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Project report on

Fundamental And Technical analysis of Reliance Industries Ltd.

Submitted to

Rashtrasant Tukadoji Maharaj Nagpur University

In partial fulfillment of requirement for the degree of

Master of Business Administration

Submitted by

Aditya R. Pundlik

Under the guidance of

Shri. Pravin Bagde

Department of business Management

C.P. & Berar Education societys college

Ravinagar, Nagpur

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2009 - 2010

CERTIFICATE

This is to certify that Mr. Aditya R. Pundlikis a bonafide student ofDepartment of business

Management, C.P & Berar E.S. College, Nagpur and studying in M.B.A. Part II and has

completed this project title Fundamental and Technical analysis of Reliance Industries

Ltd. under my complete Guidance and supervision.

This project report is submitted to RTM Nagpur University in partial fulfillment

of academic requirement for the degree of master of business administration during the

academic year 2009-2010.

I find the work, comprehensive, complete and of sufficiently high

standard to warrant its presentation.

Guide

Shri. Pravin Bagde

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Declaration

I have carried out the work presented in this project report titled Fundamental And

Technical analysis of Reliance Industries Ltd. under the guidance of Shri. Pravin Bagde,

lecturer, Department of business management during the academic year 2009 -2010.

This work is has not been submitted for any other examination conducted by RTM Nagpur

university or for any other purpose.

Date:

Place: Mr. Aditya R. Pundlik

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ACKNOWLEDGEMENT

I take this opportunity to convey my gratitude to those who provided me help during

the course of my study.

It is indeed a great pleasure to express sincere thanks and great sense of gratitude of

Shri. Pravin Bagde for his invaluable guidance, timely help and suggestions and constant

encouragement during my project work.

Date: Aditya R. Pundlik

Place: Nagpur

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INDEX

Sr no. Chapters Page no.

1. Objective of study 6

2. Scope of study 7

3. Hypothesis 84. Research Methodology 9

5. Introduction 10-40

6. Data Interpretation and Analysis 41-52

7. Hypothesis Testing 53-55

8. Conclusion 569 Limitation 57

10. Bibliography 58

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OBJECTIVE OF STUDY

1. To study Reliance Industries Ltd.

2. To study Technical Analysis of Reliance Industries Ltd.

3. To study Fundamental Analysis of Reliance Industries Ltd.

4. To find the future value of share Reliance Industries Ltd.

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Scope of Study

Under the title Fundamental And Technical Analysis of Reliance Industries Ltd. study

mainly concentrates on the comparative performance with special emphasis of financial

aspects. The study which concern the analysis of financial statement as they reflect the total

financial result of share of reliance industries and depict the financial performance.

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Hypothesis

Hypothesis 1: (Technical Analysis)

H0 (Null Hypothesis):-

1) The share price of a share of Reliance Industries Ltd. will touch 963.33 or will go beyond

that.

H1 (Alternate Hypothesis)-

2) The share price of a share of Reliance Industries Ltd. will touch 963.33 or will remain below

that.8

Hypothesis 2: (Fundamental Analysis)

H0 (Null Hypothesis):

1) If the elements like Economy, Industry & Company itself are performing positive then the

share prices go up.

H1 (Alternate Hypothesis)

2) If the elements like Economy, Industry, Company itself are performing negative then the

share prices go down.

The accuracy of the result will be dependent of variance accuracy.

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RESEARCH METHODOLOGY:-

Research can be defined as systemized effort to gain new knowledge. A research is carried out

by different methodologies which have their own pros and cons. Research methodology is a

way to solve research in studying and solving research problem along with logic behind them

are defined through research methodology. Thus while talking about research methodology we

are not only talking of research methods but also considered the logic behind the methods. We

are in context of our research studies and explain why it is being used a particular method or

technique and why the others are not used. So that research result is capable of being evaluated

either by researcher himself or by others.

SOURCES OF DATA COLLECTION:-

Data Collection: - Data has been collected from secondary sources as described below:

Secondary sources: - The secondary sources of data were taken from the various

websites, fund fact sheets, books, journals reports, articles etc. The information was

mainly collected from the website of the company.

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Introduction:-

The Reliance Group, founded by Dhirubhai H. Ambani, is India's largest private sectorenterprise, with businesses in the energy and materials value chain. Group's annual revenuesare in excess of $ 30 billion. The flagship company, Reliance Industries Limited, is a FortuneGlobal 500 company and is the largest private sector company in India.

Dhirubhai Ambani founded Reliance as a textile company and led its evolution as a globalleader in the materials and energy value chain businesses. It was in 1957 when he returned to

India after a stint with A.Besse& Co., Aden he started yarn trading business from a small 500sq.ft. Office in Masjid Bunder, Mumbai. He set up his brand new mill in Naroda, Gujarat. In1996 Reliance went on to become the biggest textile brand Only Vimal. In 1977 the RelianceTextile Industries came with an IPO which was oversubscribed seven times.

Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fiberproducer in the world and among the top five to ten producers in the world in majorpetrochemical products.

Starting as a small textile company, Reliance has in its journey crossed several milestones tobecome a Fortune 500 company in less than 3 decades.

Reliance Industries Limited operates world-class manufacturing facilities across the country atAllahabad, Barabanki, Dahej, Dhenkanal, Hazira, Hoshiarpur, Jamnagar, Kurkumbh,

Nagothane, Nagpur, Naroda, Patalganga, Silvassa and Vadodara.

Allahabad Manufacturing Division located in Allahabad, Uttar Pradesh, is spread over 105acres. It is equipped with polymerization and continuous polymerization facilities.

Barabanki Manufacturing Division located near Lucknow, Uttar Pradesh, is spread over 106acres. It manufactures Black Fiber.

Dahej Manufacturing Division located near Bharuch, Gujarat, is spread over 1,778 acres. Itcomprises of an ethane / propane recovery unit, a gas cracker, a caustic chlorine plant and 4downstream plants, which manufacture polymers and fiber intermediates.

Dhenkanal Manufacturing Division located in Baulpur, Orissa, is spread over 227 acres. Itmanufactures polyester staple fiber.

Hoshiarpur Manufacturing Division located in Hoshiarpur, Punjab, is spread over 69 acres.It manufactures a wide range of PSF, PFF, POY and polyester chips.

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Hazira Manufacturing Division located near Surat, Gujarat, is spread over 700 acres. Itcomprises of a Naptha cracker feeding downstream fiber intermediates, plastics and polyester

plants.

Jamnagar Manufacturing Division located in Jamnagar, Gujarat, is spread over 7,400 acres.

It comprises of a petroleum refinery and associated petrochemical plants. The refinery isequipped to refine various types of crude oil (sour crude, sweet crude or a mixture of both) andmanufactures various grades of fuel from motor gasoline to Aviation Turbine Fuel (ATF). The

petrochemicals plant produces plastics and fiber intermediates.

Kurkumbh Manufacturing Division located near Pune, Maharashtra, is spread over 34 acres.It manufactures fiber intermediates.

Nagothane Manufacturing Division located in Raigad, Maharashtra, is spread over 1,860acres. It comprises of an ethane and propane gas cracker and five downstream plants for the

manufacture of polymers, fiber intermediates and chemicals.Nagpur Manufacturing Division located in Nagpur, Maharashtra, is spread over 368 acres. Itmanufactures polyester filament yarn, dope-dyed specialty products of different ranges, fullydrawn yarn and polyester chips.

Naroda Manufacturing Division located near Ahmadabad, Gujarat, is RILs firstmanufacturing facility and is spread over 150 acres. This synthetic textiles and fabricsmanufacturing facility manufactures and markets woven and knitted fabrics for home textiles,synthetic and worsted suiting and shirting, ready to wear garments and automotive fabrics.

Patalganga Manufacturing Division located near Mumbai, Maharashtra, is spread over 200acres. It comprises of polyester, fiber intermediates and linear alkyl benzene manufacturingplants.

Silvasa Manufacturing Division located in the Union Territory of Dadra and Nagar Haveli, isspread over 127 acres. It manufactures a wide range of specialty products such as RecronStretch, Linen Like, Melange, Thick-n-thin and Bi-shrinkage yarns.

Vadodara Manufacturing Division located in Vadodara, Gujarat, is spread over 1,263 acres.It comprises of a Naptha cracker and 15 downstream plants for the manufacture of polymers,fibers, fiber intermediates and chemicals.

The company works under different business segments:

Exploration and Production

Petroleum Refining and Marketing

Petrochemicals

Textiles

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Retail

Products and brands offered by the company:

Crude oil and natural gas

LPG

Propylene

Naphtha

Gasoline

Jet/Aviation Turbine Fuel

Superior Kerosene Oil

High Speed Diesel

Sulphur

Petroleum Coke

Polypropylene

High Density Polyethylene

Low Density Polyethylene

Linear Low Density Polyethylene

Polyvinyl Chloride

Poly Olefin

Furnishing fabrics

Day curtains

Automotive upholstery

Suitings

Ready-to-stitch

Take away fabric

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Fleet management services

Highway hospitality services

Vehicle care services

Linear Alkyl Benzene

Paraxylene

Purified Terephthalic Acid

Mono Ethylene Glycol

Staple Fiber

Filament Yarn

Texturised yarn

Twisted yarn

Moisture management yarn

Quality certified sleep products

Polyethylene terephthalate

Subsidiaries:

Reliance Petroleum Limited

Reliance Netherlands B.V.

Reliance Retail Limited

Reliance Jamnagar Infrastructure Limited

Reliance Haryana SEZ Limited

Reliance Industrial Investment and Holdings Limited

Reliance Ventures Limited

Reliance Strategic Investments Limited

Reliance Exploration and Production DMCC

Reliance Industries (Middle East) DMCC

Reliance Global Management Services Limited

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Reliance Commercial Associates Limited

RIL (Australia) Pty Ltd

Recron (Malaysia) Sdn Bhd

Gulf African Petroleum Corporation (Mauritius)

GAPCO Tanzania Limited

GAP Oil Tanzania Limited

GAPCO Kenya Limited

Tran energy Kenya Limited

GAPCO Uganda Limited

GAPCO Rwanda Sarl

GAP Oil (Zanzibar) Limited

Reliance Fresh Limited

Retail Concepts and Services (India) Limited

Reliance Retail Insurance Broking Limited

Reliance Dairy Foods Limited

Reliance Retail Finance Limited

RESQ Limited

Reliance digital Retail Limited

Reliance Financial Distribution and Advisory Services Limited

Reliance Hyper mart Limited

Reliance Retail Travel & Forex Services Limited

Reliance Brands Limited

Reliance Wellness Limited

Reliance Footprint Limited

Reliance Integrated Agri Solutions Limited

Reliance Trends Limited

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Reliance Lifestyle Holdings Limited

Reliance Universal Ventures Limited

Reliance AutoZone Limited

Strategic Manpower Solutions Limited

Reliance Gems and Jewels Limited

Delight Proteins Limited

Reliance F&B Services Limited

Reliance Agri Products Distribution Limited

Reliance Leisures Limited

Reliance Retail Securities and Broking Company Limited

Reliance Home Store Limited

Reliance Trade Services Centre Limited

Reliance Food Processing Solutions Limited

Reliance Supply Chain Solutions Limited

Reliance Loyalty and Analylitics Limited

Reliance Digital Media Limited

Reliance-Grand Optical Private Limited

Reliance Vantage Retail Limited

Reliance People Serve Limited

Reliance Infrastructure Management Services Limited

Reliance International Exploration and Production, Inc

Reliance Petro investments Limited

Reliance Universal Commercial Limited

Reliance Global Commercial Limited

Wave Land Developers Limited

Reliance Cyprus Limited

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Reliance Global Business B.V.

Reliance Global Energy Services Limited

Reliance Gas Corporation Limited

Reliance Global Energy Services (Singapore) Pte. Ltd

Reliance Polymers (India) Limited

Reliance Polyolefins Private Limited

Reliance Aromatics & Petrochemicals Private Limited

Reliance Energy and Project Development Private Limited

Reliance Chemicals Private Limited

Reliance Universal Enterprises Private Limited

Reliance One Enterprises Limited

Reliance Personal Electronics Limited

International Oil Trading Limited

Reliance Review Cinema Private Limited

Reliance Replay Gaming Private Limited

Reliance Nutritional Food Processors Private Limited

Reliance Commercial Land & Infrastructure Private Limited

Reliance Eminent Trading & Commercial Private Limited

Reliance Progressive Traders Private Limited

Reliance Prolific Traders Private Limited

Reliance Universal Traders Private Limited

Reliance Prolific Commercial Private Limited

Reliance Comtrade Private Limited

Reliance Ambit Trade Private Limited

Reliance Corporate IT Park Limited

Reliance Petro Marketing Private Limited

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LPG Infrastructure (India) Private Limited

Reliance Info solution Private Limited

RIL USA Inc.

Financial Milestones

2008 - Revenue crossed Rs. 130,000 crore mark (Rs. 139,269 crore, US$ 34.7 billion), NetProfit crossed Rs. 15,000 crore mark (Rs. 19,458 crore, US$ 4.9 billion) and Total Assetscrossed Rs. 140,000 crore mark (Rs. 149,839crore, US$ 37.3 billion), unparalleled in theIndian Private sector.

Exports crossed Rs. 80,000 crore mark (Rs. 83,492 crore, US$ 20.8 billion), 13.4% of India'stotal exports.

RIL declares Dividend of 130%. Payout of Rs 1,631 Crore, highest in the Indian PrivateSector.

2007 - Revenue crossed Rs. 100,000 crore mark (Rs. 118,354 crore, US$ 27 billion), Net Profitcrossed Rs. 10,000 crore mark (Rs. 11,943 crore, US$ 2.75 billion) and Total Assets crossedRs. 100,000 crore mark (Rs. 117,353 crore, US$ 27 billion), unparalleled in the Indian Privatesector.

Exports crossed Rs. 60,000 crore mark (Rs. 66,627 crore, US$ 15 billion), 12% of India's totalexports.

RIL declares Dividend of 110%. Payout of Rs 1,440 Crore, highest in the Indian PrivateSector.

2006 - RIL places $300 million in US Private Placement Market. First ever Indian company toraise money through this route.

RIL declares Dividend of 100%. Payout of Rs 1,393 Crore, Highest In Private Sector.

RPL a subsidiary of RIL completes its US$ 1.2 billion Initial Public Offering of equity shareswith an overwhelming response across different classes of investors. Chevron to Purchase 5 %Stake in RPL for USD 300 Million. Option to Increase Stake to 29 %.

2005 - Launches US $ 348 Million Syndicated Term Loan Facility. Aims To Replace ExistingHigh Cost Loans.

Reliance Successfully Closes US$ 350 Million Multi Currency Term Loan.

2004 - Reliance signs EUR 116.2 million Export Credit Agency (ECA) backed Buyer's CreditFacility provided by Deutsche Bank. RIL avails an ECA cover for the first time in 22 years.

Reliance emerges as India's Greenest private sector company amongst the private sector with an overall

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rank of number two in a BT - ACNielsen ORG-MARG survey of shareholder perceptionpublished in Business Today's October issue. Reliance Industries concludes re-pricing of USD687.50 million Syndicated Term Loan facilities.

Reliance Group emerges as India's Largest Wealth Creator in the private sector for the Year

2003-04.

2003 - RIL - First Indian private sector company to record net profit of over Rs 4,000 crore inone financial year.

2002 - RIL - First Indian private sector company to record Net Profit of over Rs. 1,000 croresin one quarter.

Reliance among ten most creditworthy companies in Asia.

Reliance Completes Acquisition of IPCL.

2001 - RPL raises USD 750 million syndicated loan - deal named capital market deal of theyear by IFR Asia.

Group revenues cross Rs. 60,000 crore (Rs. 60,160 crores), Reliance becomes largest businessgroup in India.

RIL and RPL become India's two largest companies in terms of all major financial parameters.

2000 - Group profits cross Rs. 2,500 crore mark, Revenues cross Rs. 20,000 crore mark (Rs.

21,541 crores) and Total assets cross Rs. 50,000 crore (Rs. 52,094 crores).1998 - Total Assets cross Rs. 35,000 crore (Rs. 35,445 crore) and Revenues cross Rs. 14,000crore (Rs. 14,115 crore).

1997 - First corporate in Asia to issue 50 and 100 years bond in US debt market.

1996 - Reliance became the first private sector company to be rated by international creditrating agencies. S&P rated BB+, stable outlook, constrained by the Sovereign Ceiling.Moody's rated Baa3, Investment grade, constrained by the Sovereign Ceilings.

Net profit crossed the Rs.1, 000 crore mark (Rs 1,065 crores or US$ 338 million), unparalleledin the Indian Private sector.

1994 - Offered the second Euro issue of GDR.

1993 - India's largest public offering - Reliance Petroleum Issue.

Offered the first Euro Convertible bond issue

1992 - Set a record with Reliance Twin issues that received over 1 million investor

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applications.

Offered the first ever Euro Issue of Global Depository Receipts by an Indian company.

1991 - Reliance commissioned phase-I of Hazira Petrochemicals Complex - consolidated itsposition in polyesters and entered into attractive polymers business - started VCM and PVCplants.

1988 - Sales cross Rs. 1,000 crores mark (Sales for the year Rs. 1,778 crores).

1987 - Reliance commenced the Linear Alkyl Benzene (LAB) plant at Patalganga.

1986 - Reliance started PTA plant at Patalganga.

Reliance commissioned Polyester Staple Fiber (PSF) plant at Patalganga.

1985 - Total Assets cross Rs. 1,000 crores.

1977 - First IPO to the Indian Public.

Achievements/ recognition:

Corporate Ranking and Ratings:

Reliance featured in the Fortune Global 500 list of Worlds Largest Corporations for thefourth consecutive year.

Ranked 269th in 2007 having moved up 73 places from the previous year.

Featured as one of the worlds Top 200 companies in terms of Profits.

Among the top 25 climbers for two years in a row.

Featured among top 50 companies with the biggest increase in Revenues.

Ranked 26th within the refining industry.

Reliance is ranked 182nd in the FT Global 500 (up from previous years 284th rank).

Petro Fed, an apex hydrocarbon industry association, conferred the PetroFed 2007 awards inthe categories of Refinery of the Year and Exploration & Production - Company of theYear.

Brand Reliance was conferred the Bronze Award at The Buzziest Brands Awards 2008,organized by agencyfaqs!

Institute of Economic Studies conferred the Udyog Ratna award in October 2007 for

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contributions to the industry.

Chemtech Foundation conferred the Hall of Fame in February 2008 for sterling contributionsto the industry. Chemtech Foundation conferred the Outstanding Achievement - Oil Refiningfor work at the Jamnagar Manufacturing Division.

Petroleum Federation of India conferred the Refinery of the Year Award - 2007 to JamnagarManufacturing Division

Exports :

The Plastics Export Promotion Council - PLEXCOUNCIL Export Award in the category ofPlastic Polymers for the year 2006-2007 was awarded to Reliance being the largest exporter inthis category.

Health, Safety and Environment

Jamnagar Manufacturing Division was conferred the Golden Peacock Award forOccupational Health & Safety - 2007 by Institute of Directors.

Jamnagar Manufacturing Division was conferred the ICC Award for Water ResourceManagement in Chemical Industry.

Jamnagar Manufacturing Division was conferred the Good House Keeping Award fromBaroda Productivity Council.

Jamnagar Manufacturing Division was conferred the BEL-IND Award for the best scientific

paper at the 58th National Conference of Occupational Health.Naroda Manufacturing Division was conferred the Safety Award and Certificate ofAppreciation presented by Gujarat Safety Council & Directorate of Industrial Safety &Health, Gujarat State for the recognition of safety performance at the 29th State Level AnnualSafety Conference.

Dahej Manufacturing Division received BSC 5-Star rating from British Safety Council, UK.

Dhenkanal Manufacturing Division received the 2nd Prize for Longest Accident Free Periodfrom the Honble Minister of Labor, State of Orissa.

Hoshiarpur Manufacturing Division bagged the First Prize in Safety in Punjab, organized byPunjab Safety Council.

Patalganga Manufacturing Division won the Gold Medal at CASHE (Change Agents forSafety, Health and Environment) Conference. It also won the III Prize in Process.

Management category for Presentation on Safety through Design in chemical process industryin Petro safe 2007 Conference.

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Kurkumbh Manufacturing Division won the Greentech Safety Award silver trophy foroutstanding achievement in safety management in chemical sector.

Hazira Manufacturing Division received the TERI Corporate Environmental Award(Certificate of Appreciation) for PET recycling project.

Nagothane Manufacturing Division received the Shrishti G-Cube Award for Good GreenGovernance from Minister for Commerce and Industry, on World Earth Day.

Quality :

For the first time ever, globally, a petrochemical company bagged the Deming Prize for

Management Quality. The Quality Control Award for Operations Business Unit 2007 wasawarded to the Hazira Manufacturing Division for Outstanding Performance by PracticingTotal Quality Management.

QUALTECH PRIZE 2007, which recognizes extraordinary results in improvement andinnovation, was won by Hazira Manufacturing Division for its Small Group Activity Project.

Vadodara Manufacturing Divisions Polypropylene-IV (PP-IV) plant was conferred theSpheripol Process Operability Award-2006 for the highest operability rate with an on streamfactor 98.97% by M/s. BASELL, Italy.

Allahabad Manufacturing Division won the Excellent Category Award at NationalConvention of Quality Circle (NCQC) - 07.

Six-Sigma :

Lean Six sigma project on Reducing retention time of caustic soda lye tankers at Jamnagarwon the 1st prize in the national level competition held by Indian Statistical Institute (ISI).

Patalganga Manufacturing Divisions Six Sigma Project on Improve Transfer Efficiency forAutomatic winders in PFY won the 2nd Prize for Best design for Six Sigma Project inInternational Six Sigma Competition organized by IQPC (International Quality and

Productivity center).

Barabanki Manufacturing Division won the 3rd prize in All India Six Sigma case studycontest 2008 for the Case study on Reduction of waste of Plant 2 from 16% to 8%.

Hoshiarpur Manufacturing Division won the 2nd prize in Six Sigma competition at NationalLevel organized by ISI and Quality Council of India (in manufacturing category), whileDhenkanal and Barabanki Manufacturing Divisions won the 3rd prize.

Vadodara Manufacturing Divisions Six Sigma project won the 1st prize as the Best Six

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Sigma project at National level by CII.

Technology, R&D and Innovation:

Vadodara Manufacturing Divisions R&D bagged an award from Indian Institute of Chemical

Engineers for Excellence in Process / Product Development for the work on Eco friendlyProcess for Acetonitrile Recovery.

DSIR National Award for R&D Efforts in Industry (2007) was conferred on HaziraManufacturing Division for the Cycle hexane Recovery Project.

Patalganga Manufacturing Divisions Project titled Augmentation of ETP and use of biogas inFired heaters won the Best Innovative Project from CII.

Reliance bagged the Innovation Award at Tech Converge 2007 for innovative developmentsin short-cut fibers.

Hazira Manufacturing Division won the Golden Peacock Innovation Award - 2007 for itsCyclohexane Recovery Process.

Information Technology :

CIO of the Year Award for the best IT-enabled organization in India for the Year 2007.

Ones to Watch - CIO - USA Award, for figuring among the top 20 organizations fosteringexcellence in IT team.

The Skoch Challenger Award conferred for the best IT Head (managing the most IT enabledorganization) of the Year 2007.

Best IT Implementation Award, by PC Quest for Knowledge Management Systems portal(KMS).

CIO Excellence Award for Chemical Industry Information Technology Forum for exemplaryInformation Technology implementation amongst global chemical companies.

CTO Forum Hall of Fame Award for the best CIOs in India for not only providing service totheir organizations, but also serving as idols.

Social Initiatives :

Hazira Manufacturing Division won the Golden Peacock Global Award for Corporate SocialResponsibility - 2008.

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Products:-

Product Name YearMont

h

Sales

Quantity

Sales

Value(Rs.Million

)

% of STO

Others (Aggregate

Sales Amount of

Above Products)

2009 03 0.00 1462681.10 99.96

Refining Oil 2009 03 0.00 0.00 0.00

Ethylene 2009 03 0.00 0.00 0.00

Propylene 2009 03 0.00 0.00 0.00

Benzene 2009 03 0.00 0.00 0.00

Toluene 2009 03 0.00 0.00 0.00

Xylene 2009 03 0.00 0.00 0.00

Hydro Cynic Acid 2009 03 0.00 0.00 0.00

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Ethane Propane

Mix2009 03 0.00 0.00 0.00

Caustic Soda

Lye/Flakes 2009 03 0.00 0.00 0.00

Chlorine 2009 03 0.00 0.00 0.00

Acrylonitrile 2009 03 0.00 0.00 0.00

Linear AlkylBenzene

2009 03 0.00 0.00 0.00

Butadine & Other

C4s2009 03 0.00 0.00 0.00

Cyclohexane 2009 03 0.00 0.00 0.00

Paraxylene 2009 03 0.00 0.00 0.00

Orthoxylene 2009 03 0.00 0.00 0.00

Toluole 2009 03 0.00 0.00 0.00

Poly Vinyl Chloride 2009 03 0.00 0.00 0.00

High/Linear Low

Density Poly

Ethylene

2009 03 0.00 0.00 0.00

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High Density

Polyethylene Pipes2009 03 0.00 0.00 0.00

Poly Butadiene

Rubber 2009 03 0.00 0.00 0.00

Polypropylene 2009 03 0.00 0.00 0.00

Mono Ethylene

Glycol2009 03 0.00 0.00 0.00

Higher Ethylene

Glycol2009 03 0.00 0.00 0.00

Ethylene Oxide 2009 03 0.00 0.00 0.00

Purified

Terephthalic Acid2009 03 0.00 0.00 0.00

Polyester Filament

Yarn/Polyester

Chips

2009 03 0.00 0.00 0.00

Polyester Staple

Fibre/ Acrylic

Fibre/Chips

2009 03 0.00 0.00 0.00

Poly Ethylene

Terephthalate2009 03 0.00 0.00 0.00

Polyester Staple

Fiber Fill2009 03 0.00 0.00 0.00

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Man-Made Fiber

Spun Yarn on

Worsted System

2009 03 0.00 0.00 0.00

Man-Made fiber on

Cotton System2009 03 0.00 0.00 0.00

Man-made Fabrics 2009 03 0.00 0.00 0.00

Knitting M/C 2009 03 0.00 0.00 0.00

Solar Photovoltaic

Modules2009 03 0.00 0.00 0.00

Gas 2009 03 0.00 0.00 0.00

Petroleum Products 2009 03 0.00 0.00 0.00

Polyethylene 2009 03 0.00 0.00 0.00

Ethylene Glycol 2009 03 0.00 0.00 0.00

Fabrics 2009 03 0.00 0.00 0.00

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Executives of the company

S.No Name Designation

1 Mukesh D Ambani Chairman

2 Vinod M Ambani Company Secretary

3 Nikhil R Meswani Executive Director

4 Hital R Meswani Executive Director

5 Hardev Singh Kohli Executive Director

6 P M S Prasad Executive Director

7 Ramniklal H Ambani Non Executive Director

8 Mansingh L Bhakta Non Executive Director

9 Yogendra P Trivedi Non Executive Director

10 Dr Dharam Vir Kapur Non Executive Director

11 Mahesh P. Modi Non Executive Director

12 S Venkitaramanan Non Executive Director

13 Prof Ashok Misra Non Executive Director

14 Prof Dipak C. Jain Non Executive Director

15 Dr Raghunath A. Mashelkar Non Executive Director

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Technical Analysis: Introduction

The method used to analyze securities and make investment decisions fall into two very broad

categories: fundamentalanalysis 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

movements in the market.

Despite all the fancy and exotic tools it

employs, technical analysis really just studies supply and demand in a market in an attempt to

determine what direction, ortrend, will continue in the future. In other words, technical

analysis attempts to understand the emotions in the market by studying the market itself, as

opposed to its components.

Technical Analysis: The Basic Assumptions

Just as there are many investment styles on the fundamental side, there are also many different

types of technical traders. Some rely on chart patterns; others use technicalindicators and

oscillators, and most use some combination of the two. In any case, technical analysts'

exclusive use of historical price and volume data is what separates them from their

29
http://www.investopedia.com/terms/f/fundamentalanalysis.asphttp://www.investopedia.com/terms/f/fundamentalanalysis.asphttp://www.investopedia.com/terms/f/fundamentalanalysis.asphttp://www.investopedia.com/terms/t/technicalanalysis.asphttp://www.investopedia.com/terms/c/chartist.asphttp://www.investopedia.com/terms/s/supply.asphttp://www.investopedia.com/terms/t/trend.asphttp://www.investopedia.com/terms/i/indicator.asphttp://www.investopedia.com/terms/i/indicator.asphttp://www.investopedia.com/terms/o/oscillator.asphttp://www.investopedia.com/terms/t/technicalanalysis.asphttp://www.investopedia.com/terms/c/chartist.asphttp://www.investopedia.com/terms/s/supply.asphttp://www.investopedia.com/terms/t/trend.asphttp://www.investopedia.com/terms/i/indicator.asphttp://www.investopedia.com/terms/o/oscillator.asphttp://www.investopedia.com/terms/f/fundamentalanalysis.asp


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fundamental counterparts. Unlike fundamental analysts, technical analysts don't care whether a

stock isundervalued - the only thing that matters is a security's past trading data and what

information this data can provide about where the security might move in the future.

The field of technical analysis is based on three assumptions:

1. The market discounts everything.

2. Price moves in trends.

3. History tends to repeat itself.

1. The Market Discounts everything

A major criticism of technical analysis is that it only considers price movement, ignoring the

fundamental factors of the company. However, technical analysis assumes that, at any given

time, a stock's price reflects everything that has or could affect the company - including

fundamental factors. Technical analysts believe that the company's fundamentals, along with

broader economic factors and market psychology, are all priced into the stock, removing theneed to actually consider these factors separately. This only leaves the analysis of price

movement, which technical theory views as a product of the supply and demand for a

particular stock in the market.

2. Price Moves in Trends

In technical analysis, price movements are believed to follow trends. This means that after a

trend has been established, the future price movement is more likely to be in the same direction

as the trend than to be against it. Most technical trading strategies are based on this assumption.

3. History tends to repeat itself

Another important idea in technical analysis is that history tends to repeat itself, mainly in

terms of price movement. The repetitive nature of price movements is attributed to market

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psychology; in other words, market participants tend to provide a consistent reaction to similar

market stimuli over time. Technical analysis uses chart patterns to analyze market movements

and understand trends. Although many of these charts have been used for more than 100 years,

they are still believed to be relevant because they illustrate patterns in price movements that

often repeat themselves.

Technical Analysis: Fundamental vs. Technical Analysis

Technical analysis and fundamental analysis are the two main schools of thought in the

financial markets. As we've mentioned, technical analysis looks at the price movement of a

security and uses this data to predict its future price movements. Fundamental analysis, on the

other hand, looks at economic factors, known as fundamentals. Let's get into the details of how

these two approaches differ, the criticisms against technical analysis and how technical andfundamental analysis can be used together to analyze securities.

The Differences

Charts vs. Financial Statements

At the most basic level, a technical analyst approaches a security from the charts, while a

fundamental analyst starts with the financial statements.

By looking at thebalance sheet, cash flow statement and income statement, a fundamental

analyst tries to determine a company's value. In financial terms, an analyst attempts to measure

a company's intrinsic value. In this approach, investment decisions are fairly easy to make - if

the price of a stock trades below its intrinsic value, it's a good investment. Although this is an

oversimplification (fundamental analysis goes beyond just the financial statements) for the

purposes of this tutorial, this simple tenet holds true.

Technical traders, on the other hand, believe there is no reason to analyze a company's

fundamentals because these are all accounted for in the stock's price. Technicians believe that

all the information they need about a stock can be found in its charts.

Time Horizon

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Fundamental analysis takes a relatively long-term approach to analyzing the market compared

to technical analysis. While technical analysis can be used on a timeframe of weeks, days or

even minutes, fundamental analysis often looks at data over a number of years.

The different timeframes that these two approaches use is a result of the nature of the investing

style to which they each adhere. It can take a long time for a company's value to be reflected in

the market, so when a fundamental analyst estimates intrinsic value, a gain is not realized until

the stock's market price rises to its "correct" value. This type of investing is called value

investing and assumes that the short-term market is wrong, but that the price of a particular

stock will correct itself over the long run. This "long run" can represent a timeframe of as long

as several years, in some cases.

Furthermore, the numbers that a fundamentalist analyzes are only released over long periods of

time. Financial statements are filed quarterly and changes in earnings per share don't emerge

on a daily basis like price and volume information. Also remember that fundamentals are the

actual characteristics of abusiness. New management can't implement sweeping changes

overnight and it takes time to create new products, marketing campaigns, supply chains, etc.

Part of the reason that fundamental analysts use a long-term timeframe, therefore, is because

the data they use to analyze a stock is generated much more slowly than the price and volume

data used by technical analysts.

Trading Versus Investing

Not only is technical analysis more short term in nature that fundamental analysis, but the

goals of a purchase (or sale) of a stock are usually different for each approach. In general,

technical analysis is used for a trade, whereas fundamental analysis is used to make an

investment. Investors buy assets they believe can increase in value, while traders buy assets

they believe they can sell to somebody else at a greater price. The line between a trade and aninvestment can be blurry, but it does characterize a difference between the two schools.

The Critics

Some critics see technical analysis as a form of black magic. Don't be surprised to see them

question the validity of the discipline to the point where they mock its supporters. In fact,

technical analysis has only recently begun to enjoy some mainstream credibility. While most

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analysts on Wall Street focus on the fundamental side, just about any major brokerage now

employs technical analysts as well.

Much of the criticism of technical analysis has its roots in academic theory - specifically the

efficient market hypothesis (EMH). This theory says that the market's price is always the

correct one - any past trading information is already reflected in the price of the stock and,

therefore, any analysis to find undervalued securities is useless.

There are three versions of EMH. In the first, called weak form efficiency, all past price

information is already included in the current price. According to weak form efficiency,

technical analysis can't predict future movements because all past information has already been

accounted for and, therefore, analyzing the stocks past price movements will provide no

insight into its future movements. In the second, semi-strong form efficiency, fundamentalanalysis is also claimed to be of little use in finding investment opportunities. The third is

strong form efficiency, which states that all information in the market is accounted for in a

stock's price and neither technical nor fundamental analysis can provide investors with an

edge. The vast majority of academics believe in at least the weak version of EMH, therefore,

from their point of view, if technical analysis works, market efficiency will be called into

question.

There is no right answer as to who is correct. There are arguments to be made on both sides

and, therefore, it's up to you to do the homework and determine your own philosophy.

Can They Co-Exist?

Although technical analysis and fundamental analysis are seen by many as polar opposites - the

oil and water of investing - many market participants have experienced great success by

combining the two. For example, some fundamental analysts use technical analysis techniques

to figure out the best time to enter into an undervalued security. Oftentimes, this situation

occurs when the security is severely oversold. By timing entry into a security, the gains on the

investment can be greatly improved.

Alternatively, some technical traders might look at fundamentals to add strength to a technical

signal. For example, if a sell signal is given through technical patterns and indicators, a

technical trader might look to reaffirm his or her decision by looking at some key fundamental

data. Oftentimes, having both the fundamental and technical on your side can provide the best-

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case scenario for a trade.

While mixing some of the components of technical and fundamental analysis is not well

received by the most devoted groups in each school, there are certainly benefits to at least

understanding both schools of thought.

Technical Analysis: The Use Of Trend

One of the most important concepts in technical analysis is that of trend. The meaning in

finance isn't all that different from the general definition of the term - a trend is really

nothing more than the general direction in which a security or market is headed. Take a look

at the chart below:

Figure 1

It isn't hard to see that the trend in Figure 1 is up. However, it's not always this easy to see a

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trend:

Figure 2

There are lots of ups and downs in this chart, but there isn't a clear indication of which

direction this security is headed.

A More Formal Definition

Unfortunately, trends are not always easy to see. In other words, defining a trend goes well

beyond the obvious. In any given chart, you will probably notice that prices do not tend to

move in a straight line in any direction, but rather in a series of highs and lows. In technical

analysis, it is the movement of the highs and lows that constitutes a trend. For example,

an uptrend is classified as a series of higher highs and higher lows, while a downtrend is

one of lower lows and lower highs.

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Figure 3

Figure 3 is an example of an uptrend. Point 2 in the chart is the first high, which is

determined after the price falls from this point. Point 3 is the low that is established as the

price falls from the high. For this to remain an uptrend, each successive low must not fall

below the previous lowest point or the trend is deemed a reversal.

The Importance of Trend

It is important to be able to understand and identify trends so that you can trade with ratherthan against them. Two important sayings in technical analysis are "the trend is your friend"

and "don't buck the trend," illustrating how important trend analysis is for technical traders.

Technical Analysis: Support And Resistance

Once you understand the concept of a trend, the next major concept is that of support and

resistance. You'll often hear technical analysts talk about the ongoing battle between

thebulls and the bears, or the struggle between buyers (demand) and sellers (supply). This isrevealed by the prices a security seldom moves above (resistance) or below (support).

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Figure 1

As you can see in Figure 1, support is the price level through which a stock or market

seldom falls (illustrated by the blue arrows). Resistance, on the other hand, is the price level

that a stock or market seldom surpasses (illustrated by the red arrows).

Why Does it Happen?

These support and resistance levels are seen as important in terms of market psychology and

supply and demand. Support and resistance levels are the levels at which a lot of traders are

willing to buy the stock (in the case of a support) or sell it (in the case of resistance). When

these trend lines are broken, the supply and demand and the psychology behind the stock's

movements is thought to have shifted, in which case new levels of support and resistance

will likely be established.

Round Numbers and Support and Resistance

One type of universal support and resistance that tends to be seen across a large number of

securities is round numbers. Round numbers like 10, 20, 35, 50, 100 and 1,000 tend be

important in support and resistance levels because they often represent the major

psychological turning points at which many traders will make buy or sell decisions.

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Buyers will often purchase large amounts of stock once the price starts to fall toward a major

round number such as $50, which makes it more difficult for shares to fall below the level.

On the other hand, sellers start to sell off a stock as it moves toward a round number peak,

making it difficult to move past this upper level as well. It is the increased buying andselling pressure at these levels that makes them important points of support and resistance

and, in many cases, major psychological points as well.

Role Reversal

Once a resistance or support level is broken, its role is reversed. If the price falls below a

support level, that level will become resistance. If the price rises above a resistance level, it

will often become support. As the price moves past a level of support or resistance, it is

thought that supply and demand has shifted, causing the breached level to reverse its role.

For a true reversal to occur, however, it is important that the price make a strong move

through either the support or resistance. (For further reading, seeRetracement Or Reversal:

Know The Difference.)

Figure 2

For example, as you can see in Figure 2, the dotted line is shown as a level of resistance that

has prevented the price from heading higher on two previous occasions (Points 1 and 2).

However, once the resistance is broken, it becomes a level of support (shown by Points 3

and 4) by propping up the price and preventing it from heading lower again.

Many traders who begin using technical analysis find this concept hard to believe and don't

realize that this phenomenon occurs rather frequently, even with some of the most well-

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known companies. For example, as you can see in Figure 3, this phenomenon is evident on

the Wal-Mart Stores Inc. (WMT) chart between 2003 and 2006. Notice how the role of the

$51 level changes from a strong level of support to a level of resistance.

Figure 3

In almost every case, a stock will have both a level of support and a level of resistance andwill trade in this range as it bounces between these levels. This is most often seen when a

stock is trading in a generally sideways manner as the price moves through successive peaks

and troughs, testing resistance and support.

The Importance of Support and Resistance

Support and resistance analysis is an important part of trends because it can be used to make

trading decisions and identify when a trend is reversing. For example, if a trader identifies animportant level of resistance that has been tested several times but never broken, he or she

may decide to take profits as the security moves toward this point because it is unlikely that

it will move past this level.

Support and resistance levels both test and confirm trends and need to be monitored by

anyone who uses technical analysis. As long as the price of the share remains between these

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levels of support and resistance, the trend is likely to continue. It is important to note,

however, that a break beyond a level of support or resistance does not always have to be a

reversal. For example, if prices moved above the resistance levels of an upward trending

channel, the trend have accelerated, not reversed. This means that the price appreciation is

expected to be faster than it was in the channel.

Technical Analysis:

The Importance Of Volume

To this point, we've only discussed the price of a security. While price is the primary item of

concern in technical analysis, volume is also extremely important.

What is Volume?

Volume is simply the number of shares or contracts that trade over a given period of time,

usually a day. The higher the volume, the more active the security. To determine the movement

of the volume (up or down), chartists look at the volume bars that can usually be found at the

bottom of any chart. Volume bars illustrate how many shares have traded per period and show

trends in the same way that prices do. (For further reading, see Price Patterns - Part 3, Gauging

Support And Resistance With Price By Volume.)

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Why Volume is Important

Volume is an important aspect of technical analysis because it is used to confirm trends andchart patterns. Any price movement up or down with relatively high volume is seen as a

stronger, more relevant move than a similar move with weak volume. Therefore, if you are

looking at a large price movement, you should also examine the volume to see whether it tells

the same story.

Say, for example, that a stock jumps 5% in one trading day after being in a long downtrend. Is

this a sign of a trend reversal? This is where volume helps traders. If volume is high during the

day relative to the average daily volume, it is a sign that the reversal is probably for real. On

the other hand, if the volume is below average, there may not be enough conviction to support

a true trend reversal. (To read more, check out Trading Volume - Crowd Psychology.)

Volume should move with the trend. If prices are moving in an upward trend, volume should

increase (and vice versa). If the previous relationship between volume and price movements

starts to deteriorate, it is usually a sign of weakness in the trend. For example, if the stock is in

an uptrend but the up trading days are marked with lower volume, it is a sign that the trend isstarting to lose its legs and may soon end.

When volume tells a different story, it is a case ofdivergence, which refers to a contradiction

between two different indicators. The simplest example of divergence is a clear upward trend

on declining volume. (For additional insight, read Divergences, Momentum And Rate Of

Change.)

Volume and Chart Patterns

The other use of volume is to confirm chart patterns. Patterns such as head and shoulders,

triangles, flags and other price patterns can be confirmed with volume, a process which we'll

describe in more detail later in this tutorial. In most chart patterns, there are several pivotal

points that are vital to what the chart is able to convey to chartists. Basically, if the volume is

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not there to confirm the pivotal moments of a chart pattern, the quality of the signal formed by

the pattern is weekend.

Fundamental analysis Introduction:

Fundamental analysis determines the worth of a business by its future

expected earnings potential. The future expected earnings potential of a business depends on

such fundamental factors as quality of companys management, business outlook for thecompany & the industry in which the company operates in. the analysis entails studying and

estimating the variables, which are perceived to be related to the expected future returns from a

company. A fundamental analyst would forecast the companys future financial performance

and use an appropriate required rate of return to discount the future returns from the company

to find an intrinsic value of the company as of the present moment. To understand the

business of a company, it is important to understand the industry and the economic

environment it operates in.

This analysis would also help in studying and judging the strategic

choices made by the company to understand its prospects for success in competition with other

companies in the industry. Having analyzed industry prospects and competitive corporate strategy, a

fundamental analyst would then integrate these with financial statement analysis to project

companys financials, into the future.

Understanding the Economic Environment

Analyzing the Industry

Assessing the projected performance of the Company

(One must hone the skill needed for the above)

Economic Environment

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Global economic scenario

Central Government Policy

Key Variables

Growth rate of GDP

Industrial Growth rate,

Agriculture and Monsoon,

Savings and investments,

Price level and inflation,

Interest rates

Infrastructure facilities

Industry analysis

Analyze the prospects of each industry

Difficult to forecast the future

Consists of 4 parts

Sensitivity to the business cycle

Industry life cycle analysis

Structure and characteristics

Profit Potential of the industry

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DATA INTERPRETATION

AND ANALYSIS

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About India economic analysis

India economic analysis provides various inputs on economic condition of this south-eastAsian country. It can be done both at a microeconomic as well as a macroeconomic level. Indiaeconomic analysis could also be described as being an explanation of various economic

phenomena going on in this country.

Recent macroeconomic developments in India

In April 2008, industrial sector in India had recorded a growth of 7 percent. However, thisfigure is lesser than 11 percent development, which had been achieved in April 2007. Much ofthis critical condition could be attributed to an increase in prices of oil. Measures that have

been taken by Reserve Bankof India, like upward revision of repo rate and CRR, have alsocontributed to decrease in industrial production.

Manufacturing and electric sector have suffered as well in recent times. Their growth rateshave come down too. For manufacturing sector it was 7.5 percent and for electricity sector, rateof development stood at 1.4 percent in April 2008. This rate is significantly low whencompared to statistics of April 2007, when rates of development for manufacturing andelectricity were 12.4 percent and 8.7 percent respectively.

In case of manufacturing sector much of this slump could be attributed to increase in inputcosts like expenses of oil, raw materials, rates of interest and prices of goods and services.Mining sector has been comparatively better off as it has managed to grow at a rate of 8

percent in April 2008 compared to 2.6 percent that was achieved in April 2007.

In core infrastructural industries, there has been deceleration as well, but it is still better off

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compared to non infrastructural industries in India. Growth in April 2008 has been around 3.6percent, which is less than 5.9 percent achieved in April 2007. Industries like crude oilproduction, electricity and petroleum refinery have been performing below expectations butcoal, finished steel and cement have performed better than April 2007.

Inflation in India

In financial year 2007-08, average inflation in India was around 4.66 percent. This rate waslower than average inflation of financial year 2006-07. In 2007-08, fiscal high prices of fooditems were primary cause behind high rates of inflation. That high rate of inflation had to becontrolled by banning a number of necessary commodities as well as various financial steps.

High prices of oil were responsible for proportionately high rate of sinflation in 2008-09

The President of India released the Economic Survey 2009 in the parliament, and it has evoked

mixed reaction. In this report we will bring you some of the important numbers and charts that

will are important to India from the point of view of Economic growth. Before we go into

numbers let us look at the key points that came out the of the Economic Report 2009 released

yesterday. Bear in mind that Monday is the Budget day and quite a few people are looking at

it as a Landmark Budget and probably a game changer for India from economic reforms

perspective. Based on my understanding, the Economic survey points towards disinvestment

and heavy tax reforms, which is a great sign and a need of the hour. Even the Indian stock

Market has been range-bound over last week and just waiting in the wings for budget to be

announced.

So here are some of the key points that have been suggested by the India Economy

Survey 2009.

Economy can grow around 7 percent in 2009/10. This off course, is largely dependenton how the US Economy recovers over next few months. If US economy bottoms out

around December, as many analysts are expecting, India can easily look at 7% upwards

growth.

The Economy will get back to its growth path of around 9% in medium term.

The government has shown its eagerness for Fiscal consolidation. The Fiscal deficit

target is suggested to be set at 3 percent of GDP at the earliest.

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Inflation is suggested to be a non-issue moving forward.

The Economic Survey suggested allowing the public to hold greater equity in public

sector banks and aligning of voting rights in banks with equity holdings.

Calibrated monetary policy approach is suggested for early return to high growth path.

The Economic Survey has suggested that quality Foreign Direct Investment should be

allowed to seek regulatory reforms in higher education.

I for one am having very high expectations from this years budget and now with the economicsurvey 2009, my hopes are bolstered. Having won a resounding victory in the Indian elections,we predicted that Prime Minister Manmohan Singh would enact sweeping reforms

Industry Analysis:-

Growth is Life The policy announced by RBI governor Dr YV Reddy is really laudable interms of the reforms agenda being outlined by the central bank. There are various newinitiatives under consideration by the RBI, mainly short selling in bonds, when issued marketsfor primary auctions, primary dealership underwriting procedure, interest rate options etc. The

governor has clearly outlined his mind in the policy in terms of the risks to the system and theimpact of external factors.

He has advised caution on inflation front from external shocks like oil prices. He has alsospoken of vigil on interest rates and the need to prepare markets and provide them with thetools for it. He has also emphasized on the need to enhance liquidity in the markets.

We feel that the market will be happy if some of the initiatives mentioned in the policy wereintroduced soon.

The RBIs move towards a system of quarterly review of monetary situation is also welcomeas it helps the market in knowing the central banks mind in a rapidly changing environment.

There is a bit of disappointment in the bond market in terms of a small hike of 25 bps inreverse repo rate to 5%, but we think it was pragmatic on the central banks part to rein ininflationary expectations. However, as the bank rate is unchanged and the fact that RBI iscommitted to providing liquidity to meet credit demand, we think it is unlikely to put too much

pressure on lending rates.

Reliance Petroleum Third Quarter results declared

Sales of Rs. 25,497 crores - an increase of 9% NetProfit of Rs. 1,269 crores - an increase of 18%Achieved 107% Capacity Utilization Exports of

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Rs. 6,001 crores - Highest in the Indian Corporatesector

RIL has recorded 14 consecutive years of consistent profit growth, through business cycles

Consistent Track Record of Long Term GrowthCAGR %Since 1977 10 Years 5 yearsTurnover 30% 32% 37%

Net Profit 32% 29% 20%Cash profit 33% 29% 26%Total Assets 34% 26% 21%Market Cap 37% 24% 19%EPS 19% 16% 11%

Reliances Financial StrengthReliances total assets have grown from US$ 1.9 billion toUS$ 13.42 billion over the last 10 yearsThis has been achieved with the debt: equity ratio being broughtdown from 0.84 to 0.6 in the same period, indicating financial conservatism of a high degreeReliance has consistently maintained its AAA credit ratings, indicating the companysfinancial strength and flexibilityReliances cash flows at current levels for less than 2 years are adequate to extinguish its

entire net debtThe scale of Reliances operations enables the company to take up multi-billion dollar projectson the strength of its own cash flows

Company Analysis:-

Important parameters for analysis

EPS of the coming years

And a reasonable earnings multiple, given the growth prospects, risk exposure and other

characteristics of the firm

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For this we need historical data

Of Earnings, Growth, Risk and Valuation

Earnings Level

Return of Equity

Equity Earnings

Net worth

Denoting the earnings for the shareholder

Earnings analysis

ROE can be decomposed into

PAT X Sales X Asset

Sales Assets NW (SC+RS)

PBIT X Sales X PBT X PAT X Asset

Sales Assets PBIT PBT Equity

Op. eff Asset eff, int , tax, Leverage

Other important calculations

Book Value of the share

Paid up capital / number of shares

Earnings per share

PAT / number of Equity shares

Dividend Payout

Equity Dividend / PAT

Dividend per share

Growth performance of sales and EPS (CAGR)

Look out for Beta

Growth

Look at Growth: Compounded annual growth rate

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Sustainable growth rate without Loans:

= ROE X retention ratio

Where retention ratio = (PAT Dividend) / PAT

Using this model: we can estimate the stock price as

Useful for sensitivity

Intrinsic value using PE Ratio

Estimate the future EPS

Based on correct forecasting of the PAT in the future based on growth assumptions etc)

Establish a PE multiple

based on last years earnings or trailing 12 month PE

or based on some expected earnings also look out for

similar companies PE

Projected EPS X Projected PE = Value Anchor

Always give

Strategy for identifying securities

Intrinsic Value > Market Value Buy

Intrinsic Value < Market Value Sell

Intrinsic Value = Market Value Hold

Calculation of EPS (Earning s per share)

Mar 05 Mar 06 Mar 07 Mar 08 mar 09

Equity Capital 1,394.00 1,394.00 1,394.00 1,454.00 1,574.00

Equity Dividend Rate 0.00 0.00 110.00 130.00 0.00

Agg. Of Non-Prom. Shares (inLacs)

7,418.68 7,260.00 6,831.00 7,069.00 7,482.00

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Agg. Of Non Promote Holding(%)

53.24 52.10 49.02 48.63 47.54

OPM(%) 17.51 16.04 16.42 16.73 16.18

GPM(%) 17.14 15.70 15.56 16.49 16.17

NPM(%) 10.14 10.09 9.82 13.88 10.53

EPS (in Rs.) 54.32 65.06 78.25 133.82 99.35

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Year Mar 05 Mar 06 Mar 07 Mar 08 Mar 09

EquityCapital

1394.00 1394.00 1,394.00 1454.00 1574.00

Number ofshares

1.92 2.57 3.17 4.49 5.82

Book value

of shares

727.66 542.74 439.57 324.03 270.35

52

Mar 05 Mar 06 Mar 07 Mar 08 mar 09

EquityCapital

1,394.00 1,394.00 1,394.00 1,454.00 1,574.00

Net Worth 126372.97 81448.60 63967.13 49804.26 40403.32

Return onequity

1.10% 1.71% 2.17% 2.91% 3.8%


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Calculation of Value per share:-

P/E Ratio= Market value per share

Annual Earnings per share

Year Mar05 Mar06 Mar07 Mar08 Mar09

Market valueper share(MPS)

282.20 398.13 684.18 1172.55 789.33

Annual

earnings pershare (EPS)

54.32 65.06 78.25 133.82 99.35

P/E Ratio 5.195 6.119 8.744 8.762 7.945

Value (per share) = EPS P/E Ratio

Year Mar05 Mar06 Mar07 Mar08 Mar09

EPS 54.32 65.06 78.25 133.82 99.35

P/E Ratio 5.195 6.119 8.744 8.762 7.945

Value 282.19 398.10 684.22 1172.531 789.34

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Technical Analysis:- ( Calculation)

55

Year

x

price ofshare

x*x xy a b

y= a+bx y-ye y-ye^2

2001 -4 195.45 16 -781.8409.15

8110.83

5 -34.182229.63

252730.8

6

2002 -3 150.48 9 -451.44409.15

8110.83

5 76.653 73.8275450.42

6

2003 -2 140.88 4 -281.76409.15

8110.83

5187.48

8 -46.6082172.30

6

2004 -1 277.98 1 -277.98409.15

8110.83

5298.32

3 -20.343413.837

6

2005 0 282.2 0 0409.15

8110.83

5409.15

8

-126.95

816118.3

3

2006 1 398.13 1 398.13409.15

8110.83

5519.99

3

-121.86

314850.5

9

2007 2 684.18 41368.3

6409.15

8110.83

5630.82

8 53.3522846.43

6

2008 3 1172.55 93517.6

5409.15

8110.83

5741.66

3430.88

7185663.

6

2009 4 789.73 163158.9

2409.15

8110.83

5852.49

8 -62.7683939.82

2

2010 5 25 0409.15

8110.83

5963.33

3

-963.33

3928010.

5

10 0 4091.58 606650.0

8 1212197


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Dow Theory on stock price movements is a form of technical analysis that includes some

aspects of sector rotation. The theory was derived from 255 Wall Street Journal editorialswritten by Charles H. Dow (18511902),journalist, founder and first editor of the Wall StreetJournal and co-founder ofDow Jones and Company. Following Dow's death, William PeterHamilton, Robert Rhea and E. George Schaeferorganized and collectively represented "DowTheory," based on Dow's editorials. Dow himself never used the term "Dow Theory," nor

presented it as a trading system.

Six basic tenets of Dow Theory

1. The market has three movements

(1) The "main movement", primary movement or major trend may last from less than ayear to several years. It can be bullish or bearish. (2) The "medium swing", secondaryreaction or intermediate reaction may last from ten days to three months and generallyretraces from 33% to 66% of the primary price change since the previous mediumswing or start of the main movement. (3) The "short swing" or minor movement varieswith opinion from hours to a month or more. The three movements may besimultaneous, for instance, a daily minor movement in a bearish secondary reaction in a

bullish primary movement.

2. Market trends have three phasesDow Theory asserts that major market trends are composed of three phases: anaccumulation phase, a public participation phase, and a distribution phase. Theaccumulation phase (phase 1) is a period when investors "in the know" are actively

buying (selling) stock against the general opinion of the market. During this phase, thestock price does not change much because these investors are in the minority absorbing(releasing) stock that the market at large is supplying (demanding). Eventually, themarket catches on to these astute investors and a rapid price change occurs (phase 2).This occurs when trend followers and other technically oriented investors participate.This phase continues until rampant speculation occurs. At this point, the astute

investors begin to distribute their holdings to the market (phase 3).

56
http://en.wikipedia.org/wiki/Journalisthttp://en.wikipedia.org/wiki/Dow_Jones_and_Companyhttp://en.wikipedia.org/wiki/William_Peter_Hamiltonhttp://en.wikipedia.org/wiki/William_Peter_Hamiltonhttp://en.wikipedia.org/w/index.php?title=Robert_Rhea&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=E._George_Schaefer&action=edit&redlink=1http://en.wikipedia.org/wiki/Market_trendhttp://en.wikipedia.org/wiki/Journalisthttp://en.wikipedia.org/wiki/Dow_Jones_and_Companyhttp://en.wikipedia.org/wiki/William_Peter_Hamiltonhttp://en.wikipedia.org/wiki/William_Peter_Hamiltonhttp://en.wikipedia.org/w/index.php?title=Robert_Rhea&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=E._George_Schaefer&action=edit&redlink=1http://en.wikipedia.org/wiki/Market_trend


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3. The stock market discounts all news

Stock prices quickly incorporate new information as soon as it becomes available. Oncenews is released, stock prices will change to reflect this new information. On this point,

Dow Theory agrees with one of the premises of the efficient market hypothesis.

4. Stock market averages must confirm each other

In Dow's time, the US was a growing industrial power. The US had population centersbut factories were scattered throughout the country. Factories had to ship their goods tomarket, usually by rail. Dow's first stock averages were an index of industrial(manufacturing) companies and rail companies. To Dow, a bull market in industrialscould not occur unless the railway average rallied as well, usually first. According tothis logic, if manufacturers' profits are rising, it follows that they are producing more. Ifthey produce more, then they have to ship more goods to consumers. Hence, if aninvestor is looking for signs of health in manufacturers, he or she should look at the

performance of the companies that ship the output of them to market, the railroads. Thetwo averages should be moving in the same direction. When the performance of theaverages diverges, it is a warning that change is in the air.

Both Barron's Magazine and the Wall Street Journal still publish the daily performanceof the Dow Jones Transportation Index in chart form. The index contains majorrailroads, shipping companies, and air freight carriers in the US.

5. Trends are confirmed by volume

Dow believed that volume confirmed price trends. When prices move on low volume,there could be many different explanations why. An overly aggressive seller could be

present for example. But when price movements are accompanied by high volume,Dow believed this represented the "true" market view. If many participants are active ina particular security, and the price moves significantly in one direction, Dowmaintained that this was the direction in which the market anticipated continuedmovement. To him, it was a signal that a trend is developing.

6. Trends exist until definitive signals prove that they have ended

Dow believed that trends existed despite "market noise". Markets might temporarily

move in the direction opposite to the trend, but they will soon resume the prior move.The trend should be given the benefit of the doubt during these reversals. Determiningwhether a reversal is the start of a new trend or a temporary movement in the currenttrend is not easy. Dow Theorists often disagree in this determination. Technicalanalysis tools attempt to clarify this but they can be interpreted differently by differentinvestors.

57
http://en.wikipedia.org/wiki/Efficient_market_hypothesishttp://en.wikipedia.org/wiki/Barron's_Magazinehttp://en.wikipedia.org/wiki/Wall_Street_Journalhttp://en.wikipedia.org/wiki/Efficient_market_hypothesishttp://en.wikipedia.org/wiki/Barron's_Magazinehttp://en.wikipedia.org/wiki/Wall_Street_Journal


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HYPOTHESIS TESTING

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Calculation of standard deviation :-

PRICE OFSHARE X-x X-x^2

195.45

-

259.17

67169.0

9150.48

-304.14

92501.14

140.88-

313.7498432.7

9

277.98-

176.6431201.6

9

282.2-

172.4229728.6

6398.13 -56.49 3191.12

684.18 229.56

52697.7

9

1172.55 717.93515423.

5

789.73 335.11112298.

7

Mean 454.62125330.

6

S.D.354.020

6

Here T- test will be applied:-X = X/n = 4091.58/9 = 454.62

= 354.0206/8 = 44.25

= 44.25 = 6.65

X =

n= 6.65/9

= 6.65/3

= 2.22

T-test

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( X- )

X

= (454.62-6.65)

2.22

= 447.97/2.22

= 201.78

Degree of freedom:-

N= 8 years.

= 5%

Therefore it is 2.306

As the value of t is more than value of degree of freedom alternate hypothesis will be applied.

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Conclusion:-

As per the above study the fundamental analysis requires the economic, industrial and

company analysis which helps the researcher to get the real value of the share. If the intrinsicvalue is greater than market value the share should be bought and if the intrinsic value isgreater than market value the share should be sold. If the intrinsic value and market valueremains same then the share is put on hold. In the technical analysis the price movement isseen. The future value of the share can be anticipated. This study helps to analyze and dealwith performance of the share in the future.

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LIMITATIONS

Data used in project is secondary in nature.

Calculations are based on secondary data.

Other factors influencing economy are not covered in this study.

Changes in tax systems are not considered.

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Bibliography:-

1. www.moneycontrol.com2. www.bestbull.in3. Financial management by khan and Jain.4.Bseindia.com5. Financial management by Prasanna Chandra

6.Wikipidia.com

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http://www.moneycontrol.com/http://www.bestbull.in/http://www.moneycontrol.com/http://www.bestbull.in/


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adi final project

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