security analysis and rtfolio management

8/10/2019 Security Analysis and Rtfolio Management

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A PROJECT REPORT

ON

SECURITY ANALYSIS AND PORTFOLIO

MANAGEMENT

UNDER TAKEN AT

HYDERABAD.

Project Report Submitted In Partial Fulillment O T!e

Re"uirement# For T!e A$ard O T!e De%ree O

&ASTER OF CO&&ARCE'(

KONDA RAJAS)EKAR*Re%+No+,-,.,/.010023

Under t!e %uidance

&r+ N+ SRINI4AS SIR5

OS&ANIA UNI4ERSIT6

ST JOSEP) P7 CO88E7E5

KIN7KOTI5)6DERA'AD+

,


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Academic Year 2013-15

DEC8ARATION

I !ereb( declare t!at t!i# Project Report titled 9SECURIT6 ANA86SIS

AND PORTFO8IO &ANA7E&ENT: #ubmitted b( me to t!e Department o

'u#ine## &ana%ement5 O+U+5 )(derabad5 i# a bonaide $or; underta;en b( me

and it i# not #ubmitted to an( ot!er Uni


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OS&ANIA UNI4ERSIT6

ST JOSEP) P7 CO88E7E

KIN7KOTI5 )6DERA'AD+

CERTIFICATE

T!i# i# to certi( t!at K+RAJA S)EKAR i# a #tudent o ST JOSEP) P7

CO88E7E bearin% Roll No+ ,-,.,/.01002 !a# underta;en a project titled SECURIT6

ANA86SIS AND PORTFO8O &ANA7E&ENT at INDIA INFO8INE )6DERA'AD in

partial ulillment o !i# ma#ter in bu#ine## admini#tration cour#e+ )e !a# #ucce##ull(

completed t!e project $or; under t!e %uidance o &r+N+SRINI4AS SIR5 Principal and

acult( o Finance+

)ead o t!e Department Facult(

/


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ACKNO>8ED7E&ENT

I $ould li;e to %i


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CONTENTS

C)APTER@l INTRODUCTION

C)APTER@- CO&PAN6 PROFI8E

C)APTER@/ SECURIT6 ANA86SIS

C)APTER@. PORTFO8IO &ANA7E&ENT

C)APTER@ PORTFO8IO ANA86SIS

C)APTER@2 PRACTICA8 STUD6 OF SO&E SE8ECTED SCRIPS

C)APTER@B CONC8USION AND SU77ESTIONS

'I'I8IO7RAP)6


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O'JECTI4ES

TO STUD6 AND UNDERSTAND T)E PORTFO8IO &ANA7E&ENT

CONCEPTS+

TO STUD6 AND UNDERSTAND T)E SECURIT6 ANA86SIS CONCEPTS+

TO &EASURE T)E RISK AND RETURN OF PORTFOIO OF CO&PANIES+

TO SE8ECT AN OPTI&U& PORTFO8IO+

2


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RESEARC) &ET)ODO8O76

SECONDAR6 DATA@

Data collected rom AS A CONSTRAINT >IT) RE7ARD TO TI&E A88OCATED FOR

T)E RESEARC) STUD6+

T)E A4AI8A'I8IT6 OF INFOR&ATION IN T)E FOR& OF ANNUA8

REPORTS PRICE F8UCTUATIONS OF T)E CO&PANIES >AS A 'I7

CONSTRAINT TO T)E STUD6+

B


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C)APTER ,

INTRODUCTION

1


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)ISTOR6 OF STOCK EC)AN7E

T!e onl( #toc; e?c!an%e# operatin% in t!e ,Gt! centur( $ere t!o#e o 'omba( #et up

in ,1B and A!medabad #et up in ,1G.+ T!e#e $ere Eicient &ar;et )(pot!e#i# or%aniHed a#


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It can operate onl(5 i it i# reco%niHed b( t!e 7o


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$!erea# in


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are no #toc; e?c!an%e#5 t!e %o


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SECURITIES AND EC)AN7E 'OARD OF INDIA *SE'I3

Securitie# and E?c!an%e 'oard o India *SE'I3 #etup a# an autonomou# re%ulator(

aut!orit( b( t!e 7o


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O'JECTI4ES OF SE'I

T!e promul%ation o t!e SE'I ordinance in t!e parliament %a


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FUNCTIONS OF SE'I

Re%ulatin% t!e bu#ine## in Stoc; E?c!an%e and an( ot!er #ecuritie# mar;et+

Re%i#terin% and re%ulatin% t!e $or;in% o Stoc; 'ro;er#5 Sub@'ro;er#5 S!are Tran#er

A%ent#5 'an;er# to t!e i##ue5 Tru#tee# to tru#t deed#5 Re%i#trar# to an i##ue5 &erc!ant

'an;er#5 Under$riter#5

Portolio &ana%er#5 In


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PROFI8E OF

NATIONA8 STOCK EC)AN7E

,2


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T!e NSE@0 compri#e# 0 companie# t!at repre#ent -0 broad Indu#tr( %roup# $it! an

a%%re%ate mar;et capitaliHation o around R#+,5B05000 cr#+ All companie# included in t!e

Inde? !a


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STOCK EC)AN7ES IN INDIA

S+No NA&E OF T)E STOCK EC)AN7E 6EAR

, 'omba( Stoc; E?c!an%e ,1B

- )(derabad Stoc; E?c!an%e ,G./

/ A!medabad S!are and Stoc; 'ro;er# A##ociation ,GB

. Calcutta Stoc; E?c!an%e A##ociation 8imited ,GB

Del!i Stoc; E?c!an%e A##ociation 8imited+ ,GB

2 &adra# Stoc; E?c!an%e A##ociation 8imited+ ,GB

B Indoor Stoc; 'ro;er# A##ociation+ ,G1

1 'an%alore Stoc; E?c!an%e+ ,G2/

G Coc!in Stoc; E?c!an%e+ ,GB1

,0 Pune Stoc; E?c!an%e 8imited+ ,G1-

,, U+P Stoc; E?c!an%e A##ociation 8imited+ ,G1-

,- 8ud!iana Stoc; E?c!an%e A##ociation 8imited+ ,G1/

,/ Jaipur Stoc; E?c!an%e 8imited+ ,G1.

,. 7au!at!i Stoc; E?c!an%e 8imited+ ,G1.

, &an%alore Stoc; E?c!an%e 8imited ,G1

,2 &a%!ad Stoc; E?c!an%e 8imited5 Patna ,G12

,B '!u


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PROFI8E OF 'O&'A6 STOCK

EC)AN7E

-0


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'O&'A6 STOCK EC)AN7E

T!i# Stoc; E?c!an%e5 &umbai5 popularl( ;no$n a# 'O&'A6 STOCK

EC)AN7E *'SE3 $a# e#tabli#!ed in ,1B a# T!e Nati


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T!e ba#e (ear o SENSE i# ,GB1@BG+ T!e SENSE i# $idel( reported in bot! dome#tic and

international mar;et# t!rou%! print a# $ell a# electronic media+

SENSE i# calculated u#in% a mar;et capitaliHation $ei%!ted met!od+ A# per t!i#

met!odolo%(5 t!e le


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CO&PAN6 PROFI8E

About India Inoline

Started in ,GG a# an independent bu#ine## re#earc! and inormation #er


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Oerin% Product# and Sere are a one@#top inancial #er


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Commoditie#

India inoline# e?ten#ion into commoditie# tradin% reconcile# it# #trate%ic intent to

emer%e a# a one@#top #olution# inancial intermediar(+ It# e?perience in #ecuritie#

bro;in% !a# empo$ered it $it! re"ui#ite #;ill# and tec!nolo%ie#+ T!e Compan(#

commoditie# bu#ine## pro


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E?pert recommendation#

Ea#( documentation

Quic; proce##in% and di#bur#al

No %uarantor re"uirement

Quic; proce##in% and di#bur#al

No %uarantor re"uirement

In


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&ar;et on t!e mo


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%lobal mar;et# and an( ot!er cue#5 $!ic! could impact t!e mar;et+

C)APTER /

SECURIT6 ANA86SIS

-G


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SECURIT6 ANA86SIS

Deinition

For ma;in% proper in


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Anal(#i# o #ecuritie#

Securit( anal(#i# in bot! traditional #en#e and modern #en#e in


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FUNDA&ENTA8 ANA86SIS

It# a lo%ical and #(#tematic approac! to e#timatin% t!e uture di


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Indu#trial 7ro$t! Rate

T!e #toc; mar;et anal(#t# ocu# more on t!e indu#trial #ector+ T!e( loo; at t!e o


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T!e i#cal deicit !a# to be inanced $it! %o


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'alance o Pa(ment#5 Fore? Re#er


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INDUSTR6 ANA86SIS

T!e objecti


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&aturit( and Stabili#ation Sta%e

Durin% t!e #ta%e5 $!en t!e indu#tr( i# more or le## ull( deit! t!e #atiation o demand5 encroac!ment o ne$ product#5 and c!an%e# in

con#umer preerence#5 t!e indu#tr( e


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II. Nature and Prospect of Demand

&ajor cu#tomer and t!eir re"uirement#

Ke( determinant# o demand

De%ree o c(clicalit( in demand

E?pected rate o %ro$t! in t!e ore#eeable uture+

III. Cost, Efficiency, and Profitability

Proportion# o t!e ;e( co#t element#5


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'ar%ainin% po$er o bu(er#

'ar%ainin% po$er o #eller#

CO&PAN6 ANA86SIS

Compan( anal(#i# i# t!e inal #ta%e o t!e undamental anal(#i#5 $!ic! i# to be done

to decide t!e compan( in $!ic! t!e in


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#ome parameter# li;e boo;


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,+ Comparati


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di


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a##et# are RS+ la;!# and in


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T!e ratio i# one o t!e mo#t po$erul tool# o inancial anal(#i#+ It i# t!e proce## o

e#tabli#!in% and interpretin%


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*I3 Return on total re#ource#

*II3 Return on e"uit(

*III3 Turno


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'ar and line c!art#5

T!e point and i%ure c!art5

T!e mo


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TEC)NICA8 INDICATORS

In addition to c!art#5 $!ic! orm t!e main#ta( o tec!nical anal(#i#5 tec!nician# al#o

u#e certain indicator# to %au%e t!e o


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-+ PUT I CA88 RATIO

Anot!er indicator monitored b( contrar( tec!nical anal(#i# i# t!e put = call ratio+

Speculator# bu( call# $!en t!e( are bulli#! and bu( put# $!en t!e( are beari#!+ Since

#peculator# are oten $ron%5 #ome tec!nical anal(#t# con#ider t!e put = call ratio a# a u#eul

indicator+ T!e put = call ratio i# deined a#

purc!a#edcall#oNumber

purc!a#edput#oNumber#ratioCallPut = =

/+ &utual@Fund 8i"uidit(

I mutual und li"uidit( i# lo$5 it mean# t!at mutual und# are bulli#!+ So con#train#

ar%ue t!at t!e mar;et i# at5 or near5 a pea; and !ence i# li;el( to decline+ T!u#5 lo$ mutual

und li"uidit( i# con#idered a# a beari#! indicator+

Con


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RANDO& >A8K T)EOR6

Fundamental anal(#i# trie# to e


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>ea;l( Eicient @

T!i# orm o Eicient &ar;et )(pot!e#i# #tate# t!at t!e current price# alread( ull(

relect all t!e inormation contained in t!e pa#t price mo


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C)APTER /

PORTOFO8IO &ANA7E&ENT

-


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PORTFO8IO &ANA7E&ENT

Concept o Portolio

Portolio i# t!e collection o inancial or real a##et# #uc! a# e"uit( #!are#5 debenture#5

bond#5 trea#ur( bill# and propert( etc+ portolio i# a combination o a##et# or it con#i#t# o

collection o #ecuritie#+ T!e#e !oldin%# are t!e re#ult o indi


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Portolio mana%ement concern# t!e con#truction maintenance o a collection o

in


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problem# in enc!a#in% t!em5 and #$itc!in% rom one in


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)e #!ould #ee t!e trend# o at


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T!e ir#t #tep in t!e portolio mana%ement proce## i# to #peci( one# in


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+ Portolio E?ecution

T!i# i# t!e p!a#e o portolio mana%ement $!ic! i# concerned $it! implementin% t!e

portolio plan b( bu(in% and = or #ellin% #peciied #ecuritie# in %i


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A PORTFO8IO &ANA7E&ENT )AS 'EEN C)ARACTERIED

Tradition portolio t!eor(

&odern portolio t!eor(

Tradition portolio t!eor(

T!i# t!eor( aim# at t!e #election o #uc! #ecuritie# t!at $ould it in $ell $it! t!e a##et

preerence#5 need# and c!oice# o in


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>it! portolio in


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SE'I 7UIDE8INES TO T)E PORTFO8IO &ANA7ERS

On Bt! Januar( ,GG/ #ecuritie# e?c!an%e board o India i##ued re%ulation# to t!e

portolio mana%er# or t!e re%ulation o portolio mana%ement #er


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PORTFO8IO SE8ECTION

Portolio anal(#i# pro


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A##umption#

T!e &ar;o$itH model i# ba#ed on #e


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CAPITA8 &ARKET T)EOR6

T!e CAP& $a# deilliam S!arpe5 but Jo!n 8inter and Jan &o##in made #imilar independent deri


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C)APTER .

PORTFO8IO ANA86SIS

22


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PORTFO8IO ANA86SIS

A Portolio i# a %roup o #ecuritie# !eld to%et!er a# in


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E?pected Return o a Portolio

It i# t!e $ei%!ted a


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C)APTER

PRACTICA8 STUD6 OF SO&E SE8ECTED SCRIPS

2G


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RE8IANCE ENER76

DATE SHARE PRICE (X) (X-X') (X-X')2

4/3/2014 1,510 -74.37 5530.90

3/3/2014 1,485.55 -98.62 9725.90

29/2/2014 1,568 -16.42 269.62

28/2/2014 1,600.70 16.53 273.24

27/2/2014 1,631.35 47.18 2225.95

26/2/2014 1,697.25 113.08 12787.09

25/2/2014 1,622.70 38.53 1484.56

22/2/2014 1,555.90 -28.27 799.19

21/2/2014 1,595.05 10.88 118.37

20/2/2014 1,575.65 -8.52 72.59

EPECTED RETURN L ,51.-=,0 L ,51. L

(X-X') 2 L //5-1B+.-

RISK L //5-1B+.- L -12+-0

B,


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CRO&PTON 7REA4ES


4/3/2014 302 -8.92 79.66

3/3/2014 309.95 -0.97 0.95

29/2/2014 314 3.48 12.08

28/2/2014 326.10 15.18 230.2827/2/2014 326.55 15.63 244.14

26/2/2014 311.80 0.88 0.77

25/2/2014 299.30 -11.62 135.14

22/2/2014 297.85 -13.07 170.96

21/2/2014 308.70 -2.22 4.95

20/2/2014 312.60 1.68 2.81

EPECTED RETURN L /5,0G=,0 L /,0+G L

(X-X') 2 L 11,+B-

RISK L 11,+B- L -G+2G

B-


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PORTFO8IO @ '

SAT6A& CO&PUTERS


4/3/2014 406 -29.56 873.50

3/3/2014 411.95 -23.61 557.20

29/2/2014 434 -1.41 1.97

28/2/2014 446.80 11.25 126.45

27/2/2014 437.10 1.55 2.39

26/2/2014 449.75 14.20 201.50

25/2/2014 450.30 14.75 217.4222/2/2014 438.80 3.25 10.53

21/2/2014 458.20 22.65 512.80

20/2/2014 422.50 -13.06 170.43

EPECTED RETURN L .5/2=,0 L ./+2 L

(X-X') 2 L -52B.+,1

RISK L -2B.+,1 L ,+B,

B/


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>IPRO


4/3/2014 417 -14.13 199.52

3/3/2014 419.70 -10.93 119.36

29/2/2014 435 4.02 16.20

28/2/2014 446.45 15.83 250.43

27/2/2014 439.90 9.27 86.03

26/2/2014 444.15 13.53 182.93

25/2/2014 439.55 8.93 79.66

22/2/2014 422.40 -8.23 67.65

21/2/2014 431.65 1.02 1.05

20/2/2014 411.30 -19.33 373.46

EPECTED RETURN L .5/02=,0 L ./0+2 L

(X-X') 2 L ,/5 B2+-B

RISK L ,/B2+-B L /B+0G

B.


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JINDA8 STEE8


4/3/2014 1,007 -73.86 5454.56

3/3/2014 1,014.40 -66.36 4402.99

29/2/2014 1,062 -19.21 368.83

28/2/2014 1,079.80 -0.96 0.91

27/2/2014 1,063.55 -17.21 296.01

26/2/2014 1,093.55 12.79 163.71

25/2/2014 1,117.00 36.24 1313.70

22/2/2014 1,115.45 34.69 1203.74

21/2/2014 1,142.60 61.84 3824.80

20/2/2014 1,112.75 31.99 1023.68

EPECTED RETURN L ,05101=,0 L ,010+1 L

(X-X') 2 L ,150-+G.

RISK L ,10-+G. L ,/.+/2

B


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PORTFO8IO@A

T)E RISK AND RETURN OF EAC) CO&PAN6

IN PORTFO8IO A IS

S8 +No CO&PAN6 RETURN RISK

, ')E8 -,20 -12+-0

- RE8IANCE ENER76 ,1. -12+-0

/ CRO&PTON 7REA4ES /,0+G -G+2G

PORTFO8IO@'

T)E RISK AND RETURN OF EAC) CO&PAN6

IN PORTFO8IO ' IS

SI+ No CO&PAN6 RETURN RISK

, SAT6A& CO&PUTERS ./+2 ,+B,

- >IPRO ./0+2 /B+0G

/ JINDA8 STEE8 ,010+1 ,/.+/2

B2


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INTERPERATION

From t!e abo


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CONC8USIONS

Portolio i# collection o dierent #ecuritie# and a##et# b( $!ic! $e can #ati#( t!e ba#ic

objecti


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'I'I8O7RAP)6

IN4EST&ENT &ANA7E&ENT '6 4+K+ ')A88A+

SECURIT6 ANA86SIS PORTFO8IO &ANA7E&ENT

'6 E+ FISC)ER J+

JORDAN+

>>>+INDIAIFO8INE+CO&

>>>+'SEINDIA+CO&+

>>>+NSEINDIA+CO&+

>>>+&ONE6CONTRO8+CO&+

DA8A8 STREET &A7NAINE+

'USINESS TODA6 &A7AINE+

FINANCIA8 EPRESS+

'USINESS 8INE+
http://www.nseindia.com/http://www.nseindia.com/

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