FUNDAMENTAL AND TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR.

1
A final project report submitted to
BIJU PATNAIK UNIVERSITY OF TECHNOLOGY, ODISHA
(For the partial fulfilment of the Requirement of the Degree of MBA)
2016-2018
A
PROJECT REPORT
ON
EQUITY RESEARCH OF AUTOMOBILE SECTOR
Submitted by
ASHIT KUMAR MAHAPATRA
BPUT REGD. No. : 1606258030
UNDER THE GUIDANCE OF
MR.BHAGAVAN BEHERA
BIJU PATNAIK INSTITUTE OF IT & MANAGEMENT STUDIES
BHUBANESWAR

2
Biju Patnaik Institute of IT & Management
ePublications@biitm
Summer Project Report
Management
A REPORT ON EQUITY RESERCH OF AUTOMOBILE SECTOR AT BIRLA
SUN LIFE INSURANCE LIIMTED
MR. ASHIT KUMAR MAHAPATRA
Biju Patnaik Institute of IT & Management Studies, Bhubaneswar
Affiliated to Biju Patnaik University of Technology, Odisha
BPUT Registration Number: 1606258030
E mail: ashitmahapatra007@gmail.com
Internal Faculty Guide: Prof. BHAGAVAN BEHERA, Asst. Prof., BIITM, Bhubaneswar
External Corporate Guide: Mr. DEBENJAN CHATTARJI
Follow this and additional works at: http://www.biitm.ac.in/epublication
Recommended Citation
Ashit kumar mahapatra“A STUDY ON EQUITY RESERCH OF AUTOMOBILE
SECTOR AT BIRLA SUN LIFE INSURANCE LIIMTED”
This Summer Internship Project Report is brought to you by the Faculty of Management at
ePublications@biitm.
It has been accepted for analysis in Management ePublication by an authorized administrator of
ePublications@biitm. For more information, please contact Biju Patnaik Institute of IT &
Management Studies, Bhubaneswar SIP Repository Coordinator at sip.biitm@gmail.com

3
CERTIFICATE OF THE GUIDE
WHOM SO EVER IT MAY CONCERN
This is to certify that the Project Work titled ‘A REPORT ON EQUITY RESEARCH OF
AUTOMOBILE SECTOR’ is a bonafide work of ASHIT KUMAR MAHAPATRA Enroll/Reg.
No: 1606258030 carried out in partial fulfilment for the award of degree of MASTER IN
BUSINESS ADMINISTERATION FOR THE SESSION (2016-2018) of Biju Patnaik University
of Technology, Odisha under my guidance. This project work is original and not submitted earlier
for the award of any degree / diploma or associateship of any other University / Institution. The
thesis:
• Embodies the work of the candidate himself
• Has duly been completed
• Fulfils the requirements of the rules and regulation relating to the summer
internship of Institute,
• Is up to the standard both in respect to contents and language for being referred to
the examiner.
Place: Signature of Guide
Date: Bhagavan Behera

4
DECLARATION
I, ASHIT KUMAR MAHAPATRA hereby declare that the Project Work titled ‘A REPORT ON
EQUITY RESEARCH OF AUTOMOBILE SECTOR’ is the original work done by me and
submitted to the Biju Patnaik University of Technology, Odisha, in partial fulfilment of
requirements for the award of Master of Business Administration is a record of original work
done by me under the supervision of Dr. / Prof. Bhagavan Behera.
Regd. No: 1606258030 Signature of the Student
Date: Ashit Kumar Mahapatra

5
ACKNOWLEDGMENT
“It is not possible to prepare a project report without the assistance & encouragement of
other people. This one is certainly no exception. “On the very outset of this report, I
would like to extend my sincere & heartfelt obligation towards all the personages who
have helped me in this endeavour. Without their active guidance, help, cooperation &
encouragement, I would not have made headway in the project.
I am extremely thankful and pay my gratitude to my faculty MR. BHAGAVAN
BEHERA for his valuable guidance and support.
I extend my Special gratitude to Dr. P. K. Tripathy, Principal of BIJU PATNAIK
INSTITUTE OF IT & MANAGEMENT STUDIES and Prof. Chandra Shekhar,
Placement Manager, for giving me this opportunity.
I also acknowledge with a deep sense of reverence, my gratitude towards my parents and
member of my family, who have always supported me morally as well as economically.
At last but not least gratitude goes to all of my friends who directly or indirectly helped
me to complete this project report.
Any omission in this brief acknowledgement does not mean lack of gratitude.
Thanking You
(ASHIT KUMAR MAHAPATRA)

7
EXCUTIVE SUMMARY
The stock exchange comes in the secondary market. Stock exchange performs
activities such as trading in share, securities, bonds, mutual funds & commodities. Stock
Broking industry is growing at an enormous rate, as more and more people are attracted
towards stock exchange with the hope of making profits.
The Indian automobile industry is going through a phase of rapid change and high
growth. With new projects coming up on a regular basis, the industry is undergoing
technological change. The major players are expanding their plants and focusing on mass
customization, mass production, etc. Nearly every automobile company is investing at a
higher rate than ever before to achieve a high growth trajectory. The overall investment in
the sector has been increasing quite rapidly.

8
Content
CHAPTERS CONTENTS
PAGE
NO.
CHAPTER 1
INTRODUCTION
RESEARCH METHODOLOGY
9-18
CHAPTER 2
COMPANY PROFILE
LITRETURE REVIEW
19-31
CHAPTER 3 THEORITICAL BACKGROUND 32-45
CHAPTER 4
DATA ANALYSIS & INTERPRETATION
FINDINGS AND SUGGESTION 46-64
CHAPTER 5 BIBLIOGRAPHY 65-67

10
Indian Automobile Sector:
The Indian automobile market is one of the largest in the world, both in terms of sales
volume and production. Talking about historical roots of the car market in India, the first
time that a vehicle came on road was in 1897. Till 1930, India did not have any
manufacturing facility and cars were imported directly from other countries. The
landmark decade in the manufacturing process was that of 1940s, in which Indian
companies like Hindustan Motors and Premier started to manufacture cars of other firms.
During the same decade, Mahindra & Mahindra also started to produce utility vehicles.
Soon after independence 1947, Government of India tried to create an automotive
component manufacturing industry in order to supplement the automobile fraternity.
From 1960 to 1980s, the Indian market was dominated by Hindustan Motors, which
gathered a large amount of share due to its Ambassador model. However, during 1950s
till 1960s, the overall industry moved at a slow pace due to trade restrictions set on
imports. Soon after this repressive phase, demand surged but to a smaller extent, which
was mainly seen in the tractor and commercial vehicles segment.
Tata Motors entered the passenger vehicle market in 1991 by launching the Tata Sierra, a
multi utility vehicle. Tata subsequently launched the Tata Estate (1992; a station
wagon design based on the earlier 'TataMobile' (1989), a light commercial vehicle),
the Tata Sumo (1994; LCV) and the Tata Safari (1998; India's first sports utility vehicle).
Slowly and steadily, the economic reforms brought in the led to the entry of major foreign
companies like Hyundai and Honda, which expanded their bases to the country. From
2000 to 2010, almost every major car company expanded its presence to India by
establishing manufacturing facilities across different parts of the country.

11
Indian Financial Market:
Indian financial market is one of the oldest in the world is considered to be the fastest
growing and best among all the market o9f the emerging economies. The history of
Indian capital markets dates back 200 year toward the end of the 18th
century when India
was under the rule of the East India Company. The development of the capital market in
India concentrated around Mumbai where no less than 200 to 250 securities brokers were
active during the second half of the 19th
century. The financial market in India today is
more developed the many other sectors because it was organized long before with the
securities exchange of Mumbai, Ahmadabad and Kolkata were established as early as the
19th
century.
A financial market is a market in which people trade financial securities, commodities,
and other fungible items of value at low transaction cost and at prices that reflect supply
and demand. Securities include stocks and bonds, and commodities include precious
metals or agriculture product. In economics, typically the term market means the
aggregate of possible buyers and sellers of a certain goods or service and the transaction
between them. The term “market” is sometime used for what are more strictly exchange,
organizations that facilitate the trade in financial securities, for example, a stock exchange
or commodity exchange. The may be a physical location like the NSE(National Stock
Exchange), BSE(Bombay Stock Exchange), LSE(London Stock Exchange), JSE(Japan
Stock Exchange) or an electronic system like NASDAQ(National Association of
Securities Dealer Automated Quotations).
Main function of financial market:
a) It provides facilities for interaction between the investors and the borrowers.
b) It provides pricing information resulting from the interaction between buyers and
sellers in the market when they trade the financial assets.
c) It provides security to dealings in financial assets.
d) It ensures liquidity by providing a mechanism for an investor sell the financial
assets.
e) It ensures low cost of transactions and information.

12
TYPE OF FINANCIAL MARKET
Money Market:
The money market is a market for short-term funds, which deals in financial assets whose
period of maturity is upto one year. It should be noted that money market does not deal in
cash or money as such but simply provides a market for credit instruments such as bills of
exchange, promissory note, commercial paper, treasury bills, etc. These financial
instruments are close substitute of money. This instrument helps the business units, other
organizations and the government to borrow the funds to meet their short-term
requirement.
Capital Market:
Capital market may be defined as a market dealing in medium and long-term funds. It is
an institutional arrangement for borrowing medium and long-term funds and which
provides facilities for marketing and trading of securities. So it constitutes all long-term
borrowings from bank and financial institutions, borrowings from foreign markets and
raising of capital by issue various securities such as shares debenture, bonds, etc. The
market where securities are traded known as Securities market. It consists of two different
segment namely primary and secondary market.

13
PRIMARY MARKET:
The Primary Market consists of arrangements, which facilitate the procurement of long-
term funds by companies by making fresh issue of shares and debentures. Companies
make issue of share and/or debentures at their formation stage and, if necessary,
subsequently for the expansion of business. It is usually done through private placement
to friends. Relatives and financial institutions or by making public issue. In any case, the
companies have to follow a well-established legal procedure and involve number of
intermediaries such as underwriters, brokers, etc. who from an integral part of the primary
market. The major players in the primary market are merchant bankers, mutual funds,
financial institutions, and individual investors etc.
SECONDARY MARKET:
The secondary market known as stock market or stock exchange plays an equally
important role in mobilizing long-term funds by providing the necessary liquidity to
holdings in shares and debentures. It provides a place where these securities can be
encased without any difficulty and delay. It is an organized market where shares and
debentures are traded regularly with high degree of transparency and security. The major
players in the secondary market are the stockbrokers who are members of the stock
exchange who facilitate the trading.

14
STOCK EXCHANGES IN INDIA
The first organized stock exchange in India was started in Mumbai known as Bombay
Stock Exchange (BSE). It was followed by Ahmadabad Stock Exchange in 1894 and
Kolkata Stock Exchange in 1908. The number of stock exchange in India went upto 7 by
1939 and it increased to 21 by 1945 on account of heavy speculation activity during
Second World War. A number of unorganized stock exchanges also functioned in the
country without any formal set-up and were known as kerb market. The Security
Contracts (Regulation) Act was passed in 1956 for recognition of Stock Exchanges in
India. At present we have 23 stock exchanges in the country. Of these, the most
prominent stock exchange that came up is National Stock Exchange (NSE). It is also
based in Mumbai and was promoted by the leading financial institutions in India. It was
incorporated in 1992 and commenced operations in 1994. The stock exchange has a
corporate structure, fully automated screen-based trading and nation-wide coverage.
Another stock exchange that needs special mention is Over The Counter Exchange of
India (OTCEI). It was also promoted by the financial institution like UTI, ICICI, IDBI,
IFCI, LIC etc. in September 1992 specially to cater to small and medium sized companies
with equity capital more than Rs.30 lakh and than Rs.25 crore. It helps entrepreneurs in
raising finances for their new projects in a cost effective manner. It provides for
nationwide online ringless trading with 20 plus representative offices in all major cities of
the country. On this stock exchange, securities of those companies can be traded which
are exclusively listed on OTCEI only. It has been noticed that, of late, the turnover at this
stock exchange has considerably reduced and steps have been afoot to revitalize it. In
fact, as of now, BSE and NSE are the two Stock Exchanges, which enjoy nation-wide
coverage and handle most of the business in securities in the country.

15
Equity Analysis:
Equity Analysis is the process of analyzing sectors and companies, to give advice to
professional fund managers and private clients on which shares to buy. Sell-side analysts
work for brokers who sell shares to the investors (mainly fund management firms and
private clients).

17
Objective of the Study:
1) To analysis individual company scrip’s by considering the factors relating to the
company, industry and the respective company.
2) To predict investor position (Buy, sell & hold).
3) To predict the future price trend of the stock.
4) To know the future trend of Stock Prices of Tata Motors and Ashok Leyland Ltd.
in capital market.
Descriptive Study: The present study is descriptive study. Stock market has been the
focus of study for many of the researches and this research based on the secondary data
would try and find out the trends prevailing in the automobile industries. The companies
taken into consideration for the research are:
➢ Tata Motors India Limited
➢ Ashok Leyland Limited
The data analysis has been done using the top down approach and following are the
subheadings used for the data analysis:
Economic analysis: Following annual indicators have been used for year 2015 to 2017.
➢ GDP Analysis
➢ Inflation rate Analysis
➢ Tax rate
➢ Interest rate
Industry analysis: Following indicators have been used:
➢ FDI Inflow in automobile sector and sub sector
➢ Annual Automobile Sales
➢ Annual growth rate
Company analysis: Research using the calculation of financial ratio and/or complex
forecasting of profits, cash flows and dividends. Analysis gives a basis for the valuation
of share and decision on when to buy, sell, and hold shares. The main tools for company
analysis are the ratio analysis.

18
Technical analysis: A method of evaluating securities securities by analysis statistics
generated by market activity, such as past price and volume. Technical analysts do not
attempt to measure a security’s intrinsic value, but instead use charts and other tools to
identify patterns that can suggest future activity. Technical analysis believe that the
historical performance of stocks and markets are indications of future performance.
Data Collection: The Secondary data is collected from the annual report of the company,
relevant text book on the subject matter and company’s official website. The analysis is
based on Secondary data collected from various organizational databases, websities,
newspapers and other necessary official records, books & magazines.
Scope of the Research: The research will help in knowing about the trends in the values
of the stock prices of the two major vehicle producers of India. It will thus be giving
knowledge to the readers of the research about the direction of these companies’ shares.
The research will also be giving information and inferences as to how the balance sheets
of these companies look like and how these companies are different from each other. This
will be helpful to those who are going to risk their money at the hands of these
automobile producers. The trends of the companies will also be compared to the industry
as a whole and try to draw anything that would help in understanding this industry better.
Limitation of the Study:
➢ The study on past performance of stocks, and the data, since secondary suffers
from the limitations of secondary data.
➢ The measurements have been influenced by extreme by values and may not show
the useful results to draw any inferences.
➢ Market forces are influenced by number of factors which cannot be quantified and
thus the research is limited to the numbers available.
➢ I have only taken two companies for equity analysis due limited time period.

20
Birla Sun Life Insurance Limited:
Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between the Indian
conglomerate Aditya Birla Group, and Sun Life Financial Inc., an international financial
services organisations from Canada. BSLI has a customer base of over two and half
million policy holders and has attained recognition as the 3rd Most Trusted Life
Insurance Company in the 'Most Trusted Brands' survey 2013 conducted by Brand Equity
(The Economic Times Group) with Neilsen. The Company offers a range of insurance
services comprising protection solutions, children's future solutions, savings with
protection solutions, wealth with protection solutions, health and wellness solutions, and
retirement solutions. It has a distribution reach in over 500 cities through its network of
over 550 branches, more than 1,05,000 empanelled advisors and over 100 partnerships
with corporate agents, brokers and banks.
Aditya Birla Financial Service Group:
Aditya Birla Financial Services Group (ABFSG) is the umbrella brand for all the
financial services business of The Aditya Birla Group. ABFSG ranks among the top 5
fund managers in India (including LIC) with an AUM of US$23 billion. Having a strong
presence across the life insurance, asset management, lending (excluding Housing),
housing finance, equity & commodity broking, wealth management and distribution,
online money management portal—Aditya Birla Money MyUniverse, general insurance
advisory and private equity and health insurance businesses. ABFSG is committed to
serve the end-to-end financial services needs of its retail and corporate customers. In FY
2013–14, ABFSG reported consolidated revenue from these businesses at just under ₹70
billion (US$1.1 billion) and profits of about ₹7.5 billion (US$120 million). Anchored by
over 14,000 employees and trusted by over 6 million customers, ABFSG has a

21
nationwide reach through 1,500 points of presence and about 130,000 agents/channel
partners. The financial services arm of the group is currently headed by Ajay Srinivasan.
Sun Life Financial Incorporation:
Sun Life Financial Inc is a Canada based financial service company, primarily known as
Life Insurance Company. It is one of the largest and oldest life insurance company in the
world. Sun Life Financial founded by Mathew Hamilton in the year 1865 headquartered
at Sun Life Centre Toronto, Ontario, Canada. It provides products like financial services,
financial planning and advice, life insurance, health insurance, dental insurance,
investment, pension plan, retirement plan and asset management service. The company
operates in India as Birla Sun Life Asset Management Company since 1994.
Vision:
To be a leader and role model in a broad based and integrated financial services business.
Value:
➢ Integrity
➢ Commitment
➢ Passion
➢ Seamlessness
➢ Speed
Area of Operation:
➢ Insurance and Insurance advisory
➢ Equity and Commodity broking
➢ Mutual Fund
➢ Wealth and Asset Management
➢ Portfolio Management Services
➢ Capital Advisory Services

22
Future Growth:
BSLI is the first Indian Insurance Company to introduce "Free Look Period", by which
consumer can return the policy to an insurance company within this period after receiving
the policy. “Free Look Period” was later made mandatory by Insurance Regulatory and
Development Authority of India for all other life insurance companies In 2013.
Additionally, BSLI pioneered the launch of Unit Linked Plan.BSLI has a policy of
disclosing their portfolio on a monthly basis. On 5 February 2015, Birla Sun Life
Insurance signed an IT outsourcing deal with International Business Machines
Corporation (IBM) with a view to leveraging mobility and cloud solutions developed by
IBM Research and the IBM India Software Lab.
Financial Highlights:
2147227
988837
0
500000
1000000
1500000
2000000
2500000
2017 2016
REVENUE(1000')
1228193
1399994
1100000
1150000
1200000
1250000
1300000
1350000
1400000
1450000
2017 2016
PROFIT AFTER TAX(1000')

23
Awards and Recognition:
➢ Best Employer Brand Award by Asian Confederation of Businesses in 2012.
➢ Successful Performance' for 4 years April 2005 by The Indo-Canadian
Business Chamber in 2005.
➢ Best Life Insurer (Runner Up) 2004 TROPHY by Outlook Money Awards
2004.
➢ Gold Trophy' for Financial Reporting by The Institute of Chartered
Accountants of India (ICAI) in 2012
➢ Media Abby Awards at Goa Fest Advertising Agencies Association of India &
Advertising Club Bombay (2011)
➢ Grand Midas at the Midas Awards 2013 in Public Service Category for work
titles as 'Death Track'
➢ Gold Midas Awards 2013 in Direct Mail/Collateral competition for work titled
as 'Karva Chauth'
Key People at Birla Sun Life Insurance:
➢ Mr. Kumar Mangalam Birla, Chairman
➢ Mr.PankajRazdan, MD and Chief Executive Officer
➢ Mr.Amit Jain, Chief Financial Officer
➢ Mr.DevanSangoi, Chief Investment Officer- Equity
➢ Mr.DevendraSinghvi, Chief Investment Officer- Debt
➢ Mr. Rajesh Nambiar, Chief Marketing Officer
➢ Mr.ShailendraKothavale, Chief Compliance & Risk Officer
➢ Mr. Anil Singh, Chief Actuarial Officer
➢ Mr.Vikas Seth, Chief Distribution Officer
➢ Mr.Parag Raja, Deputy Chief Distribution Officer
➢ Ms.ShobhaRatna, Head- Human Resource &Trainning
➢ Mr. Rajesh Varrier, Chief Technology and Digital Officer

24
Product Profile:
Products Plans
Protection Solutions
1. BSLI Protector Solution Plan
2. BSLI Future Gard Plan
3. BSLI Protect@EASE
Health and Wellness Solutions
1. BSLI Hospital Plus Plan
2. BSLI Cancer Shield Plan
3. BSLI CritiShield Plan
Children’s Future Solutions 1. BSLI Vision Star Plan
Retirement Solutions
1. BSLI Empower Pension Plan
2. BSLI Immediate Annuity Plan
3. BSLI Empower Pension – SP Plan
Wealth with Protection Solutions
1. BSLI Wealth Max Plan
2. BSLI Wealth Secure Plan
3. BSLI Wealth Assure Plan
4. BSLI Fortune Elite Plan
5. BSLI Wealth Aspire Plan
Saving with Protection Solutions
1. BSLI Vision Money Back Plus
2. BSLI Vision Life Income Plan
3. BSLI Vision Endowment Plan
4. BSLI Savings Plan
5. BSLI Vision Life Secure Plan
6. BSLI Income Assured Plan

25
Competitors Profile:
These are the top Competitors of Birla Sun Life Insurance:
➢ Life Insurance Corporation of India:
Life Insurance Corporation of India (LIC) is an Indian state-owned insurance group
and investment company headquartered in Mumbai. As of 2013 it had total life fund
of Rs.1433103.14 crore with total value of policies sold of 367.82 lakh that year. The
Life Insurance Corporation of India was founded in 1956 when the Parliament of
India passed the Life Insurance of India Act that nationalised the private insurance
industry in India. Over 245 insurance companies and provident societies were merged
to create the state owned Life Insurance Corporation.
➢ SBI Life Insurance:
SBI Life Insurance is a joint venture life insurance company between State Bank of
India, thelargest state-owned banking and financial services company in India, and
BNP Paribas Cardiff. BNP Paribas is a French multinational bank and financial
services company with global headquarters in Paris. SBI owns 70.1% of the total
capital and BNP Paribas Cardiff 26% of the capital. Other investors are Value Line
Pte. Ltd. and MacRitchie Investments Pte. Ltd., holding 1.95% of the total capital
each.

26
➢ Bajaj Allianz Life Insurance:
Bajaj Allianz Life Insurance is a joint venture between Bajaj Finserv Limited owned
by the Bajaj Group of India and Allianz, a European financial service company. Being
one of the private insurance companies in India. Bajaj Allianz Life Insurance began
operations on 12 March 2001 and today has 759 branches in India. It is headquartered
in Pune, India. Bajaj Allianz Life Insurance received the Insurance Regulatory and
Development Authority (IRDA) certificate of Registration on 3 August 2001 to
conduct Life Insurance business in India. It offers insurance products for financial
planning and security.
➢ ING Vysya Life Insurance India:
In 2000, ING Insurance, a sub-holding company of Dutch financial major ING Group,
tied up with Bangalore based Vysysa Bank to enter the Indian life insurance market
thus forming the ING Vysya Life Insurance Company. In the same year, ING Vysya
Bank, ING Insurance, and the Damani Group formed a life insurance joint venture,
this innovative collaboration marks the first bancassurance venture in India.

27
SWOT Analysis of Birla Sun Life Insurance:
STRENGTHS
1. Has Network of 600 branches and advisors spread over
1500 towns in India having over 130,000 advisors.
2. Backed by Aditya Birla Brand and Sun Life financial
services.
3. Emphasis on Customer Satisfaction through Transparent
Functioning.
4. Strong Capital Base.
WEAKNESSES
1. Low Presence in Rural Market.
2. Lesser advertising as compared to competitors.
OPPORTUNITIES
1. Growing potential in the Rural Market.
2. Alignment with Government Schemes.
3. Better awareness amongst people for getting insurance.
THREATS
1. Economic crisis and economic instability.
2. Entry of new NBFCs in the sector.
Market Share:
70.40%
1.60%
5%
4.88%
4.68%
2.08%
2.08%
1.12%
8.06%
MARKET SHARE
LIC
BLSI
SBI
ICICI
HDFC
BAJAJ ALLIANZ
MAX LIFE
RELIANCE LIFE
OTHERS

28
Customer Profile:
As Birla Sun Life Insurance is an insurance firm and provides service to its cliets such as
the investors who are interested to invest in insurance products.
Classification of Customers for Birla Sun Life Insurance:
Age Group 25years to 60 years
Occupation Salaried Persons, Professionals, Businessmen
Income level Minimum income level of INR 15,000 to 20,000 per month
Behaviour of Customers towards Insurance products are negative because they are
basically unaware and not interested.

30
Review of Literature
Several studies have been carried out to apply Technical Analysis in practice in various
financial markets. A few of them are quoted below: Kavajecz and Odders-White (2004)
show that support and resistance levels coincide with peaks in depth on the limit order
book 1 and moving average forecasts reveal information about the relative position of
depth on the book. They also show that these relationships stem from technical rules
locating depth already in place on the limit order book. Practitioners’ reliance on
technical analysis is well documented. Frankel and Froot (1990) noted that market
professionals tend to include technical analysis in forecasting the market.
The guiding principle of technical analysis is to identify and go along with the trend.
When there is a trend, whether started by random or fundamental factors, technical
methods will tend to generate signals in the same direction. This reinforces the original
trend, especially when many investors rely on the technical indicators. Thus, even if the
original trend were a random occurrence, the subsequent prediction made by the technical
indicator could be self-fulfilling. This self-fulfilling nature leads to the formation of
speculative bubbles (see, for example, Froot et al., 1992).
Conrad and Kaul (1988) found that weekly returns were positively auto-correlated,
particularly for portfolios of small stocks. Lui and Mole (1998) report the results of a
questionnaire survey conducted in February 1995 on the use by foreign exchange dealers
in Hong Kong of fundamental and technical analyses. They found that over 85% of
respondents rely on both methods and, again, technical analysis was more popular at
shorter time horizons.
Stephen Sault (2006) had conducted a study on fundamental and technical analysis
literatures invest considerable effort in assessing their respective ability to explain share
prices, they invariably do so without reference to each other. In this context, we propose
an equity valuation model integrating both fundamental and technical analysis and, in
doing so, recognize their potential as complements rather than as substitutes. Testing
confirms the complementary nature of fundamental and technical analysis by showing
that, while each performs well in isolation, models integrating both have superior
explanatory power. While our findings relate to the valuation of shares, they also have
implications for other valuation exercises.

31
Cheol-Ho Park And Scott H. Irwin (2004): The purpose of this report is to review the
evidence on the profitability of technical analysis. To achieve this purpose, the report
comprehensively reviews survey, theoretical and empirical studies regarding technical
trading strategies. We begin by over viewing survey studies that have directly
investigated market participants’ experience and views on technical analysis.
Foreign exchange markets, and that about 30% to 40% of practitioners appear to believe
that technical analysis is an important factor in determining price movement at shorter
time horizons up to 6 months.
Philippe Gergooire (2001) conducted a study on “Predictive Power of Technical
Analysis: The moving average rules on European” According to him simple forms of
technical analysis possessed significant forecast power on various market indexes. He
shows that these results can be replicated on formally selected European indexes, which
almost completely eliminates any influences from data –snooping. Implications of these
results in terms of market efficiency are also discussed.
Dg Praveen And Nihar Ranajn Panda (2002) had conducted a study on “Beat the market
with hammer “, Japanese candlestick analysis is one of most popular and oldest forms of
technical analysis. Candlestick charting studies the records of the market movements in
the past to identify the future patterns. It identifies exuberant buying and panic selling,
enabling the trader to pocket a great deal of profits from the stock market. Compared to
traditional bar charts, many traders consider candlestick charts more visually appearing
and easier to interpret. Each candlestick provides an easy to decipher picture of price
action. Immediately a trader can see and compare the relationship between the open and
close as well as the high and low.
This paper aims at carrying out Technical Analysis of the securities of the selected
companies in Indian stock market.

33
Fundamental analysis:
Fundamental analysis is the method of evaluating securities by attempting to
measure the intrinsic value of a particular stock. It is the study of everything from the
overall economy and industry conditions, to the financial condition and management of
specific companies that is using real data to evaluate a stock’s value. The method utilizes
items such as revenues, earnings, return on equity and profit margins to determine a
company’s underlying value and potential for future growth.
Fundamental analysis is really a logical and systematic approach to estimating the
future dividends and share price. It is based on the basic premise that share price is
determined by a number of fundamental factors relating to the economy, industry and
company. Hence, the economy fundamentals, industry fundamentals, and company
fundamentals have to be considered while analyzing a security for investment purpose.
Fundamental analysis is, in other words, a detailed analysis of the fundamental factors
affecting the performance of companies.
Each share is assumed to have an economic worth based on its present and future
earning capacity. This is called its intrinsic value or fundamental value. The purpose of
fundamental analysis is to evaluate the present and future earning capacity of share based
on the economy, industry and company fundamentals and thereby assess the intrinsic
value of the share. The investor can then compare the intrinsic value of the share with the
prevailing market price to arrive at an investment decision. If market price of share is
lower than its intrinsic value, the investor would decide to buy the share as it is
underpriced. The price of such a share is expected to move up in future to match with its
intrinsic value. On the other hand, if the market price of a share is higher than its intrinsic
value, it is perceived to be overpriced. The market price of such a share is expected to
come down in future and hence, the investor would decide to sell such share.
Fundamental analysis thus provides an analytical framework for rational investor
decision making. This analytical framework is known as EIC framework, or economy-
industry-company analysis.

34
Economy Analysis:
The performance of a company depends on the performance of the economy. If the
economy is booming, incomes rise, demand for goods increases, and hence the industries
and companies in general tend to be prosperous. On other hand, if the economy is in
recession, the performance of company will be generally bad. These includes the factors
like growth rate of the economy, the rate of inflation, foreign exchange rate etc which
affects profitability of all companies.
The following are the some of the important economic factors which influence the
investment of investor over a period of time.
➢ Indian Economy Overview:
The economy of India is the sixth-largest in the world measured by nominal GDP and
the third-largest by purchasing power parity (PPP). The country is classified as a newly
industrialized country, and one of the G-20 major economies, with an average growth rate
of approximately 7% over the last two decades. Maharashtra is the wealthiest Indian
state with an annual nominal GDP of US$330 billion, roughly equivalent to those
of Venezuela and the United Arab Emirates, and accounts for 13.4% of India's GDP.
India has emerged as the fastest growing major economy in the world as per the Central
Statistics Organization (CSO) and International Monetary Fund (IMF). The Government
of India has forecasted that the Indian economy will grow by 7.1 per cent in FY 2016-17.
As per the Economic Survey 2016-17, the Indian economy should grow between 6.75 and
7.5 per cent in FY 2017-18. The improvement in India’s economic fundamentals has
accelerated in the year 2015 with the combined impact of strong government reforms,
Reserve Bank of India's (RBI) inflation focus supported by benign global commodity
prices. India's two largest stock exchanges, Bombay Stock Exchange and National Stock
Exchange of India, had a market capitalization of US$1.83 trillion and US$1.68 trillion as
on 2017, which rank 11th and 12th in the world according to the World Federation of
Exchanges.

35
➢ Gross Domestic Product:
The gross domestic product (GDP) is one of the primary indicators used to gauge the
health of a country's economy. India has one of the fastest growing service sectors in the
world which contributed to 45.4% of GDP in 2016. The Indian economy advanced 6.1
percent year-on-year in the first quarter of 2017, slowing sharply from a 7 percent
expansion in the previous period and well below market expectations of 7.1 percent. It is
the lowest growth rate since the last quarter of 2014, due to a slowdown in consumer
spending and a drop in investment, following the demonetization program started in
November of 2016 that removed 86 percent of India's currency in circulation. The Indian
automobile industry is one of the largest in the world with an annual production of 25.20
million vehicles (mostly two and three wheelers) in 2015-2016. In addition, the
government changed the GDP base year for 2011-2012 from 2004-2005. The same
change was made earlier for industrial production and wholesale prices indexes, with
adjustments in the weights of the different industries. Considering the April 2016-March
2017 period, the economy advanced 7.1 percent, in line with the official estimate but
below 8 percent in the previous year. The agricultural sector contributes 16.5% GDP
where as industry sector contributes 29.08% towards GDP as on 2016. The current GDP
is US$ 2.45 trillion as on 2017.
➢ Inflation Rate:
Inflation is a sustained increase in the general price level of goods and services in
an economy over a period of time. When the price level rises, each unit of currency buys
fewer goods and services; consequently, inflation reflects a reduction in the purchasing
power per unit of money – a loss of real value in the medium of exchange and unit of
account within the economy. The average consumer price index inflation declined from
5.9% in 2014-15 to 4.9% in 2015-16. In current financial year till December, CPI
inflation averaged 4.8% and eased to 3.4% in December in 2016 backed by sharp fall in
food prices. Food inflation based on consumer food price index (CFPI) declined to 4.9%
in 2015-16 from 6.4% in 2014-15. It averaged 5.1% in current financial year till
December and dropped to 1.4% in December 2016 following sharp correction in pulses
and vegetables prices.

36
➢ Interest Rate:
Interest rate affects the cost of financing and decrease in interest implies lower cost of
finance for firm and more profitability. Availability of cheap fund encourages speculation
and rise in the price of shares. High rate of interest discourages investment and stock
market is negatively affected. The current interest rate is 11% to 20% as on April, 2017.
STATUTORY LIQUIDITY RATIO (SLR) 20.5%
CASH RESERVE RATIO (CRR) 4%
MARGINAL STANDING FACILITY (MSF) 6.5%
REPO RATE 6.25%
RESERVE REPO RATE 6%
BASE RATE 9.1% TO 9.6%
➢ Exchange Rate:
In 2016-17, the rupee has performed better than most other emerging market economies.
During 2016-17 (April-December), on year on year basis, the rupee depreciated by 3.4%
against US dollar as compared to the depreciation of Mexico Peso (14.4%), South African
Rand (8.6%) and Chinese Renminbi (6.3%). The rupee depreciated in terms of nominal
effective exchange rate against a basket of 6 and 36 currencies during April-December
2016. However, the 6-currency and 36-currency real effective exchange rate appreciated
by 6.1% and 5.6% respectively as at end December 2016 over end of March 2016.
Present exchange rate of 1 INR to USD is 0.015.
➢ Tax Structure:
After implementation of Good and Service Tax (GST), the GST council has decided that
businesses in the North Eastern and hill states with annual turnover below INR 10 lakh
would be out of the GST, while the threshold for the exemption in the rest of India would
be an annual turnover of INR 20 lakh. For Indian company the current tax rate is 25%

37
whose turnover is less than equal to INR 50 crore and more than INR 50 crore is 30%.
The surcharges will be 7% if the entity’s taxable income more than INR 1 crore and less
than INR 10 crore, It is 12% if the entity’s taxable income is more than INR 10 crore.
Surcharges are exempted for entity’s whose taxable income is less than INR 1 crore. For
the Foreign company tax rate is 40% whose turnover is less than equal to INR 50 crore
and also 40% for turnover more than INR 50 crore. The surcharges will be 2% if the
foreign entity’s taxable income is more INR 1 crore and less than INR 10 crore. For more
than INR 10 crore it is 5%. As compare to assessment year 2016-17 tax rate was
decreased in the assessment year. 2017-18.
➢ Agriculture and Monsoon:
As per the First Advance Estimates, growth rate for the agriculture and allied
sectors is estimated to be 4.1% for 2016-17. The total kharif food-grains during 2016-17
is estimated at 135.0 million tonnes compared to 124.1 million tonnes in 2015-16. The
rice production is increased to 93.9 million tonnes from 90.6 in 2016-17 as compared to
2015-16. Total Coarse Cerreals production also increased to 32.5 million tonnes from
27.9 million tonnes in 2016-17 as compared to 2015-16. Oilseeds production increased to
23.4 million tonnes in 2016-17 as compared to 19.9 million tonnes in 2015-16. Sugarcane
production in India decreased to 305.2 million tonnes in 2016-17 which was 305.2
million tonnes in 2015-16. Cotton production also decreased to 32.1 million tonnes in
2016-17 as compare to 2015-16.
Coming to monsoon, during the south west monsoon season of 2016 the country as a
whole received rainfall which was 97% of its long period average. Out of the total 36
meteorological subdivisions, 4 subdivisions received excess rainfall, 23 subdivisions
received normal rainfall and remaining 9 subdivisions received deficient rainfall.
Region LPA(mm) Actual Rainfall(mm) Rainfall (% of LPA)
All India 887.5 862.0 97
Northwest India 615.1 584.2 95
Central India 975.3 1034.1 106
Northeast India 1437.8 1281.5 89
South Peninsula 715.6 661.5 92

38
INDUSTARY ANALYSIS:
Automobile Industry In India:
The Indian auto industry is one of the largest in the world. The industry accounts for 7.1
per cent of the country’s Gross Domestic Product (GDP). The two wheelers segment with
81 per cent market share is the leader of the Indian Automobile market owing to a
growing middle class and a young population. India is also a prominent auto exporter and
has strong export growth expectations for the near future. In April-March 2016, overall
automobile exports grew by 1.91 per cent. PV, Commercial Vehicles (CV), and Two
Wheelers (2W) registered a growth of 5.24 per cent, 16.97 per cent, and 0.97 per cent
respectively in April-March 2016 over April-March 2015.* In addition, several initiatives
by the Government of India and the major automobile players in the Indian market are
expected to make India a leader in the 2W and Four Wheeler (4W) market in the world by
2020.
Domestic Market Share of Automobile Sector for 2015-16:
14%
3%
3%
80%
Market Share
Passenger Vehicles
Commercial Vehicle
Three Wheelers
Two Wheelers

39
Automobile Production In India:
Category 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Passenger
Vehicle 31,46,069 32,31,058 30,87,973 32,21,419 34,65,045 37,91,540
Commerci
al
Vehicle
9,29,136 8,32,649 6,99,035 6,98,298 7,86,692 8,10,286
Three
Wheeler 8,79,289 8,39,748 8,30,108 9,49,019 9,34,104 7,83,149
Two
Wheeler 1,54,27,53
2
1,57,44,15
6
1,68,83,04
9
1,84,89,31
1
1,88,30,22
7
1,99,29,48
5
Total 2,03,82,02
6
2,06,47,61
1
2,15,00,16
5
2,33,58,04
7
2,40,16,06
8
2,53,14,46
0
Comparative Domestic Sales Analysis:
Category 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Passenger
Vehicle 26,29,839 26,65,015 25,03,509 26,01,236 27,89,208 30,46,727
Commerci
al
Vehicle
8,09,499 7,93,211 6,32,851 6,14,948 6,85,704 7,14,232
Three
Wheeler 5,13,281 5,38,290 4,80,085 5,32,626 5,38,208 5,11,658
Two
Wheeler 1,34,09,15
0
1,37,97,18
5
1,48,06,77
8
1,59,75,56
1
1,64,55,85
1
1,75,89,51
1
Total 1,73,61,76
9
1,77,93,70
1
1,84,23,22
3
1,97,24,37
1
2,04,68,97
1
2,18,62,12
8

40
Automobile Export Trend:
Category 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Passenger
Vehicle 5,08,783 5,59,414 5,96,142 6,21,341 6,53,053 7,58,830
Commercial
Vehicle 92,258 80,027 77,050 86,939 1,03,124 1,08,271
Three
Wheeler 3,61,753 3,03,088 3,53,392 4,07,600 4,04,441 2,71,894
Two
Wheeler 19,75,111 19,56,378 20,84,000 24,57,466 24,82,876 23,39,273
Total 29,37,905 28,98,907 31,10,584 35,73,346 36,43,494 34,78,268
Automobile Industry Life Cycle Analysis:
India’s automobile market has grown steadily over the last seven to eight years, with the
exception of the previous two years where the effects of the global downturn were felt,
primarily in sales of commercial vehicles. However, even during the downturn, the two-
wheeler and three-wheeler segments, which were until then experiencing high growth or
gaining volumes.

41
SWOT Analysis of Automobile Industry Analysis:
STRENGTH 1. Cost competitiveness in terms of labour and Raw
material.
2. Established manufacturing base.
3. Qualified and skilled man power.
4. Growing domestic automotive industry.
5. Manufacturing capabilities with international quality
standards.
WEAKNESS 1. Low investment in Research and Development.
2. Limited knowledge of product liability and offshore
warranty handling.
3. Comparatively poor infrastructure for supply chain
and exports.
4. Lack of experience in system integration.
OPPURTUNITIES 1. The growing need to outsource.
2. Huge opportunity in the tier-1 and tier-0.5.
3. Higher frequency of introducing of newer models by
automakers.
4. Global market opportunity itself is the ultimate
opportunity provided by auto industry.
5. Acquisition in foreign markets.
THREATS 1. Competition from other low cost countries like
China, Taiwan, Thailand etc.
2. Free trade Agreements/Preferential Trade
Agreements.
3. Expansion of the European Union-inclusion of
Hungary, Czech Republic Poland etc which are
major exporting countries to Western Europe.
4. Developments of new technologies like fuel cell,
hydrogen powered vehicles, which may affect the
auto component industry.

42
Porter’s Five Forces Model For Automobile Industry Analysis:
Threat of new entrants High capital costs, technology, distribution
network, and availability of auto
components
Threat of substitutes High cost is required to switching over to
substitute and there are limited number of
substitute for customers.
Bargaining power of customers Very high, due to availability of options
Bargaining power of suppliers Low, due to stiff competitions
Competitors rivalry High, Expected to availability of options
Company Analysis:
A company analysis incorporates basic info about the company, like the mission
statement and apparition and the goals and values. During the process of company
analysis, an investor also considers the company’s history, focusing on events which have
contributed in shaping the company.
In Company Analysis the following Accounts are taken into consideration.
1. Profit and Loss Accounts.
2. Balance Sheet.
3. Ratio Analysis.

43
Technical Analysis:
Technical analysis is an analysis methodology for forecasting the direction
of prices through the study of past market data, primarily price and volume. Technical
analysis attempts to use past stock price and volume information to predict future price
movements. Fundamentally, technical analysis shows in graphic form investor sentiment,
both greed and fear.
Principle of Technical Analysis:
➢ The market discount everything:
Whatever happens to a security is considered by the market. Even though Technical
Analysis mostly ignores fundamentals, the market will still price those in and thus reflect
everything that has or could influence the security.
➢ The price moves in trends:
Price movement is considered to always follow a certain trend. The old saying “the trend
is your friend” means it is easier to trade with the trend. Most strategies and tools actually
focus on trends, whether short term or long term. Price can be in
an uptrend, downtrend or sideways trend, which is also called ranging.
➢ History trends to repeat itself:
Like history, price movements tend to repeat themselves. Technical Analysis uses
historical data to determine future movement. Market participants tend to react in a
similar way to certain events or appearances, so they can usually be expected to react in
the same way again when a similar situation occurs in the future.

44
Type of Charts:
As the name indicates technical analysis, the analysis is done by studying different charts.
➢ Line Chart:
The line chart is the most basic chart type and it uses only one data point to form the
chart. When it comes to technical analysis, a line chart is formed by plotting the closing
prices of a stock or an index.
➢ Bar Chart:
Bar Charts, one of the basic tools of technical analysis is the bar chart, where the open,
close, high, and low prices of stocks or other financial instruments are embedded
in bars which are plotted as a series of prices over a specific time period. A bar chart
displays all the four price variables namely open, high, low, an

45
➢ Candle Stick Chart:
Candlestick patterns are a form of technical analysis and charting used in the stock
market, forex market and all other markets. And they can be used in all time frames, from
those looking for long term investments to those who use swing trading or day trading.

46
DATA ANALYSIS
&
INTERPRETATION

47
TATA MOTERS:
Tata Motors Limited (formerly TELCO, short for Tata Engineering and Locomotive
Company) is an Indian multinational automotive manufacturing company headquartered
in Mumbai, India, and a member of the Tata Group. Its products include passenger cars,
trucks, vans, coaches, buses, sports cars, construction equipment and military vehicles.
Tata Motors has auto manufacturing and assembly plants
in Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad, and Pune in India, as well as in
Argentina, South Africa, Great Britain and Thailand. It has research and development
centers in Pune, Jamshedpur, Lucknow, and Dharwad, India and in South Korea, Great
Britain and Spain. In 2010, Tata Motors acquired an 80% stake in the Italian design and
engineering company Trilix for €1.85 million. In 2012, Tata Motors announced it would
invest around ₹6 billion in the development of Futuristic Infantry Combat Vehicles in
collaboration with DRDO. Tata Motors entered the passenger vehicle market in 1991
with the launch of the Tata Sierra, becoming the first Indian manufacturer to achieve the
capability of developing a competitive indigenous automobile.
ASHOK LEYLAND:
Ashok Leyland is an India automobile manufacturing company headquartered in Chennai,
India. It is owned by the Hinduja Group. Founded in 1948, it is the 2nd largest
commercial vehicle manufacturer in India, 4th largest manufacturer of buses in the world
and 12th largest manufacturer of trucks globally. Operating nine plants, Ashok Leyland
also makes spare parts and engines for industrial and marine applications. It sold around
1,40,000 vehicles (M&HCV + LCV) in FY 2016. It is the second largest commercial
vehicle company in India in the medium and heavy commercial vehicle (M&HCV)
segment, with a market share of 32.1% (FY 2016). With passenger transportation options
ranging from 10 seaters to 74 seaters (M&HCV = LCV), Ashok Leyland is a market
leader in the bus segment. The company claims to carry more than 70 million passengers
a day, more people than the entire Indian rail network. In the trucks segment Ashok
Leyland primarily concentrates on the 16 to 25-ton range. However, Ashok Leyland has a
presence in the entire truck range, from 7.5 to 49 tons. In 2016, Ashok Leyland initiated
the ‘Road to School’ program for 4,108 students at 36 government schools in remote
locations of India. The objective of this program was to reduce absenteeism and drop-outs
from these schools due to lack of infrastructure and adequate teaching support.

48
TATA MOTORS:
Income Statement of Tata Motors:
➢ As per the Profit & Loss A/c of Tata Motors Ltd, the net profit was increased in
2016 from INR (-4738.95cr) to INR 234.23cr.
➢ Net sale of company in 2016 increased by INR 6075.80cr.
➢ Equity Dividend increased by INR 61.00cr in 2016 as compare to 2015.

49
Position statement of Tata Motors:
➢ Total debt of the company in 2016 decreased by INR 6041.29cr.
➢ Gross Block increased by INR 1231.04cr in 2016 as compare to 2015.
➢ Company has negative working capital.
➢ Company has kept surplus reserve in 2016.

50
ASHOK LEYLAND:
Income Statement of Ashok Leyland:
➢ Net profit of the company increased to INR 721.78cr in 2016 from 334.81cr in
2015.
➢ Net sale of company in 2016 increased by INR 5259.40cr in 2016 as compare to
2015.
➢ Equity Dividend increased by INR 142.30cr in 2016 as compare to 2015.
➢ Earnings per Share increased by INR 1.36cr in 2016 as compare to 2015.

51
Position statement Of Ashok Leyland:
➢ The gross block increased by INR 120.33cr in 2016 as compare to 2015.
➢ Company has positive working capital.
➢ Loans and advances decreased by INR 90.82cr in 2016 as compare to 2015.
➢ Net worth of the company in 2016 increased to INR 4492.33cr from INR 4096.89
in 2015.

52
Comparative Ratio Analysis:
Current ratio: The current ratio is a liquidity ratio that measures a company’s ability to
pay short-term and long term obligations.
Formula: Current Assets/Current Liabilities
➢ Ashok Leyland Ltd has high liquidity position as compare to Tata Motors Ltd.
➢ Ashok Leyland Ltd has more ability to pay its short term and long term obligation
as compare to Tata Motors Ltd.
0.53
1.08
0
0.2
0.4
0.6
0.8
1
1.2
TATA MOTORS ASHOK LEYLAND
CURRENT RATIO

53
Quick ratio: The quick ratio is an indicator of a company’s short term liquidity. This
ratio measures a company’s ability to meet its short term obligation.
Formula: Liquid Assets/Current Liabilities
➢ In this case Ashok Leyland Ltd has more liquid assets to meet its current liabilities
as compare to Tata Motors Ltd.
➢ Tata Motors quick ratio is less than 0.5 which means it unable to meet its half of
current liabilities.
0.42
0.78
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
QUICK RATIO

54
Net profit ratio: Net profit ratio shows how much of each rupee collected by a company
as revenue translates into profit.
Formula: EAT/Sales
➢ According to net profit ratio the overall profitability of Tata Motors Ltd is good
than Ashok Leyland Ltd.
0.55
3.83
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
NET PROFIT RATIO

55
Return on Assets: This ratio indicates how profitable a company is relative to its total
assets. Return on Assets ratio shows how well management is employing the company’s
total assets to make a profit.
Formula: Net profit/Average total Assets
➢ The performance of Tata Motors Ltd is higher, in case of utilization of its assets to
make profit as compare to Ashok Leyland Ltd. This means TATA motors has
utilised the assets in a more productive way than Ashok Leyland.
65.8
15.79
0
10
20
30
40
50
60
70
RETURN ON ASSETS

56
Return on capital employed: Return on capital employed is a profitability ratio that
measures how efficiently a company can generate profits from its capital employed.
Formula: Net profit / Capital employed
➢ Tata Motors Ltd has not used each rupee of its capital effectively to generate its
profit.
➢ The utilization of capital is effective for Ashok Leyland as compare to Tata
Motors.
5.48
28.28
0
5
10
15
20
25
30
RETURN ON CAPITAL EMPLOYED

57
Return on Equity: The return on equity ratio is a profitability ratio that measures the
ability of a firm to generate profits from its shareholder’s investments in the company.
Formula: Net income/shareholder’s equity
➢ Tata Motors has used the shareholder’s fund effectively as compare to Ashok
Leyland to generate its profit.
➢ The investment in Tata Motors is good because the profit of the company to its
shareholder’s fund is good than Ashok Leyland.
1.04
16.06
0
2
4
6
8
10
12
14
16
18
RETURN ON EQUITY

58
Earnings Per Share: Earnings per share measures the amount of net income earned per
share of stock outstanding.
Formula: Net income-preferred dividend/No. of outstanding share in market
➢ Earnings per share of Ashok Leyland Ltd is highly effective than Tata Motors.
➢ Investor will earn more profit if they will invest in Ashok Leyland.
-0.18
1.37
-0.4
-0.2
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
EARNING PER SHARE

59
Dividend payout ratio: This is the amount of dividend paid to its shareholders relative to
the net income of the company.
Formula: Total dividend available for shareholders/Net income
➢ Ashok Leyland is paying high dividend to its shareholders as compare to Tata
Motors.
➢ Investor looking for regular income can invest in Ashok Leland Ltd.
2.26
23.19
0
5
10
15
20
25
DIVIDEND PAYOUT RATIO

60
Price Earnings Ratio: The price earnings ratio shows what the market is willing to pay
for a stock based on its current earnings.
Formula: Current Price of share/Earning per share.
➢ Investor will have to pay 23.88 times of EPS per share to get Tata Motors current
earning.
➢ Investor will have to pay 30.47 times of EPS to earn present return of Ashok
Leyland.
➢ It seems that Tata Motors share price is cheaper than Ashok Leland.
23.88
30.47
0
5
10
15
20
25
30
35
PRICE EARNING RATIO

61
Technical Analysis for 30 days:
Tata Motors Ltd:
Line Chart:
Bar Chart:
Candle Stick Chart:
➢ The price movement are going downward trend.
➢ It’s better to hold till the price go upward trend.

62
Ashok Leyland:
Line Chart:
Bar Chart:
Candle Stick Chart:
➢ Here the price trend is fluctuating more and no stable trend is there.
➢ It’s better to sell the stock.

64
Findings:
➢ According to Fundamental Analysis the fundamentals of Ashok Leyland is very
strong.
➢ As compare to Ashok Leyland the fundamentals of Tata Motors is not that much
of strong.
➢ Technical charts indicates that the future price moments of Ashok Leyland is
upward.
➢ According to Technical charts the price moments of Tata Motors Ltd is
downward.
Suggestion:
➢ It should be profitable to hold the share of Tata Motors Limited for long period of
time.
➢ The investor should sell the share of Ashok Leyland Limited.

66
Books:
➢ Security Analysis & Portfolio Management- S.Kevin, PHI Learning pvt ltd.
References:
➢ www.moneycontrol.com
➢ www.economictime.com
➢ www.nseindia.com
➢ www.tatamotors.com
➢ www.ashokleyland.com
➢ www.ijsr.net
➢ www.ijarcsms.com
➢ www.dea.gov.in

FUNDAMENTAL AND TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR.

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (20)

Semelhante a FUNDAMENTAL AND TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR.

Semelhante a FUNDAMENTAL AND TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR. (20)

Último

Último (20)

FUNDAMENTAL AND TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR.