 6
3.
History tends to repeat itself
Use of Trends
One of the most important concepts in technical analysis is that of trend. The meaning in finance isnt all that different from the general definition of the term - a trend is really nothing more than the general direction in which a security or market headed. Take a look at the chart below
It isnt hard to see that the trend in figure is up. However, its not always this easy to see a trend.
There are lots of ups and downs in this chart, but there isnt a clear indication of which direction this security is headed. A more formal definition Unfortunately, trends are not always easy to see. In other words, defining a trend goes well beyond the obvious. In any given chart, you will probable notice that prices do not tend to move in a straight line in any direction, but rather in a series of highs and lows. In technical analysis, it is the movement of the highs and lows that constitutes a trend. For example, an uptrend is classified as a series of higher highs and higher lows, while a downtrend is one of lower lows and lower highs.
Types of Trend
There are three types of trends 1 2 3 Uptrend Downtrends Sideways / Horizontal trends
As the names imply, when each successive peak and trough is higher, its referred to as an upward trend. If the peaks and troughs are getting lower, its a downtrend. When there is little movement up or down in the peaks and troughs, its a sideways or horizontal trend. If you want to get really technical, you might even say that a sideways trend is actually not a trend on down, but a lack of a well defined trend in either direction. In any case, the markets can really only trend in these three ways up, down or nowhere.
Trend Lengths
Along with these three trend directions, three trend classifications. A trend of any direction can be classified as a long term trend, intermediate trend or a short term trend. In terms of the stock market, a major trend is generally categorized as one lasting longer than a year. An intermediate trend is considered to last between one and three months and a near term trend is anything less than a month. Along term trend is composed of several intermediate trends, which often moves against of the direction of the major trends. If the major trend is upward and there is a downward correction in price movement followed by a continuation of the uptrend, the corrections considered to be an intermediate trend. The short term trends are components of both major and intermediate trends.
When analyzing trends, it is important that the chart is constructed to best reflect the type of trend being analyzed. To help indentify long term trends, weekly charts or daily charts spanning a five year period are used by chartists to get a better idea of the long term trend. Daily data charts are best used when analyzing both intermediate and short term trends. It is also important to remember that the longer the trend, the more important it is. 9
Trend lines
A trend lines is a simple charting technique that adds a line to a chart to represent the trend in the market or a stock. Drawing a trend line is as simple as drawing a straight line that follows a general trend. These are used to clearly show the trend and are also used in the identification of trend reversals. As you can see in following figure, an upward trend line is drawn at the lows of an upward trend. This line represents the support the stock has every time it moves from a high to low. Notice how the price is propped up by this support. This type of trend line helps traders to anticipate the point at which a stocks price will begin moving upward again. Similarly, a downward trend line is drawn at the highs of the downward trend. This line represents the resistance level that a stock faces every time the price moves from a low to a high.
Channels
A channel or channel lines, is the addition of two parallel trend lines that act as strong areas of support and resistance. The upper trend lines connects a series of highs, while the lower trend lines connects a series of lows. A channel can slope upward, downward or sideways but, regardless of the direction, the interpretation remains the same. Traders will 10
expect a given security to trade between the two levels of support and resistance until it breaks beyond one of the break. Along with clarity displaying the trend, channels are mainly used to illustrate important areas of support and resistance.
In above figure a descending channel on a stock chart, the upper trend line has been placed on the highs and the lower trend lines are on the lows. The price has bounced off of these lines several times, and has remained range bound fro several months. As long as the price does not fall below the lower lines or move beyond the upper resistance, the range bound down trends is expected to continue.
The importance of Trend

It is important to be able to understand and identify trends so that you can trade with rather than against them. Two important sayings in technical analysis are the trend is your friend and dont buck the trend illustrating how important trend analysis is for technical traders
Support and Resistance

Once you understand the concept of a trend, the next major concept is that of support and resistance. Youll often hear technical analysis talk about the ongoing battle between the bulls and the bears, or the struggle between buyers and sellers. This is revealed by the prices a security seldom moves above (resistance) or below (support) 11
As in above figure, support is the price level through which a stock or market seldom falls (illustrated by the blue arrows). Resistance, on the other hand, is the price level that a stock or market seldom surpasses (illustrated by the red arrows).
Round Numbers and Support and Resistance

One type of universal support and resistance that tends to be seen across a large number of securities is round numbers. Round numbers like 10, 20 ,35 ,50, 100 and 1000 tend be important in support and resistance levels because they often represent the major psychological turning points at which many trackers will make buy or sell decisions. Buyers will often purchase large amounts of stock once the price starts to fall toward a major round number such as 50, which makes it more difficult fro shares to fall below the level. On the other hand, sellers start to sell off a stock as it moves toward a round number peak, making it difficult to move past this upper makes them important points of support and resistance and, in many cases, major psychological points as well.
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Role Reversal
Once a resistance or support level is broken, its role is reversed. If the price falls below a support level, that level will become resistance. If the price rises above a resistance level, it will often become support. As the price moves past a level of support or resistance, it is thought that supply and demand has shifted, causing important that the price make a strong move through either the support or resistance.
For example, as you can see in above figure, the dotted line is shown as a level of resistance that has prevented the price from heading higher on two previous occasions (points 1 and 2). However, once the resistance is broken, it becomes a level of support (shown 3 and 4) by propping up the price and preventing it from heading lower again. Many traders who begin using technical analysis find this concept hard to believe and dont realize that this phenomenon occurs rather frequently, even with some of the cost well known companies. In almost every case, a stock will have both a level of support and a level of resistance and will trade in this range as it bounces between these levels. This is most often seen when a stock is trading in a generally sideways manner as the price moves through successive peaks and troughs, testing resistance and support.
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Volumes
Volume is simply the number of shares or contracts that trade over a given period of time, usually a day. The higher the volume, the more active the security. To determine the movement of the volume (up or down), chartists look at the volume bars that can usually be found at the bottom of any chart . . Volume bars illustrate how many shares have traded per period and show trends in the same way that prices do.
Chart Interpretation
A chart interpretation is a distinct formation on a stock chart that creates a trading signal, or a sign of future price movements. Chartists use these interpretations to identify current trends and trend reversals and to trigger buy and sell signals. As the three assumptions of technical analysis, the third of which was that in technical analysis, history repeats itself. The theory behind chart patters is based on this assumption. The idea is that certain interpretations are seen many times, and that these interpretations signal a certain high probability move in a stock. Based on the historic trend of a chart interpretation setting up a certain price movement, chartists look for these interpretations to identify trading opportunities. While there are general ideas and components to every chart interpretation, there is no chart interpretation that will tell you with 100% certainty where a security is headed. This creates some leeway and debate as to what a good interpretation looks like, and is a major reason why charting is often seen as more of an art than a science. 14
There are two types of interpretations within this area of technical analysis, reversal and continuation. A reversal interpretation signals that a prior trend will reverse upon completion of the interpretation. A continuation interpretation, on the other hand, signals that a trend will continue once the interpretation is complete. These interpretations can be found over charts of any timeframe. Following are some of the popular chart interpretations. Head and Shoulders This is one of the most popular and reliable chart interpretations in technical analysis. Head and Shoulders is a reversal cart interpretation that when formed, signal that the security is likely to move against the previous trend. As you can see in following figure there are two versions of the head and shoulders chart interpretation. Head and Shoulder top (shown on left) is a chart interpretation that is formed at the high of an upward movement and signals that the upward trend is about to end. Head and shoulders bottom, also known as inverse head and shoulders (shown on right) is the lesser known of the two, but is used to signal an reversal in a downtrend.
Cup and Handle A cup and handle chart is a bullish continuation interpretation in which the upward trend has paused but will continue in an upward direction once the interpretation is confirmed. As you can see in figure, this price interpretation forms what looks like a cup, which is preceded by an upward trend. The handle follows the cup formation and is formed by a generally downward / sideways movement in the securitys price. Once the price movement 15
pushes above the resistance lines termed in the handle, the upward trend can continue. There is a wide ranging time frame for this type of interpretation, with the span ranging from several months to more than a year.
Double tops and bottoms This char interpretation is another well known interpretation that signals a trend reversal - it is considered to be one of the most relabeled is commonly used. These interpretations are formed after a sustained trend and signal to chartists that the trend is about to reverse. The interpretation is created when a price movement tests support or resistance levels twice and is unable to break through. This interpretation is often used to signal intermediate and long term trend reversals.
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In the figure, a double top interpretation is shown on the left, while a double bottom interpretation is shown on the right. Triangles Triangles are some of the most well-known chart interpretations used in technical analysis. The three types of triangles, which vary in construct and implication, are the symmetrical triangle, ascending and descending triangle. These chart interpretations are considered to last anywhere from a couple of weeks to several months.
The symmetrical triangle in above figure is a interpretation in which two trend lines converge toward each other. This interpretation is neutral in that a breakout to the upside or downside is a confirmation of a trend in that direction. In ascending triangle, the upper trend line is that, while the bottom trend line is upward sloping. This is generally thought of as a bullish interpretation in which chartists look for an upside breakout. In a descending triangle, the lower trend line is flat and the upper trend line is descending. This is generally seen as a bearish interpretation where chartists look for a downside breakout. Flag and Pennant These two short term chart interpretations are continuation interpretations that are formed when there is a sharp price movement followed by a generally sideways price movement. This interpretation is then completed upon another sharp price movement in the same direction as the move that stared the trend. The interpretations are generally thought to last from one to three weeks.
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As you can see in above figure, there is little difference between a pennant and a flag. The main difference between these price movements can be seen in the middle section of the chart interpretation. In a pennant, the middle section is characterized by converging trend lines, much like what is seen in a symmetrical triangle. The middle section on the flag interpretation, on the other hand, shows a channel interpretation, with no convergence between the trend lines. In both cases, the trend is expected to continue when the price moves above the upper trend line. Wedge The wedge chart interpretation can be either a continuation or reversal interpretation. It is similar to a symmetrical triangle except that the wedge interpretation slants in an upward or downward direction, while the symmetrical triangle generally shows a sideways movement. The other difference is that wedges tend to form over longer periods, usually between three and six months.
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The fact that wedges are classified as both continuation and reversal interpretations can make reading signals confusing. However, at the most basic level, a falling wedge is bullish and a rising wedge is bearish. In this figure we have a falling wedge in which two trend lines are converging in a downward direction. If the price was to rise above the upper trend line, it would form a continuation interpretation, while a move below the lower trend line would signal a reversal interpretation. Gaps A gap in a chart is an empty space between a trading period and the following trading period. This occurs when three is a large difference in price between two sequential trading periods. .For example, if the trading range in one period is between 25 and 30 and the next trading period opens at 40m there will be a large gap on the chart between these two periods. Gap price movements can be found on bar charts and candlestick charts but will not be found on point and figure or basic line charts. Gaps generally show that something of significance has happened in the security, such as a better than expected earnings announcement. There are three main types of gaps, breakaway, runaway and exhaustion. A breakaway gap forms at the start of a trend, a runaway gap forms during the middle of a trend and an exhaustion gap forms near the end of a trend. Triple Tops and Bottoms Triple tops and triple bottoms are another type of reversal chart interpretation in chart analysis. These are not as prevalent in charts as head and shoulders and double tops and bottoms, but they act in a similar fashion. These two chart interpretations are formed when the price movement tests a level of support or resistance three times and is unable to break through, this signal a reversal of the prior trend.
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Confusion can form with triple tops and bottoms during the formation of the interpretation because they can look similar to other chart interpretations. After the first two support/resistance tests are formed in the price movement, the interpretation will look like a double top or bottom, which could lead a chartist to enter a reversal position. Rounding Bottom A rounding bottom, also referred to as a saucer bottom, is a long term reversal interpretations that signals a shift from a downward trend to an upward trend. This interpretation is traditionally thought to last anywhere from several months to several years.
A rounding bottom chart interpretation looks similar to a cup and handle interpretation but without the handle. The long term nature of this interpretation and the lack of a confirmation trigger, such as the handle in the cup and handle, make it a difficult interpretation to trade.
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Beta value
Beta value shows volatility of stock as compare to market volatility. When market and stock both are equally volatile than beta value of stock will be 1. If stock is less volatile than it will be between 0 and 1. Inversely, if stock is more volatile than the market, beta value of stock will be more than one. It is important to consider volatility of stock before making investment in stock.
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Problem Statement
While investing money into stock market, it is important to determine in which direction market is moving. Direction of market is based on capitalization value of each stock in index. It is necessary to evaluate every stock by which index is structured. For that it is required to make sure direction of each stock in index. There are three methods to make evaluation to select stock namely technical analysis, fundamental analysis and sentimental prevailing at current market position. Fundamental analysis make assumption that stock will move based on operating efficiency and profitability of company over period of time where as technical analysis makes assumption that volatility and sensitivity will remain same for long period, so due to this reason every stock repeats its past trends. At the same time it is to be noted that technical analysis is influenced by fundamental outcome and future expectation from the company operation. Thus, investor gets confused, which stock is to be select for higher return.
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Literature Survey
Literature review for Economic Value Addition
Economic Value Added (EVA) is a registered trademark of Stern Stewart & Co., so other companies may refer to this as "economic profit" to avoid trademark issues. The economic value added definition refers to a performance metric that measures the true economic profit of a company, which clearly communicates a shareholders investment value. Its basic premise is that a business must include operating costs and capital costs for a report of true profit. In the 1990s, large corporations sought better measures for internal wealth creation performance, so they turned to the EVA formula. Many believe EVA is the most successful performance metric to find true economic profit. A strong financial theory and consistent valuation principles make it difficult to dismiss. Moreover, economic value added analysis is able to measure and track a companys economic position over time, which reveals shifts in a companys economic value. Will the economic value added model benefit your company? Take a look at these economic value added (EVA) basics: 1. Economic value added calculations need adjustments. 2. Long-term perspectives contribute to economic value added advantages. 3. Economic value added analysis yields results.
Literature review for Technical Analysis

Maramysky, and Wang (2000) examines the activeness of technical analysis on US stocks from 1962 to 1998 and finds that over the 31 year sample period, several technical indicators do provide incremental information and may have same practical value.
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Fern and Rodr Gonz, Martel and Sosvilla Rivero (2000) apply an artificial neural network in the Madrid stock market and find that, in the absence of trading costs, the technical trading rule is always superior to a buy and hold strategy for both bear market and stable market episodes, but not in a bull market. One criticism is that beating the market in the absence of costs seems of little significance unless one is interested in finding a signal which will later be incorportated into a full system. Secondly, it is perhaps ahive to work on the premise thatbull and bear markets exist.
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Research Methodology
Objective of Study
Measuring fundamental and technical position of each stock of BSE 30. Measuring operational efficiency, volatility and sensitivity of stocks that by determining trends and expected moves. Providing guidelines to investor to make investment decision and withdrawal decision allotting preference to each stock.
Need of Study
Investment decision in stock market, investor must be known correlation of stock with market and direction of market whether it is favorable or not. If investor has selected wrong stock and time to enter than there may be block of money or losses. Fundamental and technical tools are used to measure market direction. Stock market has twenty of share registered, it make investor confused which stock should he select for batter investment and return. This project report is includes BSE 30 stocks as research base being leading shares of stock market. Based on capital employed, fundamental value and technical value all the stock are ranked considering expected return of stock. This will help the investor in selecting the best stocks and balance their portfolio.
Research design
Research on stock market with help of fundamental and technical analysis is regularly held by professional equity analyst and brokers. So, nature of study is Descriptive study.
Sample Size
Stock exchange is maintain many indexes separately to measure sector vise impact and performance. Out of that this project report includes stocks of BSE 30.
Source of Sample Size

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In India, there are two major stock exchanges namely, National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Sample size is taken from BSE this project report is based BSE 30 (sensex) which covers top 30 stock in the terms of capitalization of shares.
Research Tools
To evaluate the position of stock, this project report is using two research tools namely, Economic Value Added to measure operating efficiency and Technical Analysis to measure trends, volatility and sensitivity of each stock.
Limitation of Study
Study is done on previous year i.e. 2009-10 due to lack of audited financial statements for current year at the time of starting of project report. As the fundamental are based on previous year and to make comparable analysis, study has also included technical analysis up to March 2010. Change in economic condition and management team reflects directly pricing, volatility and sensitivity to each stock. So if there is any change in such factor than study is not applicable. Expected positions may be near to future movement. It does not reflect perfect position and direction of stock.
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Data Analysis & Interpretation

TATA Motors
Market weight Price as on 1st April 2009 Price as on 31 March 2010 52 weeks high 52 weeks low
st
2.83% 173.00 710.00 792.60 179.85
Economic Valued Added

Total Capital Employed TATA Motors Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of Equity Cost of Reserve & Surplus Cost of Debt Cost of Capital Div. / Int. Cost of Equity Reserves & Surplus Cost of Debt 15 1103.84 Fund / MP 710 14394.87 16625.91 Cost 2.1127 2.1127 4.3886 = = = Dividend / Market Price Cost of Equity Interest (1 T) / Debt (Rs. In Cr.) 570.60 14394.87 7742.60 8883.31 1508.64 33100.02 4354.63 Cr.
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Weighted Average Cost of Capital Equity share capital Reserves & surplus Secured & Unsecured Debt Rs. Weight Cost of Capital WACC 570.6 0.0181 2.1127 0.03816 14394.87 0.4557 2.1127 0.96267 16625.91 0.5263 4.3886 2.30963 31591.38 3.31046
= = =
NOPAT (TC * WACC) 4354.63 (33100.02 * 3.31046) 3258.87 Cr. 57.12 Rs. Expected (1+3) 237.07 valued (2-4) + 472.93
Economic Value Added per share Mkt. Price 1-Apr-09 31-Mar-10 179.95 710.00
EVA per share 57.12
Market price of share of TATA Motors as on 1st April 2009 was 179.85 Rs.
Economic Value Addition during the financial year 2009-10 is 52.12 Rs. to each share. Fundamentally value of share price should be 237.07 Rs. at the end of year.
But the market shows over valuation by 472.93 Rs.
Technical Analysis
Beta Value Interpretation Stock Return vs. Market Return 1st April 2009 BSE 30 Stock 9901 173.10 31st March 2010 17527 710.0 Difference 7626 536.9 Return 77.02% 310% 1.53
Chart interpretation Throughout the year 2009-10, chart is showing upward trend. On the 31st march 2010, chart is flowing in sideways interpretation. At price of Rs. 675 level, stock is showing 28
large volume in the market and this was leading for change in upward trend to sideways trend. Chart interpretation is Descending Triangle for long term as descending line of triangle is very flatter. For long term investor it is loss making opportunity to invest. No doubt, beta of stock is high, so there is always opportunity to trade in short term and intraday trading. Chart interpretation Resistance level Support level Descending triangle Rs. 800 Rs. 675
Hence, chart is at confusing level, it may change its chart interpretation and converted into Cup and handle interpretation. If we see current period chart, it has continued with descending triangle chart interpretation. Thus, we can expect that price of TATA Motors are going to decline in long term period. Still trader has opportunity of trading but it is to be noted that fluctuation of price will be in reducing form as it is descending triangle.
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BHEL
Market weight Price as on 1st April 2009 Price as on 31 March 2010 52 weeks high 52 weeks low
st
2.4% 1520.00 2385.45 2549.00 1450.00

Total Capital Employed BHEL Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of Capital Cost of Equity Reserves & Surplus Cost of Debt Weighted Average Cost of Capital Equity share capital Reserves & surplus Secured & Unsecured Debt Rs. 489.52 15427.84 127.75 16045.11 Economic Value Added Economic Value Added per share = = = = NOPAT (TC * WACC) 1585.06 (16045.11 * 1.10703) 1407.44 Cr. 19.17 Rs 30 Weight 0.0305 0.9615 0.0080 Cost of Capital 0.9768 0.9768 17.3335 WACC 0.0298 0.93922 0.13801 1.10703 Div. / Int. 23.3 33.5 Fund / MP 2385.45 15427.84 127.75 Cost 0.9768 0.9768 17.3335 Rs. in cr. 489.52 15427.84 127.75 16045.11 1585.06 Cr.
Mkt. Price 1-Apr-09 31-Mar-10 1520.00 2385.45
EVA per share 19.17
Expected (1+3) 1539.17
Valued (2-4) +846.28
Market price of share of BHEL as on 1st April 2009 was Rs. 1520
Economic Value Addition during the financial year 2009-10 is 19.17 Rs. to each share. Fundamentally value of share price should be 1539.17 Rs. at the end of year.
But the market shows over valuation by Rs. 846.28.
Technical Analysis
Beta Value Interpretation Stock Return vs. Market Return BSE 30 Stock 1st April 2009 9901 1520 31st March 2010 17527 2385.45 Difference 7626 865.5 Return 77.02% 56.94% 0.81
Chart interpretation Chart is moving very stable. Stock has changed its chart interpretation in the month of May 2009. Earlier stock had made U shape chart interpretation and currently the chart is performing at Flag chart interpretation. Hence, stock is in upward trend. It is to be noted that after changing its chart interpretation volumes are reduced. As far as long term investment is concern investment in stock is preferable to conservative investors who are expecting stable growth even with low return than the market. After completing chart trend, it is expected that there will be jump in price as continuing upward trend. Chart interpretation Resistance level Support level Flag - Upward Rs. 2440 Rs. 2375
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DLF Limited
Market Weight Price as on 1st April 2009 Price as on 31 March 2010 52 weeks high 52 weeks low
st
0.63% 167.3 308.9 165.4 475.0

Total Capital Employed DLF Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of Capital Div. / Int. Cost of Equity Reserves & Surplus Cost of Debt Weighted Average Cost of Capital Equity share capital Reserves & surplus Secured & Unsecured Debt Rs. 339.44 12035.39 9614.97 21989.8 Economic Value Added Economic Value Added per share = = = = NOPAT (TC * WACC) 1365.86 (21989.80 * 2.79846) 750.49 Cr. 4.42 32 Weight 0.0154 0.5473 0.4372 Cost of Capital 0.6475 0.6475 5.5675 WACC 0.00997 0.35438 2.43411 2.79846 2 809.86 Fund / MP 308.9 12035.39 9614.97 Cost 0.6475 0.6475 5.5675 Rs. in cr. 339.44 12035.39 7979.97 1635.00 21989.80 1365.86 Cr.
Mkt. Price 1-Apr-09 31-Mar-10 167.3 308.9
EVA per share 4.42
Expected (1+3) 171.72
Valued (2-4) 137.18
Market price of share of DLF as on 1st April 2009 was Rs.167.3

Economic Value Addition during the financial year 2009-10 is Rs. 4.42 to each share. Fundamentally value of share price should be Rs. 171.72 at the end of year.
But the market shows over valuation by Rs. 137.18
Technical Analysis
Beta Value Interpretation Stock Return vs. Market Return BSE 30 Stock 1st April 2009 9901 167.3 31st March 2010 17527 308.9 Difference 7626 141.6 Return 77.02% 84.64% 1.43
Chart interpretation Stock has very good opening on listing. Stock touched to around Rs. 1200 and than after stock is constantly in downward falling. Ending of trend it was always success in making support but this it was not able to go up side. After making it always goes for next downtrend. In short, as far as long term investment is concern this stock makes negative impression. It is advisable to not invest in this stock. Hence, short term trader can take advantage by making short call. At the end of year it was good call for short term traders to earn short term profit. Currently stock is short term upward trend and investor should go with this stock. Chart interpretation Resistance price Support price Flag Down trend Rs. 320 Rs. 295
33
NTPC
Market weight Price as on 1 April 2009 Price as on 31st March 2010 52 weeks high 52 weeks low
st
1.97% 180.50 207.25 208.20 176.05

Total Capital Employed NTPC Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of Capital Cost of Equity Reserves & Surplus Cost of Debt Weighted Average Cost of Capital Equity share capital Reserves & surplus Secured & Unsecured Debt Rs. Weight Cost of Capital WACC 8245.5 0.0823 0.6006 0.0823 54192 0.5407 0.6006 0.5407 37797 0.3771 3.1534 0.3771 100234.5 Economic Value Added Economic Value added per share = = = = NOPAT (TC * WACC) 10594.20 (100443.70 * 1.56322) 9024.05 Cr. 10.94 34 1.56322 Div. / Int. 3.8 1808.9 Fund / MP 632.65 54192.00 37797.00 Cost 0.6006 0.6006 3.1634 Rs. in cr. 8245.50 54192.00 9079.90 28717.10 209.20 100443.70 10594.20 Cr.
Mkt. Price 1-Apr-09 31-Mar-10 180.50 207.25
EVA per share 10.94
Expected (1+3) 191.44
Valued (2-4) 15.81
Market price of share of NTPC as on 1st April 2009 was Rs. 180.50 Economic Value Addition during the financial year 2009-10 is Rs. 10.94 to each share. Fundamentally value of share price should be Rs. 191.44 at the end of year. But the market shows over valuation by Rs. 15.81
Technical Analysis
Chart interpretation During the year volumes are reduced as compare to previous year and support price of last trend is just broken at the end of year. As the support price is broken now it is expected to go down side. Target price is expected to go near to Rs.165 Thus; stock is not much attractive even for short term investment. On the other hand, beta is also very low, so return in intra-day trading is also not much attractive. There is just starting of new trend so it can not be identify chart next chart interpretation. At end of downtrend, Investment for 3-4 year is relatively good as stock will perform at its bottom level. Chart interpretation. Resistance level Support level Infinity Rs. 205 Rs. 200
35
Hero Honda
st
1.03% 1075.00 1942.55 1975.00 1028.00

Total Capital Employed Hero Honda Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of Capital Cost of Equity Reserves & Surplus Cost of Debt Weighted Average Cost of Capital Equity share capital Reserves & surplus Secured & Unsecured Debt Rs. Weight Cost of Capital WACC 39.94 0.0154 5.6627 0.08721 3425.08 0.5473 5.6627 3.0992 66.03 0.4372 2.6528 1.1598 3531.05 Economic Value Added = = = NOPAT (TC * WACC) 2686.64 (3691.68 * 4.34621) 2526.19 Cr. 36 4.34621 Div. / Int. 110 2.65 Fund / MP 1942.55 3425.08 66.03 Cost 5.6627 5.6627 2.6528 Rs.in cr. 39.94 3425.08 66.03 160.63 3691.68 2686.64 Cr.
Economic Value Added Mkt. Price 1-Apr-09 31-Mar-10 1075.00 1942.55
12.65 EVA per share 12.65 Expected (1.+3) 1087.65 Valued (2-4) 854.90
Market price of share of Hero Honda as on 1st April 2009 was Rs. 1075
Economic Value Addition during the financial year 2009-10 is Rs.12.65 to each share. Fundamentally value of share price should be Rs. 1087.65 at the end of year.
Technical Analysis
Beta Value Interpretation Stock Return vs. Market Return BSE 30 Stock 1st April 2009 9901 1075 31st March 2010 17527 1944.4 Difference 7626 869.4 Return 77.02% 80.87% 0.52
Chart interpretation During the year there is good movement in stock with increasing value and consistence volume. Stock is moving very positively. It has just completed Ascending triangle chart interpretation. At the same time moving average is also near to current price, so there are very less chance to go down side. From this point we can expect increasing trend considering ascending triangle. In addition to this stock has just crossed resistance level. Thus ii is good opportunity for short term as well as long term investor to invest their money. Chart interpretation Resistance level Support level Ascending triangle Rs. 2150 Rs. 1650
37
Bajaj Auto
st
1.29% 312.50 1005.00 1020.00 300.05

Total Capital Employed Bajaj Auto Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of Capital Cost of Equity Reserves & Surplus Cost of Debt Weighted Average Cost of Capital Equity share capital Reserves & surplus Secured & Unsecured Debt Rs. Weight Cost of Capital WACC 1446.8 1446.80 0.0338 1.9853 27836.6 27836.60 0.6504 1.9853 13515.6 13515.60 0.3158 0.2925 42799 Economic Value Added Economic Value Added = = = = NOPAT (TC * WACC) 25,640.80 (56055.00 * 1.45073) 24827.60 Cr. 1715.99 38 1.45073 Div. / Int. 40 59.8 Fund / MP 1005.00 27836.60 13515.60 Cost 1.9853 1.9853 0.2925 Rs.in cr. 1,446.80 27,836.60 13,385.80 129.8 13,256.00 56055.00
25,640.80 Cr.
Mkt. Price 1-Apr-09 31-Mar-10 624.35 2014.80
EVA per share 1715.99
Expected (1+3) 2340.34
valued (2-4) --325.54
Market price of share of DLF as on 1st April 2009 was Rs. 624.35
Economic Value Addition during the financial year 2009-10 is Rs. 1715.99 to each share. Fundamentally value of share price should be Rs 2340.34 at the end of year.
But the market shows under valuation by Rs. 325.54
Technical Analysis
Chart interpretation In last two years stock has performed normally. There was fluctuation but it was moving within its range. In the first quarter, it cross resistance level and than picks it new upward trend. This shows that company is going to make new lifetime high. As the stock is low volume traded there is very less fluctuation in price of share. Price is touching very volatile and every time it crosses short term trends. Until the stock crosses its resistance level in short term trend, we can expect positive moves from the stock. Investor should be careful if it crosses support level as it is expected correction. Chart interpretation Resistance level Support level Fast Upward Rs. 1040 Rs. 945
39
Reliance Communication
st
0.44% 176.00 170.70 353.90 154.40

Total Capital Employed Reliance Communication Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of Capital Cost of Equity Reserves & Surplus Cost of Debt Weighted Average Cost of Capital Equity share capital Reserves & surplus Secured & Unsecured Debt Rs. Weight Cost of Capital WACC 1032.01 0.0138 0.4979 0.00685 49466.88 0.6598 0.4979 0.32849 24478.28 0.3265 3.0058 0.98132 74977.17 Economic Value Added Economic Value Added per share = = = = NOPAT (TC * WACC) 1043.88 (74977.17* 1.31667) 56.68 Cr. 0.27 40 1.31667 Div. / Int. 0.85 1113.13 Fund / MP 170.7 49466.88 24478.28 Cost 0.4979 0.4979 3.0058 Rs. in cr. 1032.01 49466.88 3000.00 21478.28 74977.17
1043.88 Cr.
Mkt. Price 1-Apr-09 31-Mar-10 176.00 170.70
EVA per share 0.27
Expected (1+3) 176.27
valued (2-4) -6.27
Market price of share of RCOM as on 1st April 2009 was Rs. 176.00
But the market shows under valuation by Rs. 6.27.
Technical Analysis
Beta Value Interpretation Stock Return vs. Market Return BSE 30 Stock 1st April 2009 9901 176.00 31st March 2010 17527 170.70 Difference 7626 -6.70 Return 77.02% -3.80% 1.18
Chart interpretation In the forth quarter share price of Reliance communication is flat. Hence, this price level shows strong support at this price as it is near to lower price of last down ward trend. Since last two years there is no much attractive performance by company share price and moreover current price is also near to its bottom. Still price of company is in down trend and no much more expectation from company. It is to be noted that if company breaks its support level than it may perform very badly further. Even there is no much fluctuation for intraday trading or short term trading. Chart interpretation Resistance level Support level Sideway trend Rs. 225 Rs. 145
41
TATA Power
Market weight Price as on 1st April 2009 Price as on 31st March 2010 52 weeks high 52 weeks low 1.35% 768.75 1372.60 1504.00 362.00

Total Capital Employed TATA Power Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Capital contribution from customers Special appropriation toward project cost Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of Capital Cost of Equity Reserves & Surplus Cost of Debt Weighted Average Cost of Capital Cost of Rs. Weight Capital 237.33 0.0144 0.8743 9761.42 0.5918 0.8743 5872.01 0.3560 4.7615 91.41 0.0055 533.61 0.0323 16495.7 8 WACC 0.0125 0.5173 1.6949 Div. / Int. 12 422.99 Fund / MP 1372.6 9761.42 5872.01 Cost 0.8743 0.8783 4.7615 Rs. in cr. 237.33 9761.42 4105.38 1766.63 207.78 91.41 533.61 16078.54 352.85 Cr.
Equity share capital Reserves & surplus Secured & Unsecured Debt Capital contribution from customers Special appropriation toward project cost
2.2249 42
Economic Value Added Economic Value Added per share Mkt. Price 1-Apr-09 31-Mar-10 768.75 1372.60
= = = =
NOPAT (TC * WACC) 1352.85 (16078.54 * 2.2249) 995.12 Cr. 43.83 Expected (1+3) 810.58 valued (2-4) 562.02
EVA per share 41.83
Market price of share of TATA Power as on 1st April 2009 was Rs. 768.75
Technical Analysis
Chart interpretation Up to forth quarter 2009-10, stock was in upward trend. Company has repeating chart interpretation with U shape. Now company is going for new U as it has crossed support level. It is expected that share price of share will be in down trend for next 2-3 months. Volatility of share is there, so there is opportunity to make short term calls. First week of New Year is favorable for short selling. as considering short term call. Chart interpretation is very clear and continuously repeating so there is no much risk in trade with shock. Chart interpretation Resistance level Support level U shape Rs. 1325 Rs. 1120
43
TATA Steel
st
2.05% 207.05 632.65 661.00 203.00

Total Capital Employed TATA Steel Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of Capital Cost of Equity Reserves & Surplus Cost of Debt Weighted Average Cost of Capital Equity share capital Reserves & surplus Secured & Unsecured Debt Rs. Weight Cost of Capital WACC 887.41 0.0143 1.2645 0.01809 36074.39 0.5817 1.2645 0.73552 25057.20 0.4040 4.8755 1.96982 62019 Economic Value Added Economic Value Added per share = = = = NOPAT (TC * WACC) 8369.22 (62886.67 * 2.72343) 6656 Cr. 75.02 44 2.72343 Div. / Int. 8 1848.19 Fund / MP 632.65 36074.39 25057.20 Cost 1.2645 1.2645 4.8755 Rs. in cr. 887.41 36074.39 2259.32 22797.88 867.67 62886.67 369.22 Cr.
Mkt. Price 1-Apr-09 31-Mar-10 207.05 632.65
EVA per share 75.02
Expected (1-3) 282.07
valued (2-4) 350.58
Market price of share of TATA Steel as on 1st April 2009 was Rs. 207.05
Economic Value Addition during the financial year 2009-10 is Rs. 75.02 to each share. Fundamentally value of share price should be Rs.282.07 at the end of year.
Technical Analysis
Beta Value Interpretation Stock Return vs. Market Return 1st April 2009 9901 207.05 31st March 2010 17527 632.65 Difference 7626 425.60 Return 77.02% 205.55% 1.43
BSE 30 Stock
Chart interpretation Chart is showing good position to make investment. It has put way almost more than half of its trend but still there is good opportunity to make investment. At the bottom level of price it has crossed its resistance level with higher volume which shows positive indication for increase in price. Volumes are also much attractive at low price, so makes strong support at its bottom level. As far as upward trend is concern, it will continue for 250 to 280 more than current price. Chart interpretation Resistance level Support level Flag - upward Rs. 730 Rs. 610
45
Hindalco
Market weight Price as on 1 April 2009 Price as on 31 March 2010 52 weeks high 52 weeks low
st st
1.89% 52.00 181.25 185.05 50.45

Total Capital Employed HINDALCO Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of Capital Cost of Equity Reserves & Surplus Cost of Debt Rs. Equity share capital Reserves & surplus Secured & Unsecured Debt 191.37 27715.61 6356.9 34263.88 Economic Value Added Economic Value Added per share = = = = NOPAT (TC * WACC) 8369.22 (62886.67 * 2.72343) 6656 Cr. 34.77 46 Div. / Int. 1.35 278 Weight 0.0056 0.8089 0.1855 Fund / MP 181.25 27715.61 6356.9 Cost of Capital 0.7448 0.7448 2.8907 Cost 0.7448 0.7448 2.8907 WACC 0.00416 0.60246 0.53631 1.14292 Rs. in cr. 191.37 27715.61 5153.9 1203 1366.44 35630.32
717.28 Cr.
Mkt. Price 1-Apr-09 31-Mar-10 52.00 181.25
EVA per share 34.77
Expected (1+3) 86.77
valued (2-4) 94.48
Market price of share of HINDALCO as on April 2009 was Rs. 52.00

Technical Analysis
BSE 30 Stock
Chart interpretation From the short term point of view, movement of stock is unconscious as it has crossed resistance level and again it come back below that. Crossing resistance level is indication for increase in price. If we consider long term chart, than we can say that it is in upward trend and movements are very sure because of high volumes. Hence, if we assume that stock will fall in shorter period of time than it makes chart interpretation of Cup with Handle. According to this chart interpretation there will high jump in price. Thus, it is good opportunity to invest in this stock. Chart interpretation Resistance level Support level Cup with Handle Rs. 190 Rs. 155
47
TATA Consultancy Services

st
4.58 536.00 780.65 829.00 272.00

Total Capital Employed TATA CONSULTING SERVICES Ltd Particular Share Capital( Equity Shares + Preference shares) Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Particular Cost of Equity Reserves & Surplus Cost of Debt Particular Equity share capital Reserves & surplus Secured & Unsecured Debt TOTAL Economic Value Added Economic Value Added per share Mkt. Price Rs. n crore 295.72 14820.90 29.25 6.49 0.00 15152.36 64.74 Crore
Div./Int. 20 9.54
Fund / MP 780.65 14820.90 35.74
Cost 2.5620 2.5620 17.6439
Rs. Weight Cost of Capital WACC 295.72 0.0195 2.5620 0.05 14820.90 0.9781 2.5620 2.50596 35.74 0.0024 17.6439 0.04162 15152.36 = = = = NOPAT (TC * WACC) 6264.74- (15152.36*2.59757) 5871 Crore 19.85 Expected 2.59757
valued 48
1-Apr-09 536.00
31-Mar-10 780.65
EVA per share 19.85
(1+3) 555.85
(2-4) +224.8
Market price of share of TCS as on 1st April 2009 was Rs. 19.85
Technical Analysis
Chart interpretation Chart interpretation of this company is having long trends of upward and downtrend. At end of the year price is near to top price of previous upward trend. If it crosses lifetime high price than stock will go for new high price i.e. stock will be in upward trend. Chart interpretation is not much clear in short term as well as long term duration. Thus, it is difficult to determine what will be chart interpretation in future. There is possibility of both sides. Chart interpretation Resistance level Support level Indefinite Rs. 845 Rs. 800
49
Reliance Industry Limited

st
12.18% 1523.00 1074.25 1186.50 748.65

Total Capital Employed RELIANCE INDUSTRIES LTD Particular Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of Capital Particular Cost of Equity Reserves & Surplus Cost of Debt Weighted average cost of capital Particular Equity share capital Reserves & surplus Secured & Unsecured Debt TOTAL Economic Value Added Economic Value Added per share Mkt. Price Div./Int. 7 1997 Fund / MP 1074.25 125095.97 62494.69 Cost 0.6516 0.6516 2.1122 Rs. In crore 3270.37 125095.97 11670.5 50824.19 0 190861.03 0490.22 Crore
Rs. 3270.37 125095.97 62494.69 190861.03 = = = =
Weight 0.0171 0.6554 0.3274
Cost of Capital 0.6516 0.6516 2.1122
WACC 0.01117 0.42708 0.69161 1.12985
NOPAT (TC * WACC) 20490.22 (190861.03*1.12985) 18333.77 Crore 6.06 Expected valued 50
1-Apr-09 1523.00
31-Mar-10 1074.25
EVA per share 6.06
(1+3) 1529.06
(2-4) -454.81
Market price of share of Reliance as on 1st April 2009 was Rs. 6.06
Economic Value Addition during the financial year 2009-10 is Rs. 6.06 to each share. Fundamentally value of share price should be Rs. 1529.06 at the end of year. But the market shows under valuation by Rs.454.81
Technical Analysis
Beta Value Interpretation Stock Return vs. Market Return BSE 30 Stock 1st April 2009 9901 1523.00 31st March 2010 17527 1074.25 Difference 7626 -448.75 Return 77.02% -29.46% 1.05
Chart interpretation Reliance industry has large portion of capitalized value in market. So movements of stock are probably near to market movements. Chart is showing contentiously reducing price fluctuation and volatility in last two quarter. By this chart interpretation is very clear, it is performing with Pennant chart interpretation. In short term investment it is not much more attractive and as far as long term investment is concern future long term trend is not predictable. It will depend on market movement according to that it will go further. Chart interpretation Resistance level Support level Pennant Rs 1050 Rs. 1000
51
ONGC
st
3.25% 780.00 1098.70 318.60 188.35

Total Capital Employed ONGC Particular Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of capital Particular Cost of Equity Reserves & Surplus Cost of Debt Weighted average cost of capital Particular Equity share capital Reserves & surplus Secured & Unsecured Debt TOTAL Economic Value Added Economic Value Added per share D/I 33 68.65 Fund / MP 1098.70 85143.72 16405.64 Cost 3.0035 3.0035 0.2766 Rs.in crore 2138.89 85143.72 0.00 16405.64 0.00 103688.25
20388.01 Crore
Rs. Weight Cost of Capital WACC 2138.89 0.0206 3.0035 0.06196 85143.72 0.8212 3.0035 2.46633 16405.64 0.1582 0.2766 0.04376 103688.25 = = = = NOPAT (TC * WACC) 20388.01- (103688.25 * 2.57205) 17721 Crore 2.85 52 2.57205
Mkt. Price 1-Apr-09 31-Mar-10 780.00 1098.70
EVA per share 2.85
Expected (1+3) 782.85
valued (2-4) 315.85
Market price of share of Reliance as on 1st April 2009 was Rs. 780.
Economic Value Addition during the financial year 2009-10 is Rs. 2.85 to each share. Fundamentally value of share price should be Rs. 782.85 at the end of year. But the market shows over valuation by Rs.315.85.
Technical Analysis
BSE 30 Stock
Chart interpretation In the forth quarter, share was performing with downward trend. When price lower, there is good volumes and with high price it shows lesser amount of attractiveness. As the stock price is near to higher level it is less attractive for long term investors. It is advisable to withdraw money at this level. If price crosses 250 with its downward trend, there will be continuation of downward trend for few more months. Probably considering past chart interpretation it is expected to go at those levels. Stock performs within particular range only which creates limits to perform. Chart interpretation Resistance level Support level U shape Rs. 295 Rs. 265
53
ICICI Bank
st
7.82% 349.70 952.50 965.00 324.00

Total Capital Employed ICICI BANK Particular Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of capital Particular Cost of Equity Reserves & Surplus Cost of Debt Weighted average cost of capital Particular Equity share capital Reserves & surplus Secured & Unsecured Debt TOTAL Economic Value Added Economic Value Added per share D/I 12 17592.57 Fund / MP 952.50 50503.48 202016.6 Cost 1.2598 1.2598 5.7563 Rs.in crore 1114.89 50503.48 0.00 202016.60 0.00 253634.97 1869.21 Crore
Rs. Weight Cost of Capital WACC 1114.89 0.0044 1.2598 0.00554 50503.48 0.1991 1.2598 0.25085 202016.60 0.7965 5.7563 4.58481 253634.97 = = = = NOPAT (TC * WACC) 1869.21 (253634.97*4.8412) -10410 Crore -93.37 54 4.8412
Mkt. Price 1-Apr-09 31-Mar-10 349.70 952.50
EVA per share -93.37
Expected (1+3) 256.33
valued (2-4) 696.17
Economic Value Addition during the financial year 2009-10 is Rs. -93.37 to each share. Fundamentally value of share price should be Rs. 256.33 at the end of year. But the market shows over valuation by Rs.696.17
Technical Analysis
BSE 30 Stock
Chart interpretation Quarter 3 and 4 was good for this stock. It has increased its value almost more than double. So normally investors wants to leave hands with such stock. But chart interpretation of this share is exceptional. After completing last upward trend, it has started down trend. During this period it has crossed resistance level and able to be stable at that price. This means that price of share is going for increase in price. At the same time, it has just touched to top price. If price cross this level than rule of left solder will apply and share will go for new high. Stock is almost on prescribed position therefore, it advisable to stay with stock and wait for new high. Chart interpretation Resistance level Support level Short upward Rs. 950 Rs. 800
55
Bharti Airtel
Market weight Price as on 1 April 2009 Price as on 31st March 2010 52 weeks high 52 weeks low Economic Valued Added Total Capital Employed BHARTI AIRTEL Particular Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of capital Particular Cost of Equity Reserves & Surplus Cost of Debt Weighted cost of capital Particular Equity share capital Reserves & surplus Secured & Unsecured Debt TOTAL Economic Value Added Economic Value Added per share Div / Int 1 855.65 Fund / MP 312.55 34650.19 5038.92 Cost 0.3199 0.3199 11.2243 Rs.in crore 1898.77 34650.19 39.43 4999.49 0.00 41587.88
st
3.09% 312.90 312.55 405.00 269.65
12692.63Crore
Rs. Weight Cost of Capital WACC 1898.77 0.0457 0.3199 0.01461 34650.19 0.8332 0.3199 0.26653 5038.92 0.1212 11.2243 1.35997 41587.88 = = = = NOPAT (TC * WACC) 12692.63 (41587.88*1.64111) 12010 Crore 1.63 1.64111
56
Mkt. Price 1-Apr-09 31-Mar-10 626.40 312.55
EVA per share 1.63
Expected (1+3) 628.03
valued (2-4) -315.48
Economic Value Addition during the financial year 2009-10 is Rs. 1.63 to each share. Fundamentally value of share price should be Rs. 628.03 at the end of year. But the market shows under valuation by Rs.315.48
Technical Analysis
Beta Value Interpretation Stock Return vs. Market Return 1st April 2009 9901 626.40 31st March 2010 17527 312.55 Difference 7626 -310.85 Return 77.02% -49.62% 0.75
BSE 30 Stock
Chart interpretation Over the last two years, there is consistence support at Rs. 275. Though technically stock is looking strong as good support. Considering short price movement there is two possibilities, it may go either for descending triangle or falling wedge. Here if we consider past price movement, there was bounce back in price considering support level of Rs. 275. If we assume the same interpretation than we can expect that stock is performing with falling wedge. Now, falling wedge is considered as good indication for upward price. After short correction in stock there will be increase in price with good volume. Thus, we can expect positive returns from this stock in future. Chart interpretation Resistance level Support level Falling wedge Rs. 310 Rs. 275
57
Infosys
st
10.28 1331.15 2615.95 2821.40 1300.05

Total Capital Employed INFOSYS TECHNOLOGIES Ltd Particular Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of capital Particular Cost of Equity Reserves & Surplus Cost of Debt Weighted cost of capital Particular Equity share capital Reserves & surplus Secured & Unsecured Debt TOTAL Economic Value Added Economic Value Added per share = = = = Div / Int 25 0 Fund / MP 2615.95 21749.00 0 Cost 0.9557 0.9557 0 Rs.in crore 287.00 21749.00 0.00 0.00 0.00 22036.00 5876 Crore
Rs. Weight Cost of Capital WACC 287.00 0.0130 0.9557 0.01245 21749.00 0.9870 0.9557 0.94325 0.00 0.0000 0.0000 0 22036 NOPAT (TC * WACC) 5876 (22036*0.9557) 5665 Crore 98.69 58 0.9557
Mkt. Price 1-Apr-09 31-Mar-10 1331.15 2615.95
EVA per share 98.69
Expected (1+3) 1429.84
valued (2-4) 1186.11
Economic Value Addition during the financial year 2009-10 is Rs. 98.69 to each share. Fundamentally value of share price should be Rs. 1429.84 at the end of year. But the market shows over valuation by Rs.1186.11
Technical Analysis
BSE 30 Stock
Chart interpretation Stock is trading with good and consistence volume. Last high of this share is near to Rs. 2000. In the second quarter, due to good result and strong fundamental it crossed its last high i.e. now if we consider technically price prediction than we have to consider line joining left solder and previous high. Due to high difference between left solder and previous high, there is increasing price over next six month. Price is touching very volatile and every time it crosses short term trends. Until the stock crosses its resistance level in short term trend, we can expect positive moves from the stock. Investor should be careful if it crosses support level as it is expected correction. Chart interpretation Resistance level Support level Indefinite Rs. 2760 Rs. 2500
59
Maruti Suzuki
st
1.22% 780.00 1417.95 1740.00 780.00

Total Capital Employed Maruti Suzuki India Ltd. Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of capital Cost of Equity Reserves & Surplus Cost of Debt Weighted average cost of capital Equity share capital Reserves & surplus Secured & Unsecured Debt Rs. Weight Cost of Capital WACC 144.50 0.0114 0.4231 0.00483 11690.60 0.9237 0.4231 0.39081 821.40 0.0649 2.6958 0.17496 12656.5 0.5706 Div. / Int. 6 33.5 Fund / MP 1417.95 11690.60 821.40 Cost 0.4231 0.4231 2.6958 Rs.in crore 144.50 11690.60 26.50 794.90 0.00 12656.50 2887.40 Crore
60
Economic Value Added Economic Value Added per share Mkt. Price 1-Apr-09 31-Mar-10 780.00 1217.95
= = = =
NOPAT (TC * WACC) 2887.40 (12656.50 *0.5706) 2815.18 Crore 97.44 Expected (1+3) 877.44 valued (2-4) 340.51
EVA per share 97.44
Economic Value Addition during the financial year 2009-10 is Rs. 97.44 to each share. Fundamentally value of share price should be Rs. 877.44 at the end of year But the market shows over valuation by Rs.340.51.
Technical Analysis
BSE 30 Stock
Chart interpretation If we consider long term chart, technically we can say this stock is overvalued by market. Hence, due to consistence volume we can not expect large fall in price, but there is chances of short correction in stock. At the same time chart interpretation is also giving negative sign for further price movement considering descending triangle. There is no doubt that there is no any opportunity for short term investor. There is only opportunity for speculator to earn money from this stock by considering respective days position. Chart interpretation Resistance level Support level Descending triangle Rs. 1450 Rs. 1370
61
Mahindra & Mahindra

st
2.12% 384.85 541.35 594.90 188.75

Total Capital Employed Mahindra & Mahindra ltd. Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of capital Cost of Equity Reserves & Surplus Cost of Debt Weighted average cost of capital Equity share capital Reserves & surplus Secured & Unsecured Debt Rs. Weight Cost of Capital WACC 282.95 0.0265 1.7549 0.04645 7527.60 0.7041 1.7549 1.23567 2880.15 0.2694 0.6382 0.17194 10690.7 Economic Value Added Economic Value Added per share = = = = NOPAT (TC * WACC) 2336.49 (10690.70 *1.45405) 2181.04Crore 37.71 62 1.45405 Div. / Int. 9.5 27.81 Fund / MP 541.35 7527.60 2880.15 Cost 1.7549 1.7549 0.6382 Rs.in crore 282.95 7527.60 602.45 2277.70 0.00 10690.70 2336.49 Crore
Mkt. Price 1-Apr-09 31-Mar-10 384.85 841.35
EVA per share 37.71
Expected (1+3) 422.56
valued (2-4) 418.79
But the market shows over valuation by Rs.418.79.
Technical Analysis
BSE 30 Stock
Chart interpretation Price movement is very similar to Maruti Suzuki, only the difference is in early stage Maruti Suzuki has larger amount of volume as compare to high price level at the end of year where as in case of Mahindra & Mahindra it is inverse. With increasing price volumes are also increasing. So technically stock will give marginal return depending on volume. And it is be noted that beta value of stock is also high, thus in this case we can go with this stock considering market expectation. New trend is just starting so we can not make clear chart interpretation but we can invest for short term considering increasing and consistency in trading volumes. Chart interpretation Resistance level Support level Indefinite Rs. 550 Rs. 475
63
ITC Limited
st
6.4% 185.10 263.05 132.80 97.65

Total Capital Employed ITC LTD. Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of capital Cost of Equity Reserves & Surplus Cost of Debt Weighted cost of capital Equity share capital Reserves & surplus Secured & Unsecured Debt Rs. Weight Cost of Capital WACC 381.82 0.0269 3.8016 0.10242 13682.56 0.9655 3.8016 3.67029 107.71 0.0076 32.7462 0.24888 14172.09 Economic Value Added Economic Value Added per share = = = = NOPAT (TC * WACC) 2336.49 (14957.09*4.02158) 1734.98 Crore 4.54 64 4.02158 Div. / Int. 10 53.36 Fund / MP 263.05 13682.56 107.71 Cost 3.8016 3.8016 32.7462 Rs.in crore 381.82 13682.56 0.00 107.71 785.00 14957.09
2336.49 Crore
Mkt. Price 1-Apr-09 31-Mar-10 185.10 263.05
EVA per share 4.54
Expected (1+3) 189.64
valued (2-4) 73.41
Market price of share of ITC as on 1st April 2009 was Rs. 185.10
Technical Analysis
BSE 30 Stock
Chart interpretation Chart position is much attractive to invest for next six month as the price chart is trading with chart interpretation Cup with Handle. Handle portion is just getting finished. Thus it is very clear position of this stock and attractive to invest for next six month. There will jump in price and have profit for short term investors. At the same time volumes are also good which attracts speculators. Chart interpretation Resistance level Support level Cup with Handle Rs. 135 Rs. 120
65
Reliance Infra limited

st
0.63 995.00 998.35 1370.50 994.00

Total Capital Employed Reliance Infra ltd Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of capital Cost of Equity Reserves & Surplus Cost of Debt Equity share capital Reserves & surplus Secured & Unsecured Debt Div. / Int. 7.1 292.21 Fund / MP 999.05 14366.19 4114.90 Cost 0.7107 0.7107 4.6939 610.44 Crore Rs.in crore 244.92 14366.19 1475.00 2639.90 157.71 18883.72
Rs. Weight Cost of Capital WACC 244.92 0.0131 0.7107 0.0093 14366.19 0.7672 0.7107 0.54523 4114.90 0.2197 4.8755 1.07135 0.0000 0 0.0000 0 18726.01 1.62588 = = = = NOPAT (TC * WACC) 610.44 (18883.72 * 1.62588) 303.41 Crore 12.39 66
Economic Value Added Economic Value Added per share
Mkt. Price 1-Apr-09 31-Mar-10 995.00 998.35
EVA per share 12.39
Expected (1+3) 1008.39
valued (2-4) 10.04
Market price of share of Reliance Infra as on 1st April 2009 was Rs. 995.00
Economic Value Addition during the financial year 2009-10 is Rs. 12.39 to each share. Fundamentally value of share price should be Rs.1008.39 at the end of year. But the market shows under valuation by Rs.10.04.
Technical Analysis
BSE 30 Stock
Chart interpretation Stock shows negative trend in every December and throughout the year it has very volatile and high volume movement at lower price. Currently price of share is at mid point of its range i.e. between 400 to 1500. So, there is equal possibility for both sides. If we consider short term price movement, we can see that price gets very stable in last quarter. Short term investor will thing about there is good support at this level. But in fact it is not so. Long term chart presents different (negative) mood as chart interpretation is descending triangle. Within shorter period of time we will see falling price of this stock and also expect that it will break support level shortly. Chart interpretation Resistance level Support level Descending triangle Rs. 1025 Rs. 1000
67
Cipla
st st
1.1 216.00 338.35 360.80 214.50

Total Capital Employed CIPLA PHARMACEUTICAL LTD Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of capital Div. / Int. Cost of Equity Reserves & Surplus Cost of Debt 2 23.66 Fund / MP 338.35 5753.51 5.07 Cost 0.5911 0.5911 308.4667 Rs.in crore 160.58 5753.51 0.41 4.66 179.15 6098.31
1041.68 Crore
Equity share capital Reserves & surplus Secured & Unsecured Debt Economic Value Added
Rs. Weight Cost of Capital WACC 160.58 0.0271 0.5911 0.01604 5753.51 0.9720 0.5911 0.57456 5.07 0.0009 4.8755 0.00418 5919.16 0.59477 = = NOPAT (TC * WACC) 1041.68 (6098.31 * 0.59477) 68
= =
1094.54 Crore 12.52 EVA per share 12.52 Expected (1+3) 228.52 valued (2-4) 109.83
Technical Analysis
Beta Value Interpretation Stock Return vs. Market Return 1st April 2009 9901 216.00 31st March 2010 17527 338.35 Difference 7626 122.35 Return 77.02% 56.64 0.45
BSE 30 Stock
Chart interpretation In last two quarter it had made new high considering upward trend. At the end of year chart is having sideway trend and it has both side posibilities. Moving average of stock is lesser than the market price so it is expected that price of share will fall for short term investment. Hence there is no much expectation from this stock. Chart interpretation Resistance level Support level Sideway trend Rs. 330 Rs. 305
69
Wipro
st
1.89 147.60 424.00 451.20 144.00

Total Capital Employed Wipro LTD Rs.in crore Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of capital Div. / Int. Cost of Equity Reserves & Surplus Cost of Debt Equity share capital Reserves & surplus Secured & Unsecured Debt 6 108.6 Fund / MP 424.00 17396.80 55302.00 Cost 1.4151 1.4151 0.1298 293.60 17396.80 0.00 55302.00 0.00 72992.40
4477.40 Crore
Rs. Weight Cost of Capital WACC 293.60 0.0040 1.4151 0.00569 17396.80 0.2383 1.4151 0.33727 55302.00 0.7576 0.1298 0.09834 72992.4 0.4413
= = = =
NOPAT (TC * WACC) 4477.40 (72992.40 *0.4413) 4155.29 Crore 28.30 70
Mkt. Price 1-Apr-09 31-Mar-10 147.60 424.00
EVA per share
Expected (1+3)
valued (2-4)
Economic Value Addition during the financial year 2009-10 is Rs. 4.54 to each share. Fundamentally value of share price should be Rs.189.64 at the end of year. But the market shows over valuation by Rs.73.41.
Technical Analysis
BSE 30 Stock
Chart interpretation Chart has its optimized level. As long term investor we can not expect much more from this chart. But moving average is more than the market price so there is opportunity for short term trading. Investor should be ready to put the stock even with loss, if price does not goes in upside. Chart interpretation Resistance level Support level Sharp falling Rs. 420 Rs. 380
71
Jindal Steel Ltd

st
1.94 200.00 702.25 749.90 191.40

Total Capital Employed Jindal Steel Ltd Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of Capital Cost of Equity Reserves & Surplus Cost of Debt Div. / Int. 9.5 862.68 Fund / MP 702.25 9179.23 11585.10 Cost 1.3528 1.3528 4.9221 Rs.in crore 527.11 9179.23 8987.51 2597.59 1964.95 23256.39 3297.76 Crore
Equity share capital Reserves & surplus Secured & Unsecured Debt Economic Value Added Economic Value Added per share
Rs. Weight Cost of Capital WACC 527.11 0.0248 1.3528 0.03349 9179.23 0.4311 1.3528 0.58322 11585.10 0.5441 4.9221 2.67821 21291.44 3.29493 = = = = NOPAT (TC * WACC) 3297.76 (23256.39 *3.29493) 2351.48 crore 534.44 72
Mkt. Price 1-Apr-09 31-Mar-10 200.00 702.25
EVA per share
Expected (1+3)
valued (2-4)
Market price of share of ITC as on 1st April 2009 was Rs.200

Technical Analysis
Beta Value Interpretation Stock Return vs. Market Return 1st April 2009 9901 31st March 2010 17527 Difference 7626 Return 77.02% 1.1
BSE 30 Stock
Chart interpretation It has same position as Wipro. Chart has its optimized level. As long term investor we can not expect much more from this chart. But moving average is more than the market price so there is opportunity for short term trading. Investor should be ready to put the stock even with loss, if price does not goes in upside. Chart interpretation Resistance level Support level sharp falling Rs. 710 Rs. 600
73
HUL LTD
Market weight Price as on 1st April 2009 Price as on 31st March 2010 52 weeks high 52 weeks low 2.16 237.65 239.55 289.70 215.00

Total Capital Employed HUL LTD Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of Capital Cost of Equity Reserves & Surplus Cost of Debt Div. / Int. 6.5 0 Fund / MP 239.55 2365.35 0.00 Cost 2.7134 2.7134 0.00 Rs.in crore 218.17 2365.35 0.00 0.00 0.00 2583.52
3432.37 Crore
Rs. Equity share capital Reserves & surplus Secured & Unsecured Debt 218.17 2365.35 0.00 2583.52 Economic Value Added Economic Value Added per share = = = =
Weight 0.0844 0.9156 0.0000
Cost of Capital 2.7134 2.7134 0.0000
WACC 0.22914 2.48426 0 2.7134
NOPAT (TC * WACC) 3432.37 (2583.52 *2.7134) 3367.2688 Crore 15.43 74
Mkt. Price 1-Apr-09 31-Mar-10 237.65 239.55
EVA per share 15.43
Expected (1+3) 253.08
valued (2-4) -13.53
But the market shows under valuation by Rs.13.53
Technical Analysis
BSE 30 Stock
Chart interpretation From the chart movement we can say that to make long term investment in this stock is very risky. Amount of short term fluctuation is too much which reflects more volatility in price. Hence, speculator should give more interest in this stock. It has support at Rs. 220 which is most important level to maintain range. Moving average is also less than the current market price. So, technically we expect short term fall in price. It is to be noted that if to tough moving average stock cross its support level, there will be creasing pricing of this stock if crosses second support level of Rs. 195. Investor should take into mind this price level to avoid too long investment or loss. Chart interpretation Resistance level Support level Flag downward trend Rs. 240 Rs. 220
75
Larsen & Tourbo Limited

st st
5.86 680.00 1626.35 1709.00 663.00

Total Capital Employed Larsen & Tourbo Limited Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of capital Cost of Equity Reserves & Surplus Cost of Debt Div. / Int. 12.5 505.31 Fund / MP 1626.35 17882.22 6800.83 Cost 0.7686 0.7686 4.9113 5482.75 Crore Rs.in crore 120.44 17882.22 955.73 5845.10 389.27 25192.76
Equity share capital Reserves & surplus Secured & Unsecured Debt
= = = =
NOPAT (TC * WACC) 5482.75 (25192.76 * 1.9045) 5002.95 Crore 83.08 76
Mkt. Price 1-Apr-09 31-Mar-10 680.00 1626.35
EVA per share
Expected (1+3)
valued (2-4)
Technical Analysis
BSE 30 Stock
Chart interpretation Last two year chart shows that when price of share is more than Rs. 1300 than there is decrease in volumes. Hence current price of stock is also trading on this level and there is lower volume with decreasing price. Due this fall is price is very slow and gradual. As far as long term investment is concern it not for long term investment. But there may be short term profit at this level. No doubt that if company shows satisfactory profitability to market than price may go more than this level. Till result is not declared, we cant say about long term investment. Chart interpretation Resistance level Support level Sideway trend Rs. 1640 Rs. 1400
77
HDFC Bank
st
5.34 978.00 1933.50 1952.70 952.00

Total Capital Employed HDFC BANK LTD Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of capital Cost of Equity Reserves & Surplus Cost of Debt Weighted Average Cost of Capital Equity share capital Reserves & surplus Secured & Unsecured Debt Rs. 457.74 21061.84 167404.44 188924.02 Economic Value Added Economic Value Added per share Mkt. Price = = = = NOPAT (TC * WACC) 9389.89 (188924.02 *4.39084) 1094.54 Crore 23.91 Expected Weight Cost of Capital WACC 0.0024 0.6206 0.0015 0.1115 0.6206 0.06919 0.8861 4.8755 4.32015 4.39084 Div. / Int. 12 7786.3 Fund / MP 1933.50 21061.84 167404.44 Cost 0.6206 0.6206 3.0744 9389.89 Crore Rs.in crore 457.74 21061.84 0.00 167404.44 0.00 188924.02
valued 78
1-Apr-09 978.00
31-Mar-10 1933.50
EVA per share 23.91
(1+3) 1001.91
(2-4) 931.59
Technical Analysis
BSE 30 Stock
Chart interpretation Banking sector is leading sector to give direction to the market. In most cases we see that it largely affects market direction. Beta value of stock is also almost near to one, so we can say that stock will move with market direction. Even with low volume as compared to other stock, price movements are good in this stock. In the last quarter stock has just finished its trend. Now we can expect new trend. It is not clearly seen whether next trend will be increasing or decreasing. Short term trend is broken from support level and again it has touched to its resistance level. This shows uncertainty of trend. Hence, moving average of last 15 days is quite less than the market price. So further we can expect decreasing price of share in shot run. Chart interpretation Resistance level Support level Flag Downward Rs. 1920 Rs. 1800
79
HDFC
st
5.81 285.00 542.60 568.90 282.50

Total Capital Employed HDFC LTD Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of capital Cost of Equity Reserves & Surplus Cost of Debt Div. / Int. 36 7063.08 Fund / MP 542.60 14910.55 96565.31 Cost 6.6347 6.6347 4.8348 (9732.65) Crore Rs.in crore 287.11 14910.55 0.00 96565.31 0.00 111762.97
Rs. Weight Cost of Capital WACC 287.11 0.0026 6.6347 0.01704 14910.55 0.1334 6.6347 0.88515 96565.31 0.8640 4.8348 4.17736 111763 5.07955
= = = =
NOPAT (TC * WACC) (9732.65) (111762.97 * 5.07955) (15409.71) crore (336.64) 80
Technical Analysis
BSE 30 Stock
Chart interpretation As the fundamental shows that operating activity of company is very poor. Even with lower volume there is high difference in bid price of share. Due to this, stock gets very fluctuate. It is clear that this stock is only for speculator or short term trader. Comparing moving average and current market price, speculators remains with race but short trader point of view it is not much attractive. Chart interpretation Resistance level Support level Volatile Rs. 535 Rs. 475
81
State Bank of India

st st
5.28 1079.7 1937.90 2489.45 980.00

Total Capital Employed State Bank Of India Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of capital Cost of Equity Reserves & Surplus Cost of Debt Div. / Int. 30 47322.48 Fund / MP 1637.90 65314.32 103011.60 Cost 1.8316 1.8316 30.3657 (1804.99) Crore Rs.in crore 634.88 65314.32 0.00 103011.60 0.00 168960.80
= = = =
NOPAT (TC * WACC) (1804.99) (168960.80 * 3.6874) (8035.25) Crore (126.56) 82
Mkt. Price 1-Apr-09 31-Mar-10 1079.7 1937.90
EVA per share (126.56)
Expected (1+3) 953.14
valued (2-4) 904.76
Market price of share of SBI as on 1st April 2009 was Rs. 1079.70
Economic Value Addition during the financial year 2009-10 is Rs (126.56).to each share. Fundamentally value of share price should be Rs.953.14 at the end of year.
Technical Analysis
BSE 30 Stock
Chart interpretation This stock is more volatile than the market return and it has same direction for movement in price with index value. In the first quarter of current year, stock had made equal level to its previous trend high and maintained very stable level for three months. But after results of third quarter stock succed to cross that level. As it has crossed its last high than we expect new high over next few month. At the same time trend is also In upward trend and still there is positive expectation, thus we can expect positive return from this stock as far as short term duration is concern. But long term investor need continious watch because there are chances to stuck up with high price. Chart interpretation Resistance level Support level Sharp upward Rs. 2170 Rs. 2050
83
Jaypee Group
st
0.64 115.00 149.55 158.00 102.50
Economic value addition

Total Capital Employed Jayprakash Associates ltd Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of capital Cost of Equity Reserves & Surplus Cost of Debt Div. / Int. 1.08 1055.79 Fund / MP 149.55 7771.87 17766.48 Cost 0.7222 0.7222 3.9281 Rs.in crore 424.93 7771.87 11358.01 6408.47 0.00 25963.28
185.32 Crore
Cost of Rs. Weight Capital WACC 424.93 0.0164 0.7222 0.01182 7771.87 0.2993 0.7222 0.21618 17766.48 0.6843 4.8755 3.33627 0.0000 0 0.0000 0 25963.28 3.56427
84
= = = Economic Value Added per share =
NOPAT (TC * WACC) 185.32 (25963.28 * 3.56427) (740.08) Crore (3.48)
Mkt. Price 1-Apr-09 31-Mar-10 115.00 149.55
Expected (1+3) 111.52
valued (2-4) 38.03
Economic Value Addition during the financial year 2009-10 is Rs. (3.48) to each share. Fundamentally value of share price should be Rs. 111.52at the end of year.
Technical Analysis
BSE 30 Stock
Chart interpretation As the fundamental shows that operating activity of company is very poor. Even with lower volume there is high difference in bid price of share. Due to this, stock gets very fluctuate. It is clear that this stock is only for speculator or short term trader. Comparing moving average and current market price, speculators remains with race but short trader point of view it is not much attractive. Chart interpretation Resistance level Support level Volatile Rs. 160 Rs. 136
85
Sterlite Industries India Ltd

Market weight Price as on 1st April 2009 Price as on 31st March 2010 52 weeks high 52 weeks low 765.00 849.50 910.20 746.00
Economic value addition

Total Capital Employed Sterlite Industry ltd Share Capital Reserves and Surplus Secured Loans Unsecured Loans Differed Tax Liability Total Funds Employed Net Operating Profit after Tax Weighted Average Cost of Capital Cost of capital Cost of Equity Reserves & Surplus Cost of Debt Div. / Int. 3.75 256.44 Fund / MP 849.50 22100.00 5322.00 Cost 0.4414 0.4414 3.1850 Rs.in crore 168.08 22100.00 100.00 5222.00 363.81 27953.89
(128.05) Crore
Rs. Weight Cost of Capital WACC 168.08 0.0061 0.4414 0.00269 22100.00 0.8010 0.4414 0.35357 5322.00 0.1929 4.8755 0.94046 27590.08 1.29672 = = = NOPAT (TC * WACC) (128.05) (27953.89 * 1.29672) (234.43) Crore 86
(2.79) Expected (1+3) 762.21 valued (2-4) 87.29
Economic Value Addition during the financial year 2009-10 is Rs. (2.79) to each share. Fundamentally value of share price should be Rs. 762.21 at the end of year.
Technical Analysis
BSE 30 Stock
Chart interpretation Chart has its optimized level. As long term investor we can not expect much more from this chart. But moving average is more than the market price so there is opportunity for short term trading. Investor should be ready to put the stock even with loss, if price does not goes in upside. Chart interpretation Resistance level Support level Sharp falling Rs. 860 Rs. 825
Findings
87
Stock selection is very difficult to investor due to comparatively high risk is involved in stock market. Even with different stock there is also different level of risk. To earn higher return investor are generally agrees to invest in share market. Investor has to predict level of risk i.e. chance of profit and loss considering current position of share price. Fundamental and Technical analysis both are very important to take such decision. Stock selection problem is arising when both the analytical tools shows inverse direction. It is noted that technical analysis is most applicable for short term view. It is easy to take investment decision considering chart interpretation. On the other hand Fundamental helps in long term view. EVA of all companies are not practically comparable because each company has different amount of fund employed and face value of equity share. So it advisable that give weight as per their fund employed in stock. Stock takes the position considering effect of both. So here to select good stock from which can expect negative or positive impact considering analytical tools, we have divided all stock into five levels as follows.
Level 1 Level 2 Level 3 Level 4 Level 5
Level 1 - very strong position from which we can expect good return and low risk Level 2 Good position from which we can expect moderate return Level 3 Neutral position from where degree of risk is high and return are uncertain Level 4 Strategic position will determine return and high risk involved Level 5 Red stock from which investor has to get away and most chances for loss Here, considering levels we have given combine effect of both analytical tools. Primary preference is given to fundamental analysis and than technical analysis considering long term investment decision. From following Ranking Table investor can make balance portfolio of his investment.
Ranking Table
88
Name of Company TATA Motors BHEL DLF NTPC Hero Honda Bajaj Auto RCom TATA Power TATA Steel HINDALCO TCS Reliance Industry ONGC ICICI Bank Bharti Airtel Infosys Tech Maruti Suzuki Mah, Mah. ITC Reliance Infra Cipla Wipro Jindal steel Hindustan Uniliver L &T HDFC Bank HDFC SBI Sterlight Industry Jaypee Asso.
capital employed
Probability 0.018820 0.009123 0.012503 0.057111 0.002099 0.031872 0.042631 0.009142 0.035757 0.020259 0.008615 0.108522 0.058956 0.144214 0.023646 0.012529 0.007196 0.006079 0.008504 0.010737 0.003467 0.041503 0.013223 0.001469 0.014324 0.107420 0.063547 0.096070 0.014762 0.015894
EVA 57.12 19.17 4.42 10.94 12.65 1715.99 0.27 43.83 75.02 34.77 19.85 6.06 2.85 -93.37 1.63 98.69 97.44 37.71 4.54 12.39 12.52 28.3 534.44 15.43 83.08 23.51 -336.64 -126.56 -3.48 -2.49
Weighted EVA 1.075019 0.174890 0.055264 0.624798 0.026553 54.692621 0.011510 0.400698 2.682473 0.704408 0.171017 0.657642 0.168025 -13.465303 0.038544 1.236533 0.701214 0.229225 0.038610 0.133033 0.043412 1.174529 7.067094 0.022666 1.190068 2.525454 -21.392586 -12.158558 -0.051373 -0.039577
Chart int. Descending triangle Flag - Upward Flag - Downward
Rank 8 5 13 17 6 1 12 4 3 9 10 22 8 24 26 15 2 16 14 7 13 21 20 28 11 27 19 12 18 25
33100.02 16045.11 21989.8 100443.7 3691.68 56055 74977.17 16078.54 62886.67 35630.32 15152.36 190861.03 103688.25 253634.97 41587.88 22036 12656.5 10690.7 14957.09 18883.72 6098.31 72992.4 23256.39 2583.52 25192.76 188924.02 111762.97 168960.8 25963.28 27953.89
Indefinite
Ascending triangle Fast upward Sideway trend U shape Flag - Upward Cup with Handle
Indefinite
Pennant U shape
Short upward
Falling wedge Indefinite Descending triangle Indefinite Cup with Handle Descending triangle Sideway trend Sharp falling Sharp falling Flag - Downward Sideway trend Flag - Downward Volatile Sharp upward Volatile
Sharp falling
Following is summary of whole data analysis and interpretation.
89
tock TATA Motors BHEL DLF NTPC Hero Honda Bajaj Auto RCom TATA Power TATA Steel HINDALCO TCS Reliance Industry ONGC ICICI Bank Bharti Airtel Infosys Tech Maruti Suzuki Mah, Mah. ITC Reliance Infra Cipla Wipro Jindal steel Hindustan Uniliver L &T HDFC Bank HDFC SBI Jaypee group Sterlight Industry
Market weight 2.83 2.40 0.63 1.97 1.03 1.29 0.44 1.39 2.05 1.89 4.58 12.18 3.25 7.82 3.09 10.28 1.22 2.12 6.4 0.63 1.1 1.89 1.94 2.16 5.86 5.38 5.81 5.28
Fundamental Analysis EVA per share (Rs.) 57.12 19.17 4.42 10.94 12.65 1715.99 0.27 43.83 75.02 34.77 19.85 6.06 2.85 -93.37 1.63 98.69 97.44 37.71 4.54 12.39 12.52 28.30 534.44 15.43 83.08 23.51 (336.64) (126.56) (3.48) (2.49)
Technical Analysis Beta value 1.53 0.81 1.43 0.57 0.52 0.60 1.18 0.66 1.43 1.66 0.84 1.05 0.68 1.49 0.75 0.76 0.69 1.11 0.76 1.22 0.45 0.81 1.94 0.50 1.04 0.97 1.09 1.16 0.86 0.96 Resistance value 800 2440 320 205 2150 1040 225 1325 730 190 845 1050 295 950 310 2760 145 550 135 1025 320 420 710 240 1640 1920 535 2170 160 860 Support value 675 2375 295 200 1650 945 145 1120 610 155 800 1000 265 800 275 2500 1370 475 120 1000 305 380 600 220 1400 1800 475 2050 136 825 Chart interpretation Descending triangle Flag - Upward Flag - Downward
Indefinite
Ascending triangle Fast upward Sideway trend U shape Flag - Upward Cup with Handle
Indefinite
Pennant U shape
Short upward
Falling wedge Indefinite Descending triangle Indefinite Cup with Handle Descending triangle Sideway trend Sharp falling Sharp falling Flag - Downward Sideway trend Flag - Downward Volatile Sharp upward Volatile
Sharp falling
Conclusion
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The fundamental and Technical analysis both are important while taking the investment decision in stock market. Both methods have different concepts and application. Market executes the stock price considering fundamental as well as technical position. Considering short term price expectation investor should give first preference to technical analysis and than select the stock considering long position. If investor ignores technical position than investor may suffer short term loss or reduced rate of return. So, to maximize return on investment, technical analysis more important with fundamental of company. This project report has given basic idea about how to select the stock and how to allocate preference to each stock.
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Bibliography
Annual reports published for 2009-10 of each company of BSE 30 Charts study is done from web site of Bombay stock exchange - www.bseindia.com for technical analysis Financial data are conducted from money.rediff for financial statement (in calculation of EVA) Module of Financial Management for CA Final for Weighted average cost of capital.
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Introduction to BSE

Economic Value Added

History tends to repeat itself

The importance of Trend

Support and Resistance

Round Numbers and Support and Resistance

Literature review for Technical Analysis

Source of Sample Size

Data Analysis & Interpretation

2.83% 173.00 710.00 792.60 179.85

Economic Valued Added

Economic Value Added

EVA per share 57.12

But the market shows over valuation by 472.93 Rs.

2.4% 1520.00 2385.45 2549.00 1450.00

Economic Valued Added

Mkt. Price 1-Apr-09 31-Mar-10 1520.00 2385.45

EVA per share 19.17

Expected (1+3) 1539.17

Valued (2-4) +846.28

But the market shows over valuation by Rs. 846.28.

0.63% 167.3 308.9 165.4 475.0

Economic Valued Added

Mkt. Price 1-Apr-09 31-Mar-10 167.3 308.9

EVA per share 4.42

Expected (1+3) 171.72

Valued (2-4) 137.18

Market price of share of DLF as on 1st April 2009 was Rs.167.3

But the market shows over valuation by Rs. 137.18

1.97% 180.50 207.25 208.20 176.05

Economic Valued Added

Mkt. Price 1-Apr-09 31-Mar-10 180.50 207.25

EVA per share 10.94

Expected (1+3) 191.44

Valued (2-4) 15.81

1.03% 1075.00 1942.55 1975.00 1028.00

Economic Valued Added

Economic Value Added Mkt. Price 1-Apr-09 31-Mar-10 1075.00 1942.55

But the market shows over valuation by Rs. 854.90.

1.29% 312.50 1005.00 1020.00 300.05

Economic Valued Added

Mkt. Price 1-Apr-09 31-Mar-10 624.35 2014.80

EVA per share 1715.99

Expected (1+3) 2340.34

valued (2-4) --325.54

But the market shows under valuation by Rs. 325.54

0.44% 176.00 170.70 353.90 154.40

Economic Valued Added

Mkt. Price 1-Apr-09 31-Mar-10 176.00 170.70

EVA per share 0.27

Expected (1+3) 176.27

valued (2-4) -6.27

But the market shows under valuation by Rs. 6.27.

Economic Valued Added

EVA per share 41.83

But the market shows over valuation by Rs. 562.02

2.05% 207.05 632.65 661.00 203.00

Economic Valued Added

Mkt. Price 1-Apr-09 31-Mar-10 207.05 632.65

EVA per share 75.02

Expected (1-3) 282.07

valued (2-4) 350.58

But the market shows over valuation by Rs. 350.58