A PROJECT REPORT
ON “A STUDY ON FUNDAMENTAL ANALYSIS OF IT SECTOR”
Submitted by, SOURABH MANDAL MBA – Semester 3rd (Session 2012-13)
Approved By MR. ASHUTOSH WAKHRE
Guided By Ms. NEELAM CHOUKSEY
DECLARATION BY THE CANDIDATE
I the undersigned solemnly declare that the report of the research work entitled ” “A STUDY ON FUNDAMENTAL ANALYSIS OF IT SECTOR” is based on my own work carried out during the course of my study under the supervision of Mr. ASHUTOSH WAKHRE. I assert that the statements made and conclusions drawn are an outcome of my research work. I further declare that to the best of my knowledge and belief the report does not contain any part of any work which has been submitted for the award of MBA degree or any other degree/diploma/certificate in this University or any other University of India or abroad.
_________________ (Signature of Candidate) Name: MANDAL
the
SOURABH
Enrollment No: AK 5598
CERTIFICATE FROM THE SUPERVISOR
This is to certify that the work incorporated in the report “A STUDY ON FUNDAMENTAL ANALYSIS OF IT SECTOR” is a record of research work carried out
by SOURABH MANDAL bearing Enrollment No.: AK 5598 under my guidance and supervision for the part fulfillment for the award of MBA Degree of Chhattisgarh Swami Vivekanand Technical University, Bhilai (C.G.), India.
To the best of my knowledge and belief the Report i) Embodies the work of the candidate him/herself, ii) Has duly been completed, iii) Is up to the desired standard both in respect of contents and language for external viva. ______ ___________
ACKNOWLEDGEMENT
Achieving a milestone for any person is extremely difficult. However, there are motivations which come across the curvaceous path like twinkling stars in the sky and make our task much easier. It becomes my humble and foremost duty to acknowledge all of them. Success of any task depends upon the sincerity and hardwork, associated with cent percent devotion and dedication towards that work. Words are scarce to express my deep gratitude to those who helped me with their effort in completion of this project. I express my sincere regards to all those who helped me indirectly and directly in completion of my project on “A STUDY ON FUNDAMENTAL ANALYSIS OF IT SECTOR”. I’d like to express heartfelt gratitude to
under whom I had undertaken this project.
TABLE OF CONTENTS
Chapter
Content
Page no.
Declaration
I
Certificate
II
Acknowledgement
III
Chapter-1
Introduction to the study
Chapter-2
Industry profile/ company profile
Chapter-3
Literature review
Chapter-4
Research methodology
chapter-5
Data tabulation, analysis and results
5.1
Test of analysis used and why
5.2
Result of the analysis
Chapter-6
Findings
Chapter-7
Recommendations
Chapter-8
Limitations
Chapter-9
Conclusion
Chapter-10
References
INTRODUCTION TO STUDY What is analysis? The examination and evaluation of the relevant information to select the best course of action from among various alternatives. The methods used to analyze securities and make investment decisions fall into two very broad categories: fundamental analysis and 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 doesn't care one bit about the "value" of a company or a commodity. Technicians (sometimes called chartists) are only interested in the price movement in the market.
What is technical analysis? Technical analysis is a method of evaluating securities by analyzing the statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity.
What is fundamental analysis? Fundamental Analysis involves examining the economic, financial and other qualitative and quantitative factors related to a security in order to determine its intrinsic value. It attempts to study everything that can affect the security's value, including macroeconomic factors (like the overall economy and industry conditions) and individually specific factors (like the financial condition and management of companies). Fundamental analysis, which is also known as quantitative analysis, involves delving into a companyâ€&#x;s financial statements (such as profit and loss account and balance sheet) in order to study various financial indicators (such as revenues, earnings, liabilities, expenses and assets). Such analysis is usually carried out by analysts, brokers and savvy investors. Many analysts and investors focus on a single number-net income (or earnings)--to evaluate performance. When investors attempt to forecast the market value of a firm, they frequently rely on earnings. Many institutional investors, analysts and regulators believe earnings are not as relevant as they once were. Due to nonrecurring events, disparities in measuring risk and management's ability to disguise fundamental earnings problems, other measures beyond net income can assist in predicting future firm earnings.
INDUSTRY PROFILE / COMPANY PROFILE Information Technology (IT) industry in India is one of the fastest growing industries. Indian IT industry has built up valuable brand equity for itself in the global markets. IT industry in India comprises of software industry and information technology enabled services (ITES), which also includes business process outsourcing (BPO) industry. India is considered as a pioneer in software development and a favourite destination for IT-enabled services. The origin of IT industry in India can be traced to 1974, when the mainframe manufacturer, Burroughs, asked its India sales agent, Tata Consultancy Services (TCS), to export programmers for installing system software for a U.S. client. The IT industry originated under unfavourable conditions. Local markets were absent and government policy toward private enterprise was hostile. The industry was begun by Bombay-based conglomerates which entered the business by supplying programmers to global IT firms located overseas. During that time Indian economy was state-controlled and the state remained hostile to the software industry through the 1970s. Import tariffs were high (135% on hardware and 100% on software) and software was not considered an "industry", so that exporters were ineligible for bank finance. Government policy towards IT sector changed when Rajiv Gandhi became Prime Minister in 1984. His New Computer Policy (NCP-1984) consisted of a package of reduced import tariffs on hardware and software (reduced to 60%), recognition of software exports as a "delicensed industry", i.e., henceforth eligible for bank finance and freed from license-permit raj, permission for foreign firms to set up wholly-owned, export-dedicated units and a project to set up a chain of software parks that would offer infrastructure at below-market costs. These policies laid the foundation for the development of a world-class IT industry in India. Today, Indian IT companies such as Tata Consultancy Services (TCS), Wipro, Infosys, HCL et al are renowned in the global market for their IT prowess. Some of the major factors which played a key role in India's emergence as key global IT player are: Indian Education System The Indian education system places strong emphasis on mathematics and science, resulting in a large number of science and engineering graduates. Mastery over quantitative concepts coupled with English proficiency has resulted in a skill set that has enabled India to reap the benefits of the current international demand for IT. High Quality Human Resource Indian programmers are known for their strong technical and analytical skills and their willingness to accommodate clients. India also has one of the largest pools of Englishspeaking professionals. Competitive Costs The cost of software development and other services in India is very competitive as compared to the West.
Infrastructure Scenario Indian IT industry has also gained immensely from the availability of a robust infrastructure (telecom, power and roads) in the country. In the last few years Indian IT industry has seen tremendous growth. Destinations such as Bangalore, Hyderabad and Gurgaon have evolved into global IT hubs. Several IT parks have come up at Bangalore, Hyderabad, Chennai, Pune, Gurgaon etc. These parks offer Silicon Valley type infrastructure. In the light of all the factors that have added to the strength of Indian IT industry, it seems that Indian success story is all set to continue.
Tata Consultancy Services Ltd BSE: 532540 | NSE: TCS | ISIN: INE467B01029 MarketCap: [Rs.Cr.] 348,890 | Face Value: [Rs.] 1 Industry: Computers - Software - Large
Company Profile
Tata Consultancy Services Ltd is an information technology (IT) company. The company offers a range of IT services, outsourcing and business solutions. They also offer IT infrastructure services, business process outsourcing services, engineering and industrial services, global consulting and asset leveraged solutions. Their segments include banking, financial services and insurance; manufacturing; retail and distribution, and telecom. The company is a part of Tata Group, one of India's most respected business conglomerates and most respected brands. They are headquartered in Mumbai. They are having 142 offices in 42 countries as well as 105 delivery centers in 20 countries. The company shares are listed on the National Stock Exchange and Bombay Stock Exchange of India. Tata Consultancy Services Ltd was incorporated in the year 1968. Tata Sons Ltd established the company as division to service their electronic data processing (EDP) requirements and provide management consulting services. In the year 1971, they started their first international assignment. The company pioneered the global delivery model for IT services with their first offshore client in 1974. In the year 1981, the company set up India's first IT R&D division, the Tata Research Design and Development Centre at Pune. In the year 1985, they set up their first client-dedicated offshore development center for Compaq (then Tandem). In the year 1989, they delivered an electronic depository and trading system called SECOM for SIS SegaInterSettle, Switzerland. In the year 1997, the company opened their new corporate training facility at Trivandrum. In the year 1998, they started virtualization of business. In the year 1999, they got SEI-CMM Level 5 certification for their Qwest, HP, SEEPZ & Sholinganallur centres. Also, in the year 20000, they got SEI-CMM Level 5 certification for their Calcutta, Bangalore, Lucknow, Hyderabad, GEDC, Ambattur and Ahmedabad centres. In the year 2001, the company completed the acquisition of public sector unit, CMC Ltd. In the year 2002, they expanded their geography into new growth markets like China/ Uruguay. The company saw outsourcing opportunity in E-Commerce and related solutions and set up its EBusiness division with ten people. By 2004, E-Business was contributing half a billion USD to the company. During the year 2004-05, the company acquired WTI Advanced Technology Ltd and TCS Business Transformation Solutions Ltd (Previously, Phoenix Global Solutions (India) Ltd), subsequently these two companies became the subsidiaries of the company. In August 9, 2004, the company became a publicly listed company. During the year 2005-06, the company acquired three companies Comicrom S A, Chile, Financial Network Services (Holdings) Pty Ltd, Australia (FNS) and Swedish Indian IT Resources AB (SITAR). The company made strategic alliances with Diligenta Ltd for Life Insurance business. Also, they entered into a Joint Venture Agreement with the State Bank of India. The new company was formulated and named C-Edge Technologies Ltd (C-Edge) for providing advanced technology solutions and world-class domain consulting for the banking and financial services sector. During the year, the company ventured into a new area for an Indian IT Services Company. In April 2005, Tata Infotech Ltd with their three wholly owned subsidiaries, namely Airline Financial Support Services (India) Ltd, Aviation Software Development Consultancy India Ltd and TCS Business Transformation Solutions Ltd were amalgamated with the company. During the year 2006-07, the company in partnership with the Government of Madhya Pradesh formed a company, namely MP Online Ltd, for offering a wide range of computer enabled services in the State of Madhya Pradesh. The company through their wholly owned subsidiaries Tata Consultancy Services Asia Pacific Pte Ltd and Tata Consultancy Services Malaysia Sdn Bhd, subscribed to 100% share capital of PT Tata Consultancy Services,
Indonesia, a company formed for providing consulting and IT related services in Indonesia Tata Consultancy Services Netherlands B V, a wholly owned subsidiary acquired 75% equity interest in Switzerland based TKS - Teknosoft S A, for a consideration of Rs 368.06 crore. TCS FNS Pty Ltd, another subsidiary acquired 100% equity interest in an Australian based company, TCS Management Pty Ltd, for a total consideration of Rs 15.75 crore. Also, TCS FNS Pty Ltd subscribed to 100% share capital of Financial Network Services Beijing Co Ltd to provide consulting and IT related services in China. The company, through their wholly owned subsidiaries Tata Consultancy Services BPO Chile S A and TCS Inversiones Chile Limitada, subscribed to 100 % share capital Tata solution Center S A, to provide BPO services in Ecuador. During the year 2007-08, the company opened a centre in Cincinnati, USA, and a large centre in India at Hyderabad and laid the foundation for a large centre in Pune. They launched a major brand building initiative in order to articulate and propagate its new brand positioning. Also, they signed a new multi-year contract with Chrysler LLC for providing a comprehensive portfolio of IT services. TKS Services S.A., Quartz Software Technology S.A. and Tata Consultancy Services Financial Solutions Limited merged with Tata Consultancy Services Switzerland Limited with effect from April 1, 2007. In May 25, 2007, the company through their wholly owned subsidiary, Tata Consultancy Services Do Brasil Desenvolvimento De Servicos Ltda, acquired 100% equity interest in a Brazil based Company, GT Participacoes S.A. Also, Tata Consultancy Services Do Brazil Desenvolvimento De Servicos Ltda and GT Participacoes S.A. have merged with Tata Consultancy Services Do Brazil Ltda with effect from July 1, 2007. In June 21, 2007, the company subscribed to 100% share capital of Tata Consultancy Services Morocco SARL AU, a company formed for providing a range of computer enabled services in Morocco. In July 13, 2007, the company through their wholly owned subsidiary, Tata America International Corporation, acquired 100% voting power in TCS Financial Management LLC. In October 23, 2007, the company subscribed to 60% of the share capital of Tata Consultancy Services (Africa) (Pty) Limited, a Company formed for providing IT services and investing in companies in South Africa. In January 24, 2008, the company sold their shareholding interest in their associate Conscripti (Pty) Ltd, for Rs 3.83 crore. In March 2008, the company opened their North America Delivery Center called TCS Seven Hills Park. During the year 2008-09, the company acquired Citigroup Inc.'s (Citi) 96.26% interest in TCS e-Serve Ltd (formerly known as Citigroup Global Services Limited), the India-based captive BPO, for a total consideration of USD 504.54 million. In addition, Citi signed an agreement with the company to provide process outsourcing services to Citi and their affiliates for an aggregate amount of USD 2.5 billion over a period of 9.5 years. During the year, the company through their subsidiary, Tata Consultancy Services Asia Pacific Pte Ltd, subscribed to 100% share capital of Tata Consultancy Services (Thailand) Ltd and Tata Consultancy Services (Philippines) Inc. In June 2008, the company got $11.5 million transformational deal to design, install and integrate a tax administration system for the Uganda Revenue Authority (URA). In July 29, 2008, the company won the highest incremental improvement award and moved to the Industry Leader position in the Tata Business Excellence Model ('TBEM') at the JRD QV Awards ceremony. In October 22, 2008, the Tata Infotech Deutschland GmbH has merged with Tata Consultancy Services Deutschland GmbH. The merged entity is a wholly owned subsidiary of the company. In December 11, 2008, the company subscribed to 50% share capital of National Power Exchange Ltd, established to promote trading of electrical power in India. In June 5, 2009, the company, through their wholly owned subsidiary, Tata Consultancy Services Canada Inc, acquired 100% interest in ERI Holdings Corp. In January 1, 2010, the company, through their wholly owned subsidiary, TCS Iberoamerica S.A., subscribed to 100% interest of TCS Uruguay S.A. In January 1, 2010, they purchased 100% interest of MGDC S.C., Mexico, through their wholly owned subsidiaries, TCS Uruguay S.A. and TCS Argentina S.A. In June 2010, the company signed a multi-year outsourcing contract with Telenor Norway. In June 30, 2010, Syscrom S.A., Chile merged with Tata Consultancy Services BPO Chile SA, a wholly owned subsidiary of TCS Inversiones Chile Limitada. Also, Custodia De documentos Interes Limitada, Chile merged with Tata Consultancy Services BPO Chile SA, a wholly owned subsidiary of TCS Inversiones Chil Limitada. During the year 2010-11 , the company set up five subsidiaries namely, MahaOnline Limited, Diligenta 2 Limited, MS CJV Investments Corporation, Retail FullServe Limited and CMC eBiz Inc. Also, Financial Network Services (H.K.) Limited was
liquidated and de-registered during the year. The Company entered into an agreement with the Government of Maharashtra pursuant to which a new subsidiary company, MahaOnline Ltd (MahaOnline) was setup on July 28, 2010 with equity participation from TCS and Government of Maharashtra. MahaOnline provides online internet-based citizen services to the residents in Maharashtra. This citizen service portal is integrated with DigiGov, a state-of-the-art eGovernance solution developed by TCS. In August 31, 2010, Diligenta Limited, a majority owned subsidiary, acquired the entire share capital of Unisys Insurance Services Limited (UISL), which provides life and pensions services to its clients in the UK. On this acquisition UISL was renamed as Diligenta 2 Limited. In October 4, 2010, Tata America International Corporation - a wholly owned subsidiary, acquired 100% share capital of MS CJV Investments Corporation. Consequently, the group holding in Tata Consultancy Services (China) Co., Ltd. has increased from 65.94% to 74.63%. In October 8, 2010, the Company acquired 100% equity share capital of SUPERVALU Services India Pvt Ltd from SUPERVALU Inc., one of the largest grocery retailers in North America. In December 2010, the company launched their new business process outsourcing (BPO) center in the Philippines. The company won a contract for establishing and managing the State Data Centre for the state of Uttar Pradesh. In February 2011, they signed five year contract with du, the integrated telecom service provider in the United Arab Emirates. Also, they launched iON - a fully integrated information technology solution for Small and Medium Business (SMB). iON provides on-demand business solutions using scalable cloud computing technology. It has been developed to deliver IT in the third generation service model to SMBs. In August 2011, the company and the Singapore Management University (SMU) announced the establishment of the TCS-SMU iCity Lab to be located at SMU. The collaboration agreement signed states the two organizations are partnering to create a new research facility to develop industry standards and IT frameworks for the emerging intelligent city (iCity) model of urban development. In December 2011, Call Genie Inc. announced that it has entered into a five year reseller agreement with Tata Consultancy Services (TCS) the IT services, consulting and business solutions firm, whereby TCS will resell the full suite of Call Genie and UpSnap Mobile products worldwide. In February 2012, the company signed a multi-year, multi-million euro contract with Europcar. After a rigorous evaluation process, Europcar Information Services (EIS), the company's IT subsidiary, selected TCS to manage strategic IT Services development for its French operations. Also, the company and Mitsubishi Corporation announced a new joint venture, Nippon TCS Solution Center Ltd, for the Japanese market. Nippon TCS Solution Center will offer a full service suite of IT, BPO and Infrastructure services to Japanese corporations. TCS Japan will have 60% stake with Mitsubishi Corporation having a 40% stake. The joint venture will also establish a nearshore delivery center in Japan.
Infosys Ltd
BSE: 500209 | NSE: INFY | ISIN: INE009A01021 MarketCap: [Rs.Cr.] 166,966 | Face Value: [Rs.] 5 Industry: Computers - Software - Large
Company Profile
Infosys Ltd is a global technology services firm that defines, designs and delivers information technology (IT)-enabled business solutions to their clients. The company provides end-to-end business solutions that leverage technology for their clients, including technical consulting, design, development, product engineering, maintenance, systems integration, package-enabled consulting, and implementation and infrastructure management services. The company also provides software products to the banking industry. They have developed finacle, a universal banking solution to large and medium size banks across India and overseas. Infosys BPO is a majority owned subsidiary. Through Infosys BPO, the company provides business process management services, such as offsite customer relationship management, finance and accounting, and administration and sales order processing. The company is having marketing and technical alliance with FileNet, IBM, Intel, Microsoft, Oracle and System Application Products. Infosys Ltd is a public limited and India's second largest software exporter company was incorporated in the year 1981 as Infosys Consultants Pvt Ltd by Mr.N.R.Narayana Murthy at Karnataka. The company was started by seven people with the investment of USD 250. The company became a public limited company in the year 1992. The company was the first Indian company to be listed on the NASDAQ at the year 1999. Infosys also forms a part of the NASDAQ-100 index. Continuously in the year 2001, 2002 and 2003, the company wins the National award for excellence in corporate governance conferred by the Government of India. In April 2002, Infosys BPO Ltd was incorporated in India to address opportunities in business process management. In the year 2004, the company acquired 100% equity in Expert Information Services Pty Ltd, Australia for USD 24.3 million. The acquired company was renamed as Infosys Technologies (Australia) Pty Ltd. In October 2, 2004, they set up a wholly owned subsidiary in People's Republic of China named Infosys Technologies (China) Co Ltd. In the year 2005, the company established Infosys Consulting Inc, a wholly owned subsidiary in Texas, US to add highend consulting capabilities to their Global Delivery Model. The company was selected as 'Best Outsourcing Partner' by the readers of Waters, a publication covering the needs of chief information officers in the capital market firms. In the year 2007, the company increased the stake value in Progeon to 98.9% after acquiring shares from Citicorp International Financial Company. Infosys had taken over Philips' finance and administration business process outsourcing (BPO) centers spread across India, Poland and Thailand for USD 28 million. Infosys Technologies has 47% of core business assets stagnating. The company scanning the markets of Europe and Japan for acquisitions in the price bands of USD 200 - USD 300 million to energies their nonlinear business strategy as well as to expand its geographic reach. Infosys set up various Special Economic Zone that for the company has an additional tax benefit. They set up another Special Economic Zone unit in Chandigarh which will be eligible for 100 % deduction of profit from exports tax calculation for the first five years followed by 50% deduction for next five years. Infosys has been pursuing their expansion plans over the past few years. The future enhancement of the company is to emerge the developing economies changing the business landscape with help of accessible talent pools and the adoption of non-linear growth model, it is a long term strategy. Infosys Technologies Ltd has partnered with ACDI/VOCA for promotes broad-
based economic growth and to develop information and communication technology-enabled application to improve efficiencies in the agro supply chain in India. In the year 2008, the company established their first Latin American subsidiary, namely Infosys Technologies S de R L de C V in Mexico to improve proximity to their North American clients. They also opened a development center and office for the region in Monterrey, Mexico. As of April 2008, the company acquired Internet Protocol (IP) from an Australian company to add more functionality to finacle. The IP, that provides a comprehensive set of financial tools to company's existing product line. In July 2008, the company launched ShoppingTrip360 to help retailers and consumer packaged goods (CPG) companies achieve visibility into in-store activity. ShoppingTrip360 is a platform that enables a suite of managed-information services to create a 360-degree view of real time in store shopper and shelf activity. The company was ranked among the top 50 most respected companies in the world by Reputation Institute's Global Reputation Pulse 2009. They have been voted the 'Most Admired Indian Company' in The Wall Street Journal Asia 200 for 10 years in a row since 2000. The company was also listed in the Most Admired Knowledge Enterprises (MAKE) 2008 study and Forbes' Asian Fabulous 50 for the fourth consecutive year. In March 2009, the company incorporated a wholly owned subsidiary in Sweden, namely Infosys Technologies (Sweden) AB. In November 2009, the company opened their second Latin America IT Development Center in Mexico offering global, near-shore, and Latin American clients a full range of information technology (I.T.) services including Business and I.T. Consulting, Business Process Outsourcing (BPO), Packaged Solutions Implementation and Infrastructure Management. In November 12, 2009, the company and NVIDIA Corp. entered into a partnership to develop Nvidia Cuda to compute unified device architecture and technology-enabled software solutions. Also, the company signed a contract with Georgia-Pacific LLC (Georgia-Pacific), a forest and consumer products company, to implement its Supply Chain Visibility and Collaboration Suite. In December 2009, the company has set up a wholly owned unit in the U.S. to tap the multibillion dollar opportunities from government projects. The subsidiary, called Infosys Technologies Inc, will be headquartered in Dallas, Texas, where the company has most of their operations. In December 14, 2009, the company launched Flypp, an application platform which will empower mobile service providers to delight digital consumers through a host of ready-to-use experiential applications across the universe of devices and in December 15, 2009, they launched Finacle Advizor, an integrated platform which helps banks to deliver products and services through a fully assisted self-service channel using existing Internet banking capabilities. Also, the company incorporated a wholly owned Brazilian subsidiary, namely Infosys Technologia Do Brasil Ltda. During the year 2009-10, Infosys Consulting Inc incorporated a wholly-owned subsidiary, Infosys Consulting India Ltd and invested Rs 1 crore in the subsidiary. SETLabs' IP Cell filed 31 patent applications in the United States Patent and Trademark Office (USPTO) and Indian Patent Office. In December 2009, Infosys BPO acquired 100% voting interests in McCamish Systems LLC (McCamish), a business process solutions provider based at Atlanta, US. The business acquisition was conducted by entering into Membership Interest Purchase Agreement for a cash consideration of Rs 173 crore and a contingent consideration of Rs 67 crore. In March 2010, the company launched Finacle Treasyry-in-a-Box, a rapid implementation framework for an integrated front, middle and back office treasury system. During the year 201011, the company formally launched their new corporate strategy, Building Tomorrow's Enterprise to showcase our plan for leading the services industry into the new era as the next generation global consulting and services company. Infosys Labs' IP Cell filed 91 patent applications in the United States Patent and Trademark Office (USPTO) and the Indian Patent Office. In February 2011, the company incorporated a wholly-owned subsidiary, Infosys (Shanghai) Company Ltd. Also, they inaugurated their first Software Development Block (I) at their Technopark Campus II (SEZ) in Thiruvanthapuram, Kerala. A 1,800 seater Software Development Block (II) is also currently under construction at their Technopark Campus II (SEZ) in Thiruvanthapuram, Kerala. The name of the company was changed from Infosys Technologies Ltd to Infosys Ltd with effect from June 16, 2011. In November 2011, Atlas Copco AB entered into an agreement with the company to handle parts of its financial processes, such as accounting to reporting and processing of supplier invoices. The project will affect approximately 230 positions within Atlas Copco, and of these Infosys will offer employment to around 70 staff working in the Czech
Republic. The transition of services to Infosys is planned to begin on November 16, 2011. In December 2011, the company signed a multi-year Transformation and Business IT services contract with Syngenta AG. In a landmark contract that will provide consistency and predictability of service delivery, Infosys will consolidate Syngenta's Global Business IT services landscape under a single shared services engagement. In February 2012, Bharti Airtel choose the company as its partner for Airtel Money, mobile wallet service by a mobile operator. Under this partnership, Infosys WalletEdge, the mobile commerce platform will enable the ubiquitous mobile wallet service to support cashless payments and settlements needs of diverse customer segments.
Wipro Ltd BSE: 507685 | NSE: WIPRO | ISIN: INE075A01022 MarketCap: [Rs.Cr.] 96,590 | Face Value: [Rs.] 2 Industry: Computers - Software - Large Company Profile Wipro Ltd is a leading India based provider of IT Services, including Business Process Outsourcing (BPO) services, globally. The company provides comprehensive IT Solutions and Services, including Systems Integration, Information Systems Outsourcing, IT Enabled Services, Package Implementation, Software Application development and maintenance, and Research and Development Services to corporations globally. They also provide Consumer Products, Lighting, Furniture, Eco Energy, Water treatment and Hydraulic business. The company is the first PCMM Level 5 and SEI CMM Level 5 certified IT Services Company globally. In the Indian market, they are a leader in providing IT Solutions and Services for the corporate segment in India, offering System Integration, Network Integration, Software Solutions and IT Services. In the Asia Pacific and Middle East markets, they provide IT Solutions and Services for global corporations. The company is headquartered in Bangalore, India. The company provides the integrated business, technology and process solution on a global delivery platform to customers across Americas, Europe, Middle East and Asia Pacific, they offer business value to clients through process excellence and service delivery innovation such as Information Technology services, Product Engineering services, Technology Infrastructure services, Business Process Outsourcing services and consulting services. Wipro Ltd was incorporated in the year 1945 at Karnataka by Azim H Premji who is promoter and chairman of the company. The company started as a edible oil producer and then transformed themselves in into leading player in Fast Moving Consumer Goods and IT services & Products business. During the year 1994-95, the company secured ISO 9001 certification for their five manufacturing and development facilities. In February 2001, the company became the first software technology and services company in India to be certified for ISO:14001 certification for complying with the international standards for Environmental Management System (EMS) in three major software development and technology centers in Bangalore. Wipro Technologies won the 'Banker Technology Award' for the year 2004 Instituted by the Financial Times in the 'Risk Management Award' category. During the year 200506, the company acquired mPower Software Services Inc, a Princeton, New Jersey, US headquartered company with a development center in Chennai and MPACT Technology Services Pvt Ltd, based in Chennai, for an all cash consideration of USD 28 million. Also, they acquired New Logic Technologies AG, an Austrian firm which is mainly engaged in the semiconductor IP business and the Engineering Design Services business including the Analog Mixed Signal Business for an all cash consideration of Euro 26 million. The company received the BEST award from American society for training & development (ASTD) for three consecutive years 2004, 2005 and 2006. During the year 2006-07, the company acquired US based Quantech Global Services LLC and the India based Quantech Global Services Ltd for a cash consideration of approximately USD 3 million. They acquired US based CMango Inc and India based CMango India Pvt Ltd for cash consideration of USD 20 Million. They also acquired Finland based Saraware Oy Middle East and SAARC operations of 3D Networks and Planet PSG during the year. In their Consumer Care and Lighting business, the company acquired North-West Switches business from NorthWest Switchgear Ltd, a company in the business of switches, sockets, MCBs etc. for an upfront
cash consideration of Rs 1,022 million. In the Infrastructure Engineering business, they acquired Hydrauto Group AB for a cash consideration of USD 31 million. The company in partnership with Motorola and formed a joint venture namely WMNETSERV Ltd for delivering world-class managed Services to telecom operators in the area of network operations. During the year 200708, as per scheme of amalgamation, Wipro Infrastructure Engineering Ltd, Wipro Healthcare IT Ltd, Quantech Global Services Ltd mPact Technology Services Pvt Ltd, mPower Software Services (India) Pvt Ltd and cMango India Pvt Ltd were amalgamated with the company with effect from April 1, 2007. The company in association with DAR Al-Riyadh Holding Co Ltd formed a joint venture namely Wipro Arabia Ltd, for providing application development, implementation and maintenance services, systems integration and data storage services in the Kingdom of Saudi Arabia. During the year, the company acquired 100% shareholding in Unza Holdings Ltd, a Singapore based Fast Moving Consumer Goods company together with their subsidiaries for an all cash consideration of approximately USD 246 million. They acquired US-based provider of IT infrastructure management, enterprise application and business process outsourcing services, for an acquisition price of about USD 600 million. They also acquired OKI Techno Centre Singapore Pte Ltd (now called as Wipro Techno Centre Singapore Pte Ltd) in an all cash deal of USD 2.5 million. During the year 2008-09, the company invested an aggregate of USD 432 million as equity, in their direct subsidiaries Wipro Cyprus Pvt Ltd, Wipro Holdings (Mauritius) Ltd, Wipro Inc and Wipro Technology Services Ltd. They also re-structured a few of their overseas subsidiaries and merged them with their holding company in the US. In January 2009, the company acquired Wipro Technology Services Ltd (formerly called as Citi Technology Services Ltd) for USD 127 million. During the year 2009-10, Wipro Networks Pte Ltd, Singapore and WMNETSERV Ltd, Cyprus were amalgamated with the company with effect from April 1, 2009. In August 2009, the company entered into partnership with Lavasa Corporation Ltd for planning, implementing and managing Information and Communication Technology services across Lavasa City. In October 2009, the company signed an agreement with Delhi International Airport Pvt Ltd and formed a joint venture company namely Wipro Airport IT Services Ltd. Also, Wipro GE Healthcare Pvt Ltd, the joint venture between the company and GE Healthcare, transformed their business by integrating several existing stand-alone business units and manufacturing plants of GE Healthcare in India under Wipro GE Healthcare Entity. In November 2009, the company signed an agreement to acquire the 'Yardley' Brand business in Asia, Middle East, Australia and certain African markets from UK based Lornamead Group. In March 2010, they won a turnkey project from the Financial Intelligence Unit - India, Ministry of Finance, Government of India. As part of the project, the company will implement FiNnet (Financial Intelligence Network) for FIU-IND. In April 2010, the company signed a partnership agreement with Philips to offer Blu-ray middleware and solution development services around Philips' developed Blu-ray technology. In May 2010, the company and Oracle Corporation launched a co developed solution, a Process Integration Pack (PIP) for the High Technology industry. This solution is part of Wipro's offerings that provide a comprehensive solution footprint for the High Technology industry. They entered into a coinnovation agreement with SAP AG to develop and deliver sustainability management and energy management solutions to enterprise customers globally. In June 2010, the company's Business Process Outsourcing division partnered with Microsoft Corporation for providing global Legal Process Outsourcing (LPO) for Microsofts Intellectual Property (IP) portfolio. The company launched Wipro Hospitality Management Solution at HITEC 2010, the conference for the Hospitality and Leisure industry. In July 2010, the company in association with Lavasa Corporation Ltd and Cisco Systems Inc signed definitive agreements for Cisco to participate in MyCity Technologies Ltd to provide information and communications technology services in the new development of Lavasa City. In August 2010, the company entered into a five year agreement with ArcelorMittal, the steel company, to consolidate and migrate their messaging systems to the Microsoft Exchange 2010 messaging platform. In September 2010, the company signed five year strategic partnership with Central Bank of India for providing core banking solution for seven sponsored regional rural banks. The company will deliver business-IT alignment by deploying and implementing the core banking solution and the identified delivery channels seamlessly. They will also set up a 24 hour centralized helpdesk facility for the project covering applications, data center, networks, security and end user systems. During the year 2010-11, the company re-structured a few of their subsidiaries including overseas subsidiaries
through merger/ other legal process. Wipro Yardley consumer care Pvt Ltd, a subsidiary company got merged with Wipro Ltd with effect from April 1, 2010, being the appointed date. In December 2010, the company signed a contract with Vodafone Essar. As a part of this strategic engagement, the company will support Vodafone Essar with its fixed line telecom services for enterprise business customers. Wipro will provide a wide range of services including network design and build, integration with existing IT OSS/ BSS applications and managed services if the setup over three years. In addition, Wipro will also build an Enterprise Network Operation Center to manage the operations of Vodafone Essar's enterprise customers. In January 2011, the company and Callidus Software Inc entered into a partnership to drive sales performance management across organizations in the Asia-Pacific region. In May 2011, the company signed an agreement to acquire majority stake of Brazil based Hydraulic Cylinder manufacturer R.K.M. EQUIPAMENTOS HIDRAULICOS LTDA. In June 10, 2011, the company acquired the Commercial Business Services Business Unit of Science Applications International Corporation (SAIC).
HCL Technologies Ltd BSE: 532281 | NSE: HCLTECH | ISIN: INE860A01027 MarketCap: [Rs.Cr.] 62,675 | Face Value: [Rs.] 2 Industry: Computers - Software - Large HCL Technologies Ltd is a global technology company. The company is primarily engaged in providing a range of software services, business process outsourcing and infrastructure services. The company leverages an extensive offshore infrastructure and its global network of offices in various countries and professionals to deliver solutions across select verticals including Retail, Aerospace and defense, Automotive, Telecom, Financial Services, Government, Hi-tech, Media and Entertainment, Travel, Transportation and Logistics, Energy and utilities, Life Sciences and Healthcare. HCL Technologies Ltd was incorporated in the year 1991 as HCL Overseas Ltd. The company received the certificate of commencement of business on February 10, 1992. In July 14, 1994, the name of the company was changed to HCL Consulting Ltd. In the year 1996, the company formed a 50:50 joint venture namely HCL Perot Systems NV with Perot Systems Corporation to provide access to high value client base of Perot Systems. HCL Technologies focuses on Transformational Outsourcing, working with clients in areas that impact and re-define the core of their business after their IPO in 1999 with aim of foray into the global IT landscape and in the same year, the company changed its name to HCL Technologies Ltd. The company started to create wholly owned subsidiaries to cater specific geographic regions from the year 1999. They had the widest service portfolio among Indian IT service providers, with each of its services having attained critical mass. In the year of 2000 the company set up a dedicated offshore development centre in Chennai for KLATencor Corporation, a supplier of process control and yield management solutions for the semiconductor and related microelectronics industry. HCL Comnet, the wholly owned subsidiary company in association with its new partner Globeset Inc introduced net security management solutions. The company launched the Nokia professional centre in New Delhi, second among the chain of centres across the country. In the year 2001, the company entered into a strategic alliance with Nasdaq-listed Vitesse Semiconductor to develop software solutions for global networking markets. They also entered into a strategic alliance with Toshiba Information Systems (Japan) Corporation to set up a dedicated offshore software development centre for developing embedded software for the Japanese company. HCL Comnet Systems & Services Ltd, a fully owned subsidiary company was gone into the business of Web-enabling applications through the launch of demand-chain management solutions. In the year 2002, the company acquired Gulf Computers Inc, USA and formed a JV with Answerthink, Inc., a leading US based provider of technology enabled business transformation solutions to Global 2000 firms. A strategic technology joint venture was made with Jones Apparel Group, Inc. Jones Apparel Group, Inc. a Fortune 500 Company in the same year and also entered into a joint venture with M.A. Partners, a management consulting
firm to address software services opportunities in Global Finance Markets, especially in the areas of Investment Banking, Asset Management and Private Banking. M.A. Partners brings a wealth of domain expertise and clients including many of the top Global Investment Banking firms to the JV. In the year 2003, BT Group UK's telecom service provider gave a contract worth of $160 million for BPO service operations. The company set up an exclusive centre in Noida for exeucting the orders given by BT Group. The software business of HCL Infosystems Ltd was transferred to the company. The company set up Insurance Solutions Center in Chennai. In the year 2004, the company entered into a strategic tie-up with IBM Rational Software, a division of IBM, to strengthen its software development capabilities. The company was conferred the prestigious Excellence in Education Award for 2004 by the Life Office Management Association (LOMA). In August 2004, BPO delivery centre in Chennai got BS7799 certification, by the British Standards Institute (BSI). They introduced Cross View; a framework based Computer Systems Validation (CSV) methodology for the development of robust software applications in the Life Sciences arena. In the year 2005, SEBI made a tie up with the company for market surveillance and the company formed joint venture with NEC, Japan. The company amalgamated their six wholly owned subsidiaries namely, DSL Software Ltd, Shipara Technologies Ltd, HCL Technologies BPO Services Ltd, HCL Technologies (Mumbai) Ltd, Aquila Technologies Ltd and HCL Enterprise Solutions (India) Ltd with the company. In February 2005, the company acquired an Irish Call centre and this acquisition establishes the company's position as the single largest BPO Centre operation on the Island of Ireland. In the year 2006, the company launched RoHS Compliance Management System for Medical Device Users and entered $70 million outsourcing deal with Teradyne of US. HCL developed Trusted ICT Infrastructure Platforms for BPO-ITE'S Segment and has linked pact with Canada based electronics manufacturing services company Celestica Inc to jointly design and manufacture electronic products for global original equipment manufacturers (OEMs). The company forayed into an alliance with $200 million Saudi Arabian company namely Advanced Electronics Company (AEC) to implement IT projects in West Asia in the year 2007 and formed a strategic alliance with Eckler to strengthen Insurance Domain expertise. The company made USD 15 million contract with Aleni Aeronautica, to provide engineering services that will support the improvement of the C-27J Spartan production line. In the year 2007, HCL Venture Capital Ltd, a company incorporated in Bermuda and downstream subsidiary of the company was merged with HCL Bermuda Ltd. Also, HCL Technologies (Mass) Inc., a company incorporated in United States of America and a down stream subsidiary of the company was merged with HCL America Inc. During the year 2007-08, the company incorporated their wholly owned subsidiary viz. HCL Technologies (Shanghai) Limited. Through this entity the company established its first sales and delivery center in Shanghai with an initial investment of Rs 2.77 crore. In order to consolidate its position in Enterprise Application Integration (EAI) space, the company acquired the balance 49% stake in its Joint Venture Company viz. HCL EAI Services Inc., a California corporation for a consideration of Rs. 13.32 crore through their downstream subsidiary HCL America Inc., a company incorporated in USA. With this acquisition, HCL EAI Services Inc. became 100% subsidiary of the company. Further, HCL EAI Services Inc. was amalgamated with HCL America Inc. with effect from July 1, 2008. During the year, the company set up four branches at Dublin in Ireland, Zurich in Switzerland, Tel- Aviv in Israel and Prague in Czech Republic. In December 2007, the company and Jones had entered into an agreement (Termination Agreement) to terminate the Joint Venture agreement entered in June 2002. As a part of the termination agreement, a subsidiary of the Company has obtained binding commitments for the provision of IT services to Jones, with an aggregate contract value of Rs. 96.8 crores (USD 22.5 million) upto 2012. Further, pursuant to this termination, the Joint Venture Company in Bermuda viz. HCL Jones Technologies (Bermuda) Limited will be wound up. During the year
2008-09, the company acquired all the capital stock of Axon Group Ltd (formerly known as Axon Group Plc), a leading UK based SAP consulting company for a cash consideration of Rs3,302.39 crores by way of a cash offer made by the company to the shareholders of Axon Group Ltd. The company acquired all the capital stock of HCL Insurance BPO Services Ltd (formerly known as Liberata Financial Services Ltd) (IBS), incorporated in UK. Also, the company acquired all the capital stock of HCL Expense Management Services, Inc (formerly known as Control Point Solutions, Inc) (CPS) for a cash consideration of Rs 107.65 crore. During the year, the company set up six subsidiaries to carry out the activities in Special Economic Zone in different locations in India to get various tax benefits. They also set up their branches in different locations to expand its operations in new geographies. The company set up their branches in Dubai, UAE, Helsinki, Portugal, Finland and Macau during the year ended June 30, 2009 while the branch in Russia was set subsequent to June 30, 2009. In September 2008, HCL BPO expanded their global presence to the USA with the acquisition of Control Point Solutions (CPS). This acquisition makes HCL BPO the first Indian BPO to enter the Telecommunications Expense Management (TEM) market. CPS has been rebranded to HCL Expense Management Services (HCL EMS). During the year 2009-10, the company set up their step down subsidiaries in Denmark viz. HCL Technologies Denmark ApS and in Norway viz. HCL Technologies Norway AS. Also, they set up their branch office in USA. During the year 2010-11, as per the scheme of amalgamation, HCL Technoparks Ltd, a wholly owned subsidiary of the Company, was amalgamated with the company with effect from August 27, 2010. They incorporated HCL Technologies France, PT HCL Technologies Indonesia, HCL Technologies Philippines, Inc, HCL Arabia LLC, Anzospan Investments Pty. Limited, HCL Technologies South Africa (Proprietary) Ltd and Filial Espanola De HCL Technoloiges S.L. as step down subsidiaries of the company. Also, they closed down their two steps down subsidiaries viz. Aspire Solutions Sdn. Bhd., a company incorporated in Malaysia and Axon EBT Trustees Limited, a company incorporated in United Kingdom. In January 2011, it acquired certain software assets of Citi Securities and Fund Services. In July 2011, the company was selected to provide application management services to IKEA. In September 2011, the company signed a strategic five year, Application Support Transformation deal with Deutsche Bank's Capital Markets arm. The service factory delivery model implemented by HCL is expected to enhance productivity, driven by transparent Service Level Agreements (SLAs) and performance metrics, and comes as Deutsche Bank endeavors to move away from a traditional applications support model to a set of process driven services governed by global standards like Information Technology Infrastructure Library (ITIL) and LEAN. In October 2011, Cast SA signed a strategic partnership agreement with the company to strengthen the ASSESS-SMART services of HCL Technologies. In February 2012, the company signed an agreement with State Street Bank and Trust Company (State Street) to provide business process outsourcing services in support of a variety of State Street's investment services businesses. Also, they entered into a strategic relationship with Great American Insurance Group (GAIG), a company in specialty property and casualty insurance, to provide Integrated IT services, Business Process Outsourcing (BPO) and Infrastructure Management Services to GAIG and its affiliates.
LITERATURE REVIEW What is analysis? The examination and evaluation of the relevant information to select the best course of action from among various alternatives. The methods used to analyze securities and make investment decisions fall into two very broad categories: fundamental analysis and 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 doesn't care one bit about the "value" of a company or a commodity. Technicians (sometimes called chartists) are only interested in the price movement in the market. What is technical analysis? Technical analysis is a method of evaluating securities by analyzing the statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity. What is fundamental analysis? Fundamental Analysis involves examining the economic, financial and other qualitative and quantitative factors related to a security in order to determine its intrinsic value. It attempts to study everything that can affect the security's value, including macroeconomic factors (like the overall economy and industry conditions) and individually specific factors (like the financial condition and management of companies). Fundamental analysis, which is also known as quantitative analysis, involves delving into a company’s financial statements (such as profit and loss account and balance sheet) in order to study various financial indicators (such as revenues, earnings, liabilities, expenses and assets). Such analysis is usually carried out by analysts, brokers and savvy investors. Many analysts and investors focus on a single number-net income (or earnings)--to evaluate performance. When investors attempt to forecast the market value of a firm, they frequently rely on earnings. Many institutional investors, analysts and regulators believe earnings are not as relevant as they once were. Due to nonrecurring events, disparities in measuring risk and management's ability to disguise fundamental earnings problems, other measures beyond net income can assist in predicting future firm earnings.
Two Approaches of fundamental analysis While carrying out fundamental analysis, investors can use either of the following approaches: 1 .Top-down approach: In this approach, an analyst investigates both international and national economic indicators, such as GDP growth rates, energy prices, inflation and interest rates. The 9 search for the best security then trickles down to the analysis of total sales, price levels and foreign competition in a sector in order to identify the best business in the sector. 2. Bottom-up approach: In this approach, an analyst starts the search with specific businesses, irrespective of their industry/region. How does fundamental analysis works? Fundamental analysis is carried out with the aim of predicting the future performance of a company. It is based on the theory that the market price of a security tends to move towards its 'real value' or 'intrinsic value.' Thus, the intrinsic value of a security being higher than the securityâ€&#x;s market value represents a time to buy. If the value of the security is lower than its market price, investors should sell it. The steps involved in fundamental analysis are: 1. Macroeconomic analysis, which involves considering currencies, commodities and indices. 2. Industry sector analysis, which involves the analysis of companies that are a part of the sector. 3. Situational analysis of a company. 4. Financial analysis of the company. 5. Valuation The valuation of any security is done through the discounted cash flow (DCF) model, which takes into consideration: 1. Dividends received by investors 2. Earnings or cash flows of a company 3.
Debt, which is calculated by using the debt to equity ratio and the current ratio (current assets/current liabilities)
Fundamental Analysis Tools These are the most popular tools of fundamental analysis. Earnings per Share – EPS Price to Earnings Ratio – P/E 10 Projected Earnings Growth – PEG Price to Sales – P/S Price to Book – P/B Dividend Payout Ratio Dividend Yield Book Value Return on Equity Ratio analysis Financial ratios are tools for interpreting financial statements to provide a basis for valuing securities and appraising financial and management performance. A good financial analyst will build in financial ratio calculations extensively in a financial modeling exercise to enable robust analysis. Financial ratios allow a financial analyst to: Standardize information from financial statements across multiple financial years to allow comparison of a firm’s performance over time in a financial model. Standardize information from financial statements from different companies to allow apples to apples comparison between firms of differing size in a financial model.
Measure key relationships by relating inputs (costs) with outputs (benefits) and facilitates comparison of these relationships over time and across firms in a financial model. In general, there are 4 kinds of financial ratios that a financial analyst will use most frequently, these are: Performance ratios Working capital ratios Liquidity ratios Solvency ratios
These 4 financial ratios allow a good financial analyst to quickly and efficiently address the following questions or concerns: Performance ratios What return is the company making on its capital investment? What are its profit margins? Working capital ratios How quickly are debts paid? How many times is inventory turned? Liquidity ratios Can the company continue to pay its liabilities and debts? Solvency ratios (Longer term) What is the level of debt in relation to other assets and to equity? Is the level of interest payable out of profits?
WHY ONLY FUNDAMENTAL ANALYSIS Long-term Trends Fundamental analysis is good for long-term investments based on long-term trends, very long-term. The ability to identify and predict long-term economic, demographic, technological or consumer trends can benefit patient investors who pick the right industry groups or companies. Value Spotting Sound fundamental analysis will help identify companies that represent a good value. Some of the most legendary investors think long-term and value. Graham and Dodd, Warren Buffett and John Neff are seen as the champions of value investing. Fundamental analysis can help uncover companies with valuable assets, a strong balance sheet, stable earnings, and staying power. Business insights One of the most obvious, but less tangible, rewards of fundamental analysis is the development of a thorough understanding of the business. After such pains taking research and analysis, an investor will be familiar with the key revenue and profit drivers behind a company. Earnings and earnings expectations can be potent drivers of equity prices. Even some technicians will agree to that. A good understanding can help investors avoid companies that are prone to shortfalls and identify those that continue to deliver. In addition to understanding the business, fundamental analysis allows investors to develop an understanding of the key value drivers and companies within an industry. A stock's price is heavily influenced by its industry group. By studying these groups, investors can better position themselves to identify opportunities that are high-risk (tech), low-risk (utilities), growth oriented (computer), value driven (oil), non-cyclical (consumer staples), cyclical (transportation) or income-oriented (high yield). Knowing Who's Who
Stocks move as a group. By understanding a company's business, investors can better position themselves to categorize stocks within their relevant industry group. Business can change rapidly and with it the revenue mix of a company. This has happened with many of the pure internet retailers, which were not really internet companies, but plain retailers. Knowing a company's business and being able to place it in a group can make a huge difference in relative valuations. The charts of the technical analyst may give all kinds of profit alerts, signals and alarms, but there’s little in the charts that tell us why a group of people make the choices that create the price patterns.
RESEARCH METHODOLOGY Research methodology is a way to systematically solve the research problem. The research methodology using for find out the solution of the research problem is analytical research methodology and some extend descriptive research methodology Secondary Data The sources of secondary data for solve the problems are:•
Company Annual Report
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ACE equity database
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Internet-websites
Period of study The period of the study is 3 years i.e. (2010-2012). Company 3 years data has been taken for the analysis. Techniques The technique used in the analysis of the company is excel sheets, graphs and tables of financial statement for example balance sheet, profit loss a/c, cash flow statement, dividend per share, ratio analysis, valuation ratio etc. OBJECTIVE OF STUDY
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To study the concepts and techniques of fundamental analysis.
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To study the growth trend in IT sector and in particularly of TCS, INFOSYS, HCL and WIPRO.
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To evaluate the performance of TCS, INFOSYS, HCL and WIPRO in indian stock market with respect to its financial performance.
DATA ANALYSIS AND RESULT The process of evaluating data using analytical and logical reasoning to examine each component of the data provided. This form of analysis is just one of the many steps that must be completed when conducting a research experiment. Data from various sources is gathered, reviewed, and then analyzed to form some sort of finding or conclusion. There are a variety of specific data analysis method, some of which include data mining, text analytics, business intelligence, and data visualizations Data can be of several types • •
Quantitative data is a number Qualitative data is a pass/fail or the presence of a characteristic
Quantitative data is data measured or identified on a numerical scale. Numerical data can be analyzed using statistical methods, and results can be displayed using tables, charts, histograms and graphs. The term qualitative data is used to describe certain types of information. This is almost the converse of quantitative data, in which items are more precisely described as data in terms of quantity and in which numerical values are used. However, data originally obtained as qualitative information about individual items may give rise to quantitative data if they are summarized by means of counts. Qualitative data described items in terms of some quality or categorization that may be 'informal' or may use relatively ill-defined characteristics such as warmth and flavor. However, qualitative data can include well-defined aspects such as gender, nationality or commodity type.
IMPACT OF QE3 TAPERING IN GLOBALLY June 19th, 2013 was a special day. Gold hit a three-year low, the Indian Rupee hit another alltime low against the dollar and the yield on the U.S. 10-years’ Treasury note jumped as high as 2.46%.
Well, is Fed’s statement to withdraw its quantitative easing programme by mid-2014 has got anything to do the way Sensex, Nifty and other Asian indices reacted? They should be! As the news about tapering of QE came out in open, equities all across the world started falling, with the Asian indices being hammered the most. Is this kind of market reaction justified? After all, the news wasn’t a surprise; in fact quite anticipated by the market participants. Since the announcement made in May 2013, by Bernanke, the Indian stock market has shown high volatility. It crashed 383 points on 23rd
May, 2013 with the earlier announcement and has further slid 5% since then. The main question is, ‘Is the market over reacting?’ After the recent announcement by the US Federal Reserve to buy US treasuries and mortgage bonds worth $40 billion a month, aka, Quantitative Easing - 3 (QE3), stock market indices around the world posted heavy gains. In India, the Sensex and Nifty jumped more than 2% each, with the Diesel price hike and expectations of FDI in retail and aviation also contributing to the increase. This is the third such initiative taken by the US Federal Reserve in the past 4 years to improve liquidity and get the US economy growing again by lowering interest rates. This money, which the banks by selling Mortgage Backed Securities (MBS) get at artificially low interest rates, finds its way into commodities and emerging market equities such as India where returns are much higher. Let us first analyse the impact of QE1 and QE2 to try to understand how QE3 may impact the country.
The US Fed bought around $1.45 trillion of mortgage-backed securities and other agency debt during the 14 months of QE1 and around $600 billion worth of securities during the 8 months of QE2.
QE1 came at an important time for the Indian markets as the Nifty hadstarted bottoming out around 2500 after which it began its climb. FII’s withdrew around Rs 54,000 crore from January 2008 to November 2008. After QE1 was announced there was a visible change in sentiment, which led to inflows of around Rs1,00,000 crores from December 2008 to March 2010. The Nifty doubled during this period.During QE2, there were inflows of around Rs 40,000 crores but the Nifty actually fell 6 % after reaching a peak of 6150, just before QE2 was announced. The markets responded positively to QE1 whereas the response to QE2 was muted. This could be attributed to the negative effect of higher commodity pricesespecially Oil and lack of reforms by the Indian government hurting investor sentiment.
The Indian basket of crude bottomed out around 40$/bblaround the time QE1 started after which it doubled to around 80 $/bbl by April 2010. By the end of QE2 in June 2011, the price had moved up to around $110/bbl. It can be seen that both QE1 and QE2 had a direct impact on the price of Oil. A higher price of Oil leads to inflation in the country and as India imports about 70% of its Oil requirement, it affects the balance of payments. Coupled with a higher subsidy bill, itaffects the fiscal deficit as wellThe current account deficit in turn put downward pressure on the Rupee, which inflated the Oil import bill even further.
The price of Gold has gained consistently ever since quantitative easing as a strategy was undertaken by central banks around the world. Gold is considered a hedge against inflation and also against fiat currencies, which are being devalued by loose monetary policies of the central banks. It went from just below $800/ounce to around $1200/ounce by the time QE1 ended. It further went up to around $1600/ounce by the time QE2 ended. Gold imports account for a major part of the current account deficit, so a higher price definitely worsens the current account. Gold imports reached a low of around 450 million tonnes in 2008 and reached around 958 million tonnes in 2010. Strong demand despite higher prices hasworsened the current account deficit even further.
On the whole it can be said that QE1 and QE2 were positive for the markets, whereas on the macro economic front, the current account deficit worsened from 1.3% of GDP at the beginning of 2008 to around 2.7% of GDP at the beginning of 2011 which further worsened to 3.7% of GDP at the beginning of 2012 on the back of higher Oil prices and a weak Rupee.
The Consumer Price Index (CPI) that measures inflation has consistently been above the 8 % mark from 2008 to 2012. It was below 6 % at the beginning of 2008 and reached a peak of 16 % in the beginning of 2010. Inflation has certainly worsened after quantitative easing began and is well above the RBI’s comfort level.
A high fiscal deficit and inflation have forced the RBI to keep interest rates high, which is definitely hurting the growth prospects of India. QE3 involves a purchase of $40 billion worth of securities a month, i.e., $360 billion a year. Apart from this the ECB has an open-ended scheme to buy the bonds of the debtor European nations, which will act as a sentiment booster. It is difficult to estimate how much of the money will actually be invested in the Indian markets. But if past trends are any estimate, commodity prices are likely to increasewhich will further fuelinflation and due to our weak policies increase the subsidy burden as well as the fiscal deficit as the higher prices are not passed on to the consumers. It is safe to say that India is a net looser from the QE policy, which is popular with the central banks of the West. Recent efforts taken by the government to reign in the deficit by raising diesel prices by Rs 5, going ahead with disinvestment in 4 PSU’s will have less of an impact if Oil prices begin increasing again. If recent trades are anything to go by, Oil and Gold both skyrocketed after the decision reaching 117$ and 1770$ respectively. Also, the need for a third QE signifies that the earlier 2 QE’s failed to deliver according to the central bank’s objectives, mainly to get the banks lending again and get the US economy growing again. Unemployment rate in the US has stayed above 8% for a long time now.
As of now, there isn’t much of an inflation problem in the US, but there are worries that if such expansionary monetary policies continue inflation could rear its ugly head which would then force the Fed to raise rates before its stated year of 2015. A rise in interest rates in the US would certainly be very bad for India, as investors will most likely withdraw money from India to cover up for losses at home which would not only affect the stock market but also the rupee. Bernanke has exported his problems half way across the globe, when the rest of the world has enough on their plate.
IMPACT OF QE3 TAPERING IN INDIA Rupee at 60: Ten ways how it impacts you The Indian rupee has been making record lows virtually every week. It hit the psychological mark of 60 for the first time ever on Wednesday. The rupee is not only the worst performing currency in Asia, its the second worst performing currency in the emerging markets. Besides being a sad reflection of the state of our economy, here's how a weak rupee impacts you. Here are 10 ways how a weak rupee impacts you: 1. Morale dampener: Except NRIs, who stand to gain the most on account of the rupee weakness, most Indians are worried because of the rapid decline in the rupee. "We are close to a crisis situation. Nothing anybody does is materially going to control the fall... with each passing day, nervousness is increasing," Jamal Mecklai of Mecklai Financial told NDTV. 2. Higher EMIs: Central banks around the world resort to higher rates to stem depreciation in the currency. That's because higher interest rates could bring in higher capital inflows necessary to finance current account deficit. The Reserve Bank may not hike rates, considering India's sluggish growth, but it will certainly hold rates for a "prolonged period," Nomura's India economist, Sonal Varma says. That means living with high equated monthly installments. 3. Stuttering growth: India's GDP grew by 5 per cent in 2012-13, the slowest in a decade. The sharp depreciation in the currency and the RBI's likely tight monetary policy will lower growth expectations. "We see the weak currency as a negative for India's growth," Nomura said.
4. Slowdown in foreign investment: Weak growth prospects will lead to a slowdown in capital inflows hurting investment in Indian economy and more so in the crucial infrastructure sector. 5. Rising inflation: Global commodities have 35 per cent weightage in India's wholesale inflation basket, and as the rupee weakness, the prices of these commodities go up. Nomura estimates that a 10 per cent depreciation in the rupee adds 60-80 basis points to headline inflation. 6. Higher fuel price: Petrol prices have been hiked twice this month. Such hikes will become a recurring feature as rupee weakens further. Crude, which is priced in dollars, is India's biggest import item and a depreciating rupee increases the cost of imports. The worst part is Indians will have to pay more for fuel even though global prices have hit a year-low. 7. Greater volatility in stocks: Foreign funds have sold net $6.7 billion (largely from bonds) from May 22 to June 24, 2013, Nomura says. The BSE Sensex has fallen nearly 8 per cent over the same period. Foreign funds are likely to sell more because the weakness in the rupee makes their investment unattractive. Shares in companies with higher FII holdings will be under pressure. 8. Corporate profits: Exporters will gain, but companies dependent on imported raw materials will see a sharp impact on their bottom line. A weak rupee also exposes companies with unhedged overseas loans. 9. Costlier foreign education: Those planning to go to the U.S. will have to shell out at least Rs. 2-4 lakh more for their expenses because of the sharp fall in the rupee, according to industry body Assocham estimates. 10. Costlier foreign travel: Travelling abroad will be costlier as you will have to pay more rupees to buy dollars for your overseas trip/vacation.
RBI announces Additional measures to address Exchange Market Volatility July 23, 2013
Over the last two months, the Reserve Bank of India (RBI) has undertaken several measures to contain the volatility in the foreign exchange market. Among them, some measures intended to check excessive speculation adding to undue volatility in market conditions were instituted vide the RBI's Press Release No.2013-2014/100 dated July 15, 2013. These measures have had a restraining effect on volatility with a concomitant stabilising effect on the exchange rate. Based on a review of the measures, and an assessment of the liquidity and overall market conditions going forward, it has been decided to modify the liquidity tightening measures as follows: •
The overall limit for access to LAF by each individual bank is set at 0.5 per cent of its own NDTL outstanding as on the last Friday of the second preceding fortnight. This measure will come into effect immediately, i.e., from July 24, 2013 and will remain in force until further notice.
•
Currently, banks are allowed to maintain their Cash Reserve Ratio (CRR) prescribed by the RBI on an average daily basis during a reporting fortnight, with a minimum of 70 per cent of the required CRR on a daily basis. Effective from the first day of the next reporting fortnight i.e., from July 27, 2013, banks will be required to maintain a minimum daily CRR balance of 99 per cent of the requirement.
IMPACT OF QE3 TAPERING ON IT SECTOR Why fall in rupee has minimal effect on IT stocks A fall in the value of the rupee should, in most conditions, be a positive for the Indian information technology industry, which gets most of its revenue from overseas, especially the United States. The recent slide of the rupee, which has lost 5 per cent of its value since the start of the fiscal year, should have been good news for the Indian IT industry. Instead, IT stocks have fallen, with the IT index losing over 6 per cent since April. Here are 5 facts on why this is happening. 1) INR v/s IT index trend
The INR has depreciated around 5 per cent in CY 2012 so far. However, both the BSE IT and CNX IT index have fallen around 2 per cent for the same period. This shows that near-term
movements in the rupee have little demonstrable effect on fundamental stock valuations. “With Indian IT expected to grow at not more than 10-12 per cent for FY13 in US$ terms, we do not believe the recent rupee appreciation alone gives cause for much cheer,” a report by Spark Capital said on Wednesday. 2) International demand v/s rupee: Indian IT is geared to international rather than domestic demand. Hence, the market reacts negatively to any concerns in world economy because this offsets any gains from forex fluctuation. US and Europe are two of the largest markets for the Indian IT sector, both of which are currently seeing a slowdown in growth and labour market. This is likely to affect demand for Indian IT services in the near-term and drive down revenues, which could render forex gains irrelevant, depending on relative value. “In the long run, nearly all of IT spend is discretionary; and a mere depreciation in the rupee does not alleviate market concerns on underlying demand,” the Spark Capital report explained. 3) Historical trends: The trend was the same in 2008-09, when the US was hit with a financial crisis and slipped into recession, the Spark Capital report points out. The US dollar was around Rs. 45-46 levels just prior to Lehman Brothers’ bankruptcy in September 2008. But, by the end of March 2009, the US$ had appreciated around 11 per cent against the Indian rupee. However, the CNX IT index did not mirror this positive development; in fact, it reflected just the opposite movement and declined over 40 per cent during this period. The broader Indian equity market, in comparison, only fell around 30 per cent.
4) Cash generation from forex fluctuations: IT companies generate cash as they get more rupees for every dollar they receive. The impact is seen across the income statement – in revenue, operating profit and net profit. The key variable here is the percentage of revenue from offshore. As this percentage increases, leverage from INR depreciation increases. Percentage of cash generation due to forex fluctuation to the revenue is limited and varies for different companies. If one assumes Rs. 52 per dollar as the exchange rate, cash generation could increase by as much as 25 per cent over the next two years for companies like Persistent Systems and HCL Tech. 5)Hedging: Companies hedge against potential fall or rise in currency values. This is done by taking a contrarion position in currency markets. So, if a company that exports, fears that its revenue or
profit could be affected by a sharp surge in the rupee, it could make up for those losses by hedging. Cash flows arising from realized hedging losses/gains too differ for different companies in the IT sphere. According to the report, Indian IT firms tend to vary widely in their use of currency hedges. “At one end of the spectrum are companies like eClerx, while on the other hand we see companies like Infosys which has very limited hedge coverage for FY13,” the report said. Also, some companies like Infosys have had more or less consistent hedging policies from quarter to quarter, while others might pare their hedge books in the wake of recent INR weakness. Hence, it is difficult to generalize the positive impact of rupee depreciation for the sector as a whole.
Rupee slide, a double whammy for IT industry The depreciating rupee against the U.S. dollar is something less to cheer and more to worry for the Indian IT (information technology) industry. Its impact over a period, particularly in the backdrop of an anticipated inflationary cost pressure, is likely to cloud the short-term gains. “What's happening now on the rupee front will actually be a double whammy for the IT industry in the medium-term,” says Sujit Sircar, CFO, iGATE. The inflationary conditions, he explains, will result in cost pressure for the IT companies. “Costs like travel and power will go up. Also, all import costs will impact our capital expenditure.” On the revenue front, there could be pricing pressure from clients if the depreciation of the rupee continues.
If there is something heartening, it is on the immediate front, as every percentage dollar gain, according to Mr. Sircar, “results in a 25-30 basis points increase in our margins.” Cognizant's CFO Karen McLoughlin told a global conference organised last week by Jeffries that the company had an aggressive hedging programme. “We have about $3.7 billion in outstanding hedges of our rupee expenses which will mature each month through 2015 at an average rate of about 51.9,” she added. Therefore, the “swings in the rupee actually don't give us either as much benefit or pain, depending which way it's going,” she said. Currency volatility For National Association of Software and Service Companies, more than depreciation, the volatility of currency movement is a concern that needs to be tackled since it hinders the planning process for the Indian IT-BPO industry. According to Shiva Ramani, CEO of iOpex Technologies, the steep depreciation “provides consolation in margins in the next couple of quarters post the extinguishment of current hedges. It is also likely that IFRS accounting may actually require provision of mark-to-market losses on booked forwards against present rates at quarter-end dates and could increase provisions.” More than the rupee slide, the broader fear for him is the loss of momentum in spend in the U.S. BFSI sector and also the turmoil in Europe. “We may not see volume growth for couple of quarters, but can see margin improvements. So, to some extent, the wage pressure that service providers feel can be managed without compromising the margins.”
FUNDAMENTAL ANALYSIS OF A COMPANY FUNDAMENTAL ANALYSIS OF TCS rs(million) net sales operating income EBITDA EBITDA margin depreciation interest other income
Mar-10 300289.2 301130 88000.6 29% 6608.9 2069.8 3778.4
Mar-11 373245.1 373669 111195.3 30% 7352.6 627.1 5975.4
Mar-12 488938.3 489280.4 144639.6 30% 9179.4 4482.5 8199.8
PBT PAT PAT margin equity share capital reserve and surplus tangible net worth
83324.4 70916.3 24% 1957.2 150480.7 152437.9
111531.1 91894.9 25% 1957.2 211235 213192.2
139417.4 105234.5 22% 1957.2 260009.5 261966.7
total debt net fixed assets Cash
2032.5 42761 47185.9
1748 54083.8 73780.9
2265.5 66153.6 85173.6
face value no. of shares CMP market capitalization
1 1957.2 1266.2 2478206.6
assets turnover ratio 7.0421646 equity multiplier 0.2805142 return on net worth 47% reserve and surplus 99% debt to equity ratio 1.0384733 sales growth Ebitda growth PAT growth Book Value Per Share CMP/BOOK value
6.9090744 7.3961266 0.2536856 0.2525268 43% 99% 0.8931126 24% 26% 30%
40% 99% 1.1575209 31% 30% 15% 133.84769 9.4600063
INTERPRETATION: In this company’s analysis the I get to find that : 1. Average of return on net worth is 43%. 2. Average of debt to equity ratio is 1.029702. 3. Average of sales growth is 28% 4. Average of pat growth is 22%
FUNDAMENTAL ANALYSIS IF INFOSYS rs(million) net sales operating income EBITDA EBITDA margin depreciation interest other income PBT PAT PAT margin
Mar-10 227420 227650 78840 34.6% 9050 -280 9290 79470 62660 27.5%
Mar-11 275010 275160 89850 32.7% 8540 -400 11540 93250 68350 24.8%
Mar-12 337340 337510 107440 31.8% 9280 -490 18340 116990 83320 24.7%
average 43% 1.029702 28% 22%
equity share capital reserve and surplus tangible net worth
2860 218470 221330
2860 247740 250600
2860 298660 301520
total debt net fixed assets Cash
0 44390 105560
0 48440 150950
0 54090 201610
face value no. of shares CMP Market capitalization assets turnover ratio equity multiplier return on net worth reserve and surplus debt to equity ratio sales growth Ebitda growth PAT growth Book Value Per Share CMP/BOOK value
5 574.2 2322.3 1333464.7 5.1284073 0.2005602 28% 99% 0
5.6804294 0.1932961 27% 99% 0 21% 14% 9%
6.2397855 0.1793911 28% 99% 0 23% 20% 22% 525.1132 4.422475
INTERPRETATION: In this company’s analysis the I get to find that : 1. Average of return on net worth is 24%. 2. Average of debt to equity ratio is 0. 3. Average of sales growth is 22% 4. Average of pat growth is 15%.
FUNDAMENTAL ANALYSIS OF HCL (Rs million)
Mar-10
Mar-11
Mar-12
Net sales Oprating income EBITDA EBITDA Margin Depreciation Interest PBT
121362.9 121421.6 19471.7 16.0% 4181.1 1999.7 14724.3
157304.3 157597.4 24963.7 15.8% 4596.9 1719.1 21351.1
208305.5 208618.2 37264.4 17.9% 5492.4 1426.3 32054.9
average 28% 0 22% 15%
PAT PAT MARGIN
12590 10.4%
16466.3 10.4%
24227.7 11.6%
Equity share capital Reserves and surplus Tangible net worth
1377.7 22244.9 23622.6
1387.4 34829.7 36217.1
1414.3 47580.6 48994.9
Total debt Net Fixed assets Cash
27242.4 19919.9 15803.7
21872.9 23832.7 17295.6
21854.2 31282.9 20509.5
Face value No.of share
2 694
CMP Market capitalisation
636.5 441731
Assests turnover Ratio 6.095492 Equity multiplier 0.843256
6.612654 0.658051
6.668762 0.638493
45% 96% 15.76539 30% 28% 31%
49% 97% 15.45231 32% 49% 47% 70.59784 9.015857
Average Return on net worth Resever and surplus Debt/equity Sales Growth EBITDA Growth PAT Growth Book value per year CMP/BOOK VALUE
53% 94% 19.77383
INTERPRETATION: In this company’s analysis the I get to find that : 1. Average of return on net worth is 49%. 2. Average of debt to equity ratio is 16.99717. 3. Average of sales growth is 31%. 4. Average of pat growth is 39%.
FUNDAMENTAL ANALYSIS OF WIPRO (Rs million)
Mar-10
Mar-11
Mar-12
Net sales Oprating income EBITDA EBITDA Margin Depreciation Interest PBT
272129 272687 60052 22.0% 7543 1774 56134
310385 311031 65108 20.9% 7891 1487 63553
371878 372387 74109 19.9% 9754 3439 70147
49% 16.99717 31% 39%
PAT PAT MARGIN
46495 17.1%
53268 17.1%
56302 15.1%
Equity share capital Reserves and surplus Tangible net worth
2952 124646 127598
4913 164620 169533
4915 196379 201294
Total debt Net Fixed assets Cash
62513 58800 64878
52802 63345 61141
58958 67804 77644
Face value No.of share
2 2462
CMP Market capitalization
385.1 948116.2
Assests turnover Ratio 4.637534 Equity multiplier 0.460822
4.910111 0.373644
5.49211 0.336841
31% 97% 10.7474 14% 8% 15%
28% 98% 11.99552 20% 14% 6% 81.76036 4.710107
Average Return on net worth Resever and surplus Debt/equity Sales Growth EBITDA Growth PAT Growth Book value per year CMP/BOOK VALUE
36% 98% 21.17649
32% 14.63981 17% 10%
INTERPRETATION: In this company’s analysis the I get to find that : 1. Average of return on net worth is 32%. 2. Average of debt to equity ratio is 14.63981. 3. Average of sales growth is 17%. 4. Average of pat growth is 10%.
PEER GROUP COMPARISON Name Company
of Return on NET Debt to Equity Sales Growth Worth Ratio
PAT Growth
TCS
43%
1.0297
28%
22%
INFOSYS
28%
0
22%
15%
HCL
49%
16.9972
31%
39%
WIPRO
32%
14.6389
17%
10%
FINDINGS In this project report there are many facts which say in which IT sector company the investor should invest or not. 1.In the fundamental analysis of TCS, I can get to know that the return on net worth, debt to equity ratio, sales and pat growth are very good. According to my analysis TCS is booming on IT sector. 2.In the fundamental analysis of INFOSYS, I can get to know that the return on net worth, debt to equity ratio, sales and pat growth are very good. According to my analysis INFOSYS is booming on IT sector.
3.In the fundamental analysis of HCL, I can get to know that the return on net worth, sales and pat growth are very good but debt to equity ratio is too high which should be risky for investor to invest in this HCL. 4.In the fundamental analysis of WIPRO, I can get to know that the return on net worth and sales growth are very good but debt to equity ratio and pat growth are not satisfactory which is not a good sign for investor to invest in WIPRO.
Recommendations 1.HCL should reduce their debt to equity ratio. 2. WIPRO should reduce their debt to equity ratio and increase their PAT growth. 3. INFOSYS should take some steps to increase their PAT growth which would be beneficial for the company and the share holders.
4. IT Sector try to get more contract from the foreign countries so that they will exports their products, which will not make any effect on the IT Sector in Stock Market.
LIMITATIONS Fundamental analysis has some limitation involved in it. This limitation can be explained as under: Time Constrain:
Fundamental analysis may offer excellent insights, but it can be extraordinarily timeconsuming. Time-consuming models often produce valuations that are contradictory to the current price prevailing on the exchange. Industry Specific: Fundamental Analysis has been done under one industry (IT SECTOR) and some specific companies. Inadequacies of Data: While making analysis one has to often wrestle with inadequate data. While deliberate falsification of data may be rare, subtle misrepresentation and concealment are common. Future Uncertainties: Future changes are largely unpredictable; more so when the economic and business environment is buffeted by frequent winds of change. In an environment characterized by discontinuities, the past record is a poor guide to future performance.
CONCLUSION Fundamental analysis holds that no investment decision should be without processing and analyzing all relevant information. Its strength lies in the fact that the information analyzed is real as opposed to hunches or assumptions. On the other hand, while fundamental analysis deals with tangible facts, it does not tend to ignore the fact that human beings do not always
act rationally. Market prices do sometimes deviate from fundamentals. Prices rise or fall due to insider trading, speculation, rumor, and a host of other factors. This is true to an extent but strength of fundamental analysis is that an investment decision is arrived at after analyzing information and making logical assumptions and deductions. Furthermore, fundamental analysis ensures that one does not recklessly buy or sell shares- especially buy. Fundamental analysis can be valuable, but it should be approached with caution. If you are reading research written by a sell-side analyst, it is important to be familiar with the analyst behind the report. We all have personal biases, and every analyst has some sort of bias. There is nothing wrong with this, and the research can still be of great value. This analysis carried out at IT Sector, their profit and loss account and balance sheet. I shall suggest investor to invest in TCS and INFOSYS. Reasons: 1. Largest IT Sector company in INDIA. 2. Increasing their Sales and PAT growth. 3. Debt to Equity Ratio are very less.
REFRENCES Books: Investment Analysis & Portfolio Management- Prasanna Chandra.
News Papers: Economic Times Websites: http://www.infosys.com/about/pages/index.aspx http://economictimes.indiatimes.com/infosys-ltd/infocompanyhistory/companyid-10960.cms http://www.indiainfoline.com/Markets/Company/Background/Company-Profile/HCLTechnologies-Ltd/532281 http://www.tata.in/company/profile.aspx?sectid=YrxJG1Zt1BU= www.rbi.org.in www.nseindia.com www.bseindia.com www.sebi.gov.in