project on risk and return
TRANSCRIPT
8/7/2019 project on risk and return
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CHAPTER: I
INTRODUCTION
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Before 1990¶s the main area of investment were bank deposits, gold, property andsuch other forms of tangible assets but for the past few years we had beenwitnessing a lot of investment opportunities coming up in the form of primary andsecondary market since the globalization which had its inception during 90¶s foreigncapital flowing to India .new multinational entered the market and a lot of investmentopportunities were opened to the people who kept their savin g in bank and other
kind of fixed assets .
The topic analysis of risk and return in the banking, pharmaceutical, IT, oil & gas andautomobile had been selected because a lot of investors are making investment inthe shares of different companies. The inve stors have to be aware of the riskinvolved in making the investment .so the investors have to calculate the varianceand the beta value to know the present condition of the Company to know whether there is any risk in investing in the particular company a nd does the company offer good returns.The companies which I have been selected for research having different growthstrategies and difference in revenue, profitability and market capitalization.
Overall, banking in India is considered as fairly mature i n terms of supply, productrange and reach-even though reach in rural India still remains a challenge for theprivate sector and foreign banks. Even in terms of quality of assets and capitaladequacy, Indian banks are considered to have clean, strong and t ransparentbalance sheets-as compared to other banks in comparable economies in its region.The Reserve Bank of India is an autonomous body, with minimal pressure from thegovernment. The Indian pharmaceutical is one of the fast growing sector not only inIndia but also the whole world There are 74 U.S. FDA -approved manufacturingfacilities in India, more than in any other country outside the U.S, and in 2008, almost25% of all Abbreviated New Drug Applications (ANDA) to the FDA are expected tobe filed by Indian companies. Growths in other fields notwithstanding, generics arestill a large part of the picture. London research company Global Insight estimatesthat India¶s share of the global generics market will have risen from 4% to 35%in 2006, over 20,000 registered drug manufacturers in India sold $15 billion worth of formulations and bulk drugs. 85% of these formulations were sold in India while over 60% of the bulk drugs were exported, mostly to the United States and Russia. Mostof the players in the market are small-to-medium enterprises; 250 of the largestcompanies control 70% of the Indian market. Thanks to the 1970 Patent Act,multinationals represent only 35% of the market, down from 70% thirty years ago.
Indian oil and gas industry estimated to be a US$ 90 billion industry, the Indian oiland gas industry is among the largest contributors to the central and stateexchequers in India. Its share approximates US$ 13.58 billion. Most of the country's
19 refineries, barring two, with a capacity to pro cess 148.97 million tonnes per year and are run by state-run companies.The Indian software industry has grown from a mere US $ 150 million in 1991 -92 toa staggering US $ 5.7 billion (including over $4 billion worth of software exports) in1999-2000. No other Indian industry has performed so well against the globalcompetition. Today, India exports software and services to nearly 95 countriesaround the world. The share of North America (U.S. & Canada) in India¶s softwareexports is about 61 per cent. In 1999-2000, more than a third of Fortune 500companies outsourced their software requirements to India .
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The Indian automotive industry has flourished like never before in the recent years.This extra-ordinary growth that the Indian automotive industry has wi tnessed is aresult of a two major factors namely, the improvement in the living standards of themiddle class, and an increase in their disposable incomes.
The data collected is mainly secondary in nature and no questionnaire has been
formulated for the research .the data(that is the stock price and S&P CNX Niftyindex)has been collected from various websites and has been analyzed andinterpreted in order to find out the spread of return with the help of standard deviationand beta.
BACKGROUND
A company ,which has a high intrinsic worth ,is not necessarily the best stock to buy.it may have no growth prospects or it may be overpriced .similarly a company thatperforms well during any one year may not be the best to buy .on the contrary ,a
company which has been badly for sometime might have turn the corner and it maybe the best to buy ,as its shares may be under prices and it has good prospects of growth hence an analysis of risk or return guides an investor in proper profitableinvestment .