CONTENTS

Introduction Objective of study Concepts Investment options Data collection Analysis Recommendation Limitations References

Introduction
Every person now somehow has to try & manage his funds in a better way. As we know that savings are not enough now. Investment in different areas is one option. It is all about how & where one decides to invest. There are number of avenues & options open to the general investor today & to manage his/her fund in different investment options he/she creates portfolio. A portfolio can be defined as a set of different investment options in which one particular person or organization has invested. The unsystematic risk is one which can be eliminated by diversification. This risk represents the fluctuations in returns of a security due to factors specific to particular firm only and not the market as a whole & to reduce this type of risk one requires a good portfolio.

Objective

The main objective of this study is to allocate money in different equity options for the purpose of gaining maximum return while dealing with risk scientifically. The purpose of this exercise is to make different portfolios for different personalities namely risk averse & risk seeker so to meet there expectation.

Concepts
RISK: Risk in any investment means that the future returns from that investment are unpredictable. The concept of risk may be defined as the possibilities that the actual return may not be same as expected. With reference to a firm, risk may be defined as the possibility that the actual outcome of a financial decision may not be same as estimated. There may be different types of risk involved in a financial decision. Some of these are: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 1. Capital risk: The risk of incurring a capital loss due to downward changes in the market price of a security is defined as the capital risk of that security. Investment in most of the equity shares have this type of risk running with them . 2. Income risk: There is a risk of variation in return available from the security Dividends paid by a company on equity shares may vary from one year to another. However, this risk is almost nil in case of bonds and debentures and preference shares. 3. Default risk: There may be default in payment of interest or repayment of principal amount by the company and chances of this default is called the default risk. This risk may also include the risk of losing the principal amount of shares and debentures in case of winding up of the company

RETURN: Return is the motivating force and the principal reward in the investment process. The return may be defined in terms of (1) realized return i.e. the return which was earned or could have been earned, and (2) expected return ,i.e., the return which the

investor anticipate to earn over some future period. The expected return is a predicted return and may or may not occur. Measuring the realized return allows an investor to assess how the future expected returns may be. For an investor, the return from investment is the expected cash inflows in terms of dividends, interest , bonus, capital gain etc., available to the holder of an a investment. The return may be calculated as the total gain or loss to the holder over a given period of time and may be defined as a percentage return on the initial amount invested. Types of Investors: From the point of view of nature and attitude , the investor may be classified as: 1 2 3 4 (1) Risk averse: Those investors who avoid taking risk and prefer only those investments which have nil or relatively lower risk. Retired, old aged and pensions are generally risk averse investors. These investors will select the

5 investment only on the basis of risk attached to an investment and may altogether ignore the return from the investment. 1 2 3 4 5 (2) Risk seekers: Those investors who are ready to take risk if the return is sufficient enough. These investors may be ready to take income risk, capital risk or both. Given choice between two risky investments, a risk seeker investor would prefer the riskier one.

6 (3) Neutrals: Those investors who do not care much about the risk. Their 7 8 investment decisions are based on considerations other than risk and return . PORTFOLIO MANAGEMENT: The Portfolio management deals with the selection of optimal portfolios by rational risk-averse investors i.e., by investors who attempt to

maximize their expected return consistent with individually acceptable portfolio risk . The portfolio management is the investment of funds in such combinations of different securities in which the total risk of the portfolio is minimized while expecting maximum return from it. It refers to not keeping all eggs in the same basket. An investor will invest his total funds in not just one type of security; rather he will like to hold a combination, a portfolio of different securities. This is also called diversification and every investor prefers to have diversification. The reason behind that diversification is that helps reducing variability of returns and reducing risk of total investment. The diversification works because returns and prices of all security will be offset by the reverse variability in some other security and therefore, the overall risk will be less and less affected.
The total risk emanating from a portfolio of an investor can be further classified into diversifiable and non-diversifiable risk. It is only the diversifiable risk element that can be minimized by holding a portfolio. Since, every investor is predominantly a risk averse, so, in order to minimize the risk every investor attempts to hold a well diversified portfolio. In such a case, the investor will not be concerned with risk and return of portfolio as such. Portfolio management thus, takes the ingredients of risk and return for individual securities and considers the mixing of these securities. It entails choosing the one best portfolio to suit the risk return preferences of the investors. It also encompasses the evaluation and revising the portfolio to suit the risk-return preferences of the investors. It also encompasses the evaluation and revising the portfolio in view of changing risk return and investors risk preferences.

RISK OF MULTI SECURITY PORTFOLIO: When the portfolio contains more than two securities, the calculation of risk and return is conceptually difficult, but definitely it is cumbersome. Further, it is said that the portfolio risk can be reduced by adding more and more securities. If it is so, then the risk can be brought to a zero level by including a very large number of securities in the portfolio. At this stage, further analysis of risk is required. The total risk of a portfolio can be bifurcate into two parts as follows:

1. Systematic or Market risk: It is that part of total risk which cannot be eliminated

by diversification. This part of arises because every security has a built in tendency to move in line with the fluctuations in the market. The systematic risk refers to fluctuations in return due to general factors in the market such as money supply, inflations, economic recession, industrial policy, interest rate policy of the Government, credit policy, tax policies etc., These are the factors which affect almost every firm. The effect of these factors is to cause the prices of all individual securities move together n same manner and therefore, no investor can avoid or eliminate this risk, whatsoever precautions or diversification may be resorted. So, it is also called the non-diversifiable risk, or the market risk. The level of systematic risk is determined by two factors i.e. the total risk of the security and the correlation between the security return and portfolio return. Higher the total risk of the security, greater will be its systematic risk.

2. Unsystematic Risk: The unsystematic risk is one which can be eliminated by

diversification. This risk represents the fluctuations in returns of a security due to factors specific to particular firm only and not the market as a whole. These factors may be such as workers unrest, strike, change in market demand, change in competitive environment,

change I consumer preferences etc., since these factors affect one firm/industry at a time, they must be examined separately for each security.

Since unsystematic risk results from random events that tend to be unique to an industry or a firm, this risk is random n nature and is uncorrelated with the return of the portfolio. This risk is also called diversifiable risk and can be reduced by diversification. The possibility of risk reduction increases if the securities do not move in locked up fashion. The risk of a portfolio is diversified if securities do not move together in same direction. This helps investors in building a portfolio that attains the highest possible return for a given level of risk. When a large number of securities enter a portfolio, many random fluctuations in returns from these securities are automatically set off and hence risk of the portfolio is reduced. Unsystematic risk is reduced when more and more securities are added to the portfolio. For a well 0investor. The bifurcation of total risk into systematic and unsystematic risk leads to conclusion that a portfolio may be called an efficient portfolio if it does not have any unsystematic risk. This efficient portfolio or optimal portfolio can be constructed by a careful selection of only a handful of securities.

Investment options
Ten companies are selected from national stock exchange of different sectors on the basis of their past performance The sectors are : Sectors are: cement industry: paint industry: sugar industry: oil sector: telecom industry: banking industry: Automobile Industry: Financial Services : Power sector : Steel industry:
Associated Cement Companies

Asian paints Balrmpur chini mils BPCL

Bharti Airtel Ltd.

ICICI bank
Maruti Suzuki Ltd.

Reliance capital Reliance energy Tata steel

Introduction of sectors & their respected companies:Cement Industry India is the second largest producer of cement in the world . With rapidly growing housing, infrastructure and real estate sectors and the ambitious plans for developing Special Economic Zones, the cement industry is expected to enjoy double-digit growth. Globally, India is the second largest producer of cement. Cement production grew at the rate of 9.1 per cent during 2006-07 over the previous fiscals total production of 147.8 mt. Of this, 9.3 million tones of cement was exported. The Indian cement industry comprises 130 large

cement plants and 365 mini-cement plants, with installed capacities of 165 million tones per annum (mtpa). Large cement plants accounted for over 94 per cent of the total installed capacity. Despite the growth of the Indian cement industry, India's per capita production of 115 kilograms per year lags the world average of over 250 kilograms and China's production of more than 450 kilograms per person. Clearly there remains room for growth in the industry in India. Despite the fact that Indian cement industry has clocked a production of more than 100 m tones for the last five consecutive years, the per capita consumption of around 130 kgs compares poorly with the world average of over 260 kgs and more than 450 kgs in China. This, more than anything underlines the tremendous scope for growth in the Indian cement industry in the long term. Cement, being a bulk commodity, is a freight intensive industry and transporting cement over long distances can prove to be uneconomical. This has resulted in cement being largely a regional play with the industry divided into five main regions viz. north, south, west, east and the central region. While the southern region is excess in capacity owing to abundant availability of limestone, the western and northern region are the most lucrative markets on account of higher income levels. Given the high potential for growth, quite a few foreign transnational have been eyeing the Indian markets and are planning to acquire domestic companies. The cumulative FDI inflows into the cement and gypsum industry have been US$ 989 million from August 1991 to March 2007 representing 2.26 per cent of the total FDI inflows into the country. Associated Cement Companies Ltd. (ACC) ACC is oldest and largest cement company in India so investor can rely on it. On the other hand its competitors stock price is going down but it is continuously providing positive return. Companys return on net worth is increasing continuously while its interest cost is decreasing. Company is paying dividend

constantly and its earning per share is increasing. ACC is India's oldest and largest cement company, belonging to the Tata group. ACC Limited is Indias foremost manufacturer of ready mix concrete with a countrywide network of factories and marketing offices. Established in 1936 with 603,200 equity shares of Rs. 10 each, ACC has been a pioneer and trend-setter in cement and concrete technology. ACCs brand name is synonymous with cement and enjoys a high level of equity in the Indian market. Among the first companies in India to include commitment to environment protection as a corporate objective, ACC has won several prizes and accolades for environment friendly measures taken at its plants and mines. A new association was forged between ACC and the Holcim group of Switzerland in 2005. In January 2005, Holcim announced its plans to enter into a long-term strategic alliance with the Ambuja Group by acquiring a majority stake in Ambuja Cements India Ltd. (ACIL), which at the time held 13.8 per cent of the total equity shares in ACC. Holcim simultaneously announced its bid to make an open offer to ACC shareholders, through Holdcem Cement Pvt Limited and ACIL, to acquire a majority shareholding in ACC. An open offer was made by Holdcem Cement Pvt. Limited along with Ambuja Cements India Ltd. (ACIL), following which the shareholding of ACIL increased to 34.69 per cent of the Equity share capital of ACC. Consequently, ACIL has filed declarations indicating their shareholding and declaring itself as a Promoter of ACC. Holcim is the world leader in cement as well as being large suppliers of concrete, aggregates and certain construction-related services. Holcim is also a respected name in information technology and research and development. The group has its headquarters in Switzerland with worldwide operations spread across more than 70 countries. Considering the formidable global presence of Holcim and its excellent reputation, the Board of ACC has welcomed this new association. The company has also been felicitated for its

acts of good corporate citizenship. Right now company is listed at BSE and NSE with 225,000,000 Equity Shares & 100,000,000 Preference Shares of Rs. 10 each.

Steel Industry Steel Industry in India is on an upswing because of the strong global and domestic demand. India's rapid economic growth and soaring demand by sectors like infrastructure, real estate and automobiles, at home and abroad, has put Indian steel industry on the global map. According to the latest report by International Iron and Steel Institute (IISI), India is the seventh largest steel producer in the world. The main producers are Tata Steel, SAIL, and RINL, while the other major producers are ESSAR, ISPAT and JVSL. Steel, is vital to the Indian economy for economic growth, national security, and economic well-being. No practical substitutes exist on a large scale for iron and steel because of the relatively high cost of alternative materials . This sector represents around Rs. 1 trillion of capital investments, and directly provides employment to around 0.5 million, with the integrated steel plants accounting for a 40% share The steel sector also contributes around 6.2% of Indias manufactured goods exports, and 4.6% of total exports by value. The steel sector was deregulated in 1991-92, when controls on capacity and prices were abolished along with quantitative trade restrictions. The peak custom duty has seen a significant decline resulting in a greater integration with the global industry and negative implications on sales realisation and hence profitability The Government has also approved the National Steel Policy (NSP) in November 2005. The long-term goal of the NSP is for India to have a modern and efficient steel industry of world standards, catering to diversified steel demand. The focus of the policy would therefore be to achieve global competitiveness not only in terms of cost, quality and product-mix but also in terms of global benchmarks of efficiency and productivity. Growth in steel consumption has accelerated in recent years. TATA steel

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Tata Steel is Asia's first and India's largest private sector steel company. Profit Sharing Bonus was granted for the first time in India by Tata Steel as early as in 1934 (enforced by law in 1965) thus it is a renowned name when you look for some reliable company to invest. Profit after Tax is increasing at a CAGR of 83.1 from last 5 years those shows a promise of high return to the investors. Since 1935-36 company has paid uninterrupted dividend thus investor can show a complete faith on company. Tata-Corus deal has also increased investors trust on the company. Established in 1907, Tata Steel is Asia's first and India's largest private sector steel company. Tata Steel is among the lowest cost producers of steel in the world and one of the few select steel companies in the world that is EVA+. World Steel Dynamics has ranked Tata Steel as the world's best steel maker (for two consecutive years) in its annual listing in February 2006. Profit Sharing Bonus was granted for the first time in India by Tata Steel as early as in 1934 (enforced by law in 1965). Sir Dorab Tata describing the fi rst share issue in 1907 8000 people helped raise a capital of nearly Rs. 232 lakhs within three weeks. History was made then with rich and poor Indians investing in the dream of a visionary. The Tata Iron and Steel Company took root in the trust and confidence invested in it. Today, a hundred years later, this investment and the shareholder universe have increased manifold. Today, over five lakh shareholders all over the world have reposed their faith in the company and benefit from sustained and fair returns on their investments. The company has recorded consistent dividend payouts since 1935-36 while its performance in the share markets has been stable and profi table throughout its existence. Tata Steel has channelized all resources and efforts through value based management towards earning better returns on its cost of capital. Tata Steel has successfully created high brand recall. It is continuously working towards building new business models by forging alliances with customers and suppliers to strengthen the

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value chain that in turn will help the company to reduce operating costs, improve service levels and offer new products and services. Over a hundred years ago, Jamsetji Tata envisaged a self-reliant India. He aspired to improve the quality of life of Indians. He foresaw industrial progress and national prosperity. One century later, his timeless vision and futuristic foresight still drive Tata Steel. Tata Steel has over the years, vindicated and lived up to the ideals of its founder by building schools, hospitals and playgrounds while expanding the horizons of operations, markets and organizational growth. Today, Jamsetjis vision has manifested into a global conglomerate that has aligned itself to the progress and prosperity of India. Every stakeholder of Tata Steel has a bond of trust with the company.Trust that prevails over changing paradigms. Trust that helps navigate challenges. Trust that reinforces business. This trust, a true inheritance of Tata Steel,will pave the way for the future. This has been a momentous year for Tata Steel. It has been a year of record performance and growth with significant progress in the expansion programme to raise capacity from 5 to 6.8 million tones in Jamshedpur. But undoubtedly the most notable event during the year was the companys public offer to acquire 100% of the shares of Corus Group plc, a 21 million tone capacity steel producer with plants in the United Kingdom and the Netherlands.Together,Tata Steel and Corus will be a 30 million tone steel enterprise, (after completion of the expansion programme in Jamshedpur), and the sixth largest steel company in the world, with operations in four continents. The acquisition of Corus has transformed Tata Steel from a domestic steel producer to an international steel company with global scale. Consolidated Turnover (excluding Corus) up by 23% at Rs. 27,437 crores (USD 6,311 million).Consolidated Profit After Tax (excluding Corus) up by 12% at Rs. 4,177 crores (USD 961 million). Highest ever Dividend: 130% + 25% special dividend Saleable Steel Production up by 8% at 4.93 million

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tones. G blast furnace crossed 2 million tonnes production. As one looks into the future, one continues to see demand for steel as the principal base material for most industrial products. Within India itself the countrys growing prosperity will inevitably result in a dramatic increase in the demand for steel to meet the needs of large infrastructure programmes which India will have to undertake in order to sustain the high level of economic growth which it enjoys today.

Telecom Industry Indian telecom industry is on the path of resurgence. The gradual opening up of economy ensured steady growth even when other countries were in a grip of massive slowdown. Progressive reforms like removal of restrictions on foreign investments and industrial de-licensing are responsible for this process. India is the fourth largest telecom market in Asia after China, Japan and South Korea. The Indian telecom network is the eighth largest in the world and the second largest among emerging economies. At current levels, telecom intensiveness of Indian economy measured as the ratio of telecom revenues to GDP is 2.1 percent as compared with over 2.8 percent in developed economies. The telecom sector is one of the fastest growing sectors of the Indian economy. Today, Indias more than 100 million telephone network is one of the largest in the world. . The wireless technologies currently in use are Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5 CDMA operators providing mobile services in 19 telecom circles and 4 metro cities, covering 2000 towns across the country.

Bharti Airtel Ltd.

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AIRTEL is among India's largest mobile phone and Fixed Network operators so investor can rely on it. The company is one of the world's fastest growing telecom companies. The Earning per share is increasing at a rapid pace and Growth in Net Profit as compared to last year is 100% which is a positive sign for the investor. The company has not announced any dividend last year which will lead to increase in share holder value and eventually lead to higher return threshold. Bharti Airtel formerly known as Bharti Tele-Ventures Limited (BTVL) is among India's largest mobile phone and Fixed Network operators. The company is one of the world's fastest growing telecom companies. It offers its mobile services under the Airtel brand and is headed by Sunil Mittal, India's sixth richest man with a total worth of US$27 billion[citation needed]. The company is the only GSM operator to provide mobile services in all the 23 circles in India. The company also provides telephone services and Internet access over DSL in 14 circles. The company complements its mobile, broadband & telephone services with national and international long distance services. The company also has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore. The company provides reliable end-to-end data and enterprise services to the corporate customers by leveraging its nationwide fiber optic backbone, last mile connectivity in fixed-line and mobile circles, VSATs, ISP and international bandwidth access through the gateways and landing station. Bharti Airtel is one of India's leading private sector providers of telecommunications services based on an aggregate of 50,950,700 customers as on October 31, 2007, consisting of 53,014,758 GSM mobile and 2,106,122 broadband & telephone customers. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBUs) - mobile services, telemedia services (ATS) & enterprise services. The mobile services group provides GSM mobile services across India in

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23 telecom circles, while the ATS business group provides broadband & telephone services in 94 cities. The enterprise services group has two sub-units - carriers (long distance services) and services to corporates. All these services are provided under the Airtel brand.

Banking Industry The Indian banking sector is rapidly moving towards international benchmarks, with increasing efficiency, transparency and dynamism. Given the robust growth prospects in India, the financial sector has a crucial role to play in the development of the economy. Broad-based reforms have made the banking sector competitive and have positioned it well to support sustained economic growth. Based on data published by RBI, during April-December 2006, industry accounted for 38.5% of non-food credit, retail credit for 26.4%, agriculture and allied activities for 12.2%, trade for 6.1%, real estate for 2.4% and other sectors for the balance 14.4%. In response to the increase in the cash reserve ratio and the reverse repo rate and the liquidity conditions, banks have increased their lending and deposit rates. Currently, banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect M&As, takeovers, and asset sales.

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Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is with the Government of India holding a stake), 29 private banks (these do not have

government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively. ICICI Bank ICICI Bank (Industrial Credit and Investment Corporation of India is India's largest private sector bank in market capitalization and second largest overall in terms of assets so investor can rely on it. ICICI share price are increasing and is expected to continue increasing at the same pace, Operating profit has also increased by 48.3% as compared to last year which is a positive sign for the investor. ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a

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wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. ICICI Bank (Industrial Credit and Investment Corporation of India) is India's largest private sector bank in market capitalization and second largest overall in terms of assets. ICICI Bank has total assets of about USD 79 Billion (end-Mar 2007), a network of over 950 branches and offices, about 3600 ATMs, and 24 million customers (as of end July '07). ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank's equity shares are listed in India on stock exchanges at Kolkata and Vadodara, the Stock Exchange, Mumbai and the National Stock Exchange of India

Automobile Industry The Automotive Industry in India is one of the largest industries and a key sector of the economy. The Indian automotive industry started from 1991with the governments de-licensing of the sector and subsequent opening up for 100 per cent FDI through automatic route. Since then many large global companies have set up their facilities in India taking the production of vehicle from 2 million in 1991 to 9.7 million in 2006. At present, India is the worlds 1 2 3 Largest tractor and three-wheel vehicle producer. Second largest two-wheel vehicle producer. Fourth largest commercial vehicle producer.

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Eleventh largest passenger car producer.

The announcement of 'Automotive Mission Plan' for the period of 2006-2016 is a major step taken to make India a global automotive hub. The Mission Plan aims to make India emerge as the destination of choice in the world for design and manufacture of automobiles and auto components, with output reaching a level of US$ 145 billion (accounting for more than 10% of the GDP) and providing additional employment to 25 million people by 2016. AMP envisages setting up of world-class and homologation facilities in India with a total investment of Rs.1,718 crore within the three automotive hubs of the country. These are:Chennai, Pune and Ahmednagar. The Mission seeks to oversee the development of the automotive industry, that is, the present scenario of the sector, its broad role in the growth of national economy, its linkages with other key facets of the economy as well as its future growth prospects. This is involved in improving the automobiles in the Indian domestic market, providing world class facilities of automotive testing and certification as well as ensuring a healthy competition among the manufacturers at a level playing field.

Maruti Suzuki Ltd. Maruti Suzuki India Ltd (previously known Maruti Udyog Ltd) is one of India's leading automobile manufacturers and the market leader in the car segment so investor can rely on it. Dividend as well as Earning per share has increased as compared to previous year which will increase the trust of investors in the company. Maruti Suzuki India Ltd(previously known Maruti Udyog Ltd) is one of India's leading automobile manufacturers and the market leader in the car segment, both in terms of volume

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of vehicles sold and revenue earned. Until recently, 18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of Japan. The Indian government held an initial public offering of 25% of the company in June 2003. As of May 10, 2007, Govt. of India sold its complete share to Indian financial institutions. With this, Govt. of India no longer has stake in Maruti Udyog. Maruti Udyog Limited (MUL) was established in February 1981, though the actual production commenced in 1983. Through 2004, Maruti has produced over 5 Million vehicles.

Marutis are sold in India and various several other countries, depending upon export orders. Cars similar to Marutis (but not manufactured by Maruti Udyog) are sold by Suzuki in Pakistan and other South Asian countries. The company annually exports more than 30,000 cars and has an extremely large domestic market in India selling over 500,000 cars annually. Maruti 800, till 2004, was the India's largest selling compact car ever since it was launched in 1983. More than a million units of this car have been sold worldwide so far. Maruti Suzuki India Limited, a subsidiary of Suzuki Motor Corporation of Japan, has been the leader of the Indian car market for over two decades. Its manufacturing facilities are located at two facilities Gurgaon and Manesar south of New Delhi. Marutis Gurgaon facility has an installed capacity of 350,000 units per annum. The Manesar facilities, launched in February 2007 comprise a vehicle assembly plant with a capacity of 100,000 units per year and a Diesel Engine plant with an annual capacity of 100,000 engines and transmissions. Manesar and Gurgaon facilities have a combined capability to produce over 700,000 units annually. The equity shares of the Company are listed on Bombay Stock Exchange Limited, Mumbai (BSE) and The National Stock Exchange of India Limited (NSE) As on 31 March 2007, 45.79% of the Companys total paid up capital representing 132,284,253 shares was held in

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dematerialized form and the balance 54.21% representing 156,625,807 shares were held in physical form. .

Data
Daily stock price of the ten companies over the last one year ( 1st Feb. 2007 to 28th feb.2008) was collected from NSE website. .

They are:

month/company

nifty

acc

asian

bharti airtel

balrampur sugar

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march April may June July August September October November December January February Feb./closing

3726 3690 4150 4226 4313 4345 4474 5000 5903 5765 6362 5140 5222

876 704 852 852 939 976 1071 1210 1052 1092 1028 755 795

paints 717 740 808 867 829 866 950 988 1032 986 1134 1170 1115

728 728 835 841 837 862 869 941 940 923 967 909 826

60 67 63 76 74 68 59 78 76 100 115 78 93

bpcl 309 293 346 360 343 307 310 377 342 402 519 386 464

icici bank 840 803 860 930 950 927 907 1057 1333 1162 1228 1198 1088

maruti 840 749 814 811 770 821 881 990 1006 1032 991 905 868

reliance capital 632 615 754 971 1103 1109 1230 1808 1062 2479 2614 1955 1824

REL 480 481 541 624 737 777 1349 1865 1734 1900 2278 1978 1569

tata steel 451 424 557 635 593 623 691 841 885 842 932 776 801

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Fundamental Analysis

I did fundamental analysis of all the 10 stocks selected by me Fundamental analysis

includes studying the following aspects of a company:

Beta Coefficient: Beta coefficient is a measure of the non-diversifiable or systematic

risk of an asset relative to that of the market portfolio. It is an index of the degree of responsiveness of the securitys return with the market return. A Beta of 1.0 indicates an asset of average risk. A Beta coefficient greater than 1.0 indicates above average risk- stocks whose returns tend to be more risky than the market. Stocks with Beta coefficient less than

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1.0 are of below average risk i.e. less riskier than the market portfolio. Here we calculated Beta coefficient of all the 10 stocks selected by us using the following formula:

= (s/M)* CORSM
Where, CORSM = Correlation between the return of the security and the portfolio

= Standard Deviation of the Security

s

M=

Standard Deviation of the Market Portfolio

Beta of 10 Selected Stocks

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